Bill C-47: An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023
Tabled in the House of Commons, May 18, 2023
Explanatory Note
Section 4.2 of the Department of Justice Act requires the Minister of Justice to prepare a Charter Statement for every government bill to help inform public and Parliamentary debate on government bills. One of the Minister of Justice’s most important responsibilities is to examine legislation for inconsistency with the Canadian Charter of Rights and Freedoms [“the Charter”]. By tabling a Charter Statement, the Minister is sharing some of the key considerations that informed the review of a bill for inconsistency with the Charter. A Statement identifies Charter rights and freedoms that may potentially be engaged by a bill and provides a brief explanation of the nature of any engagement, in light of the measures being proposed.
A Charter Statement also identifies potential justifications for any limits a bill may impose on Charter rights and freedoms. Section 1 of the Charter provides that rights and freedoms may be subject to reasonable limits if those limits are prescribed by law and demonstrably justified in a free and democratic society. This means that Parliament may enact laws that limit Charter rights and freedoms. The Charter will be violated only where a limit is not demonstrably justifiable in a free and democratic society.
A Charter Statement is intended to provide legal information to the public and Parliament on a bill’s potential effects on rights and freedoms that are neither trivial nor too speculative. It is not intended to be a comprehensive overview of all conceivable Charter considerations. Additional considerations relevant to the constitutionality of a bill may also arise in the course of Parliamentary study and amendment of a bill. A Statement is not a legal opinion on the constitutionality of a bill.
Charter Considerations
The Minister of Justice has examined Bill C-47, An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023, for any inconsistency with the Charter pursuant to his obligation under section 4.1 of the Department of Justice Act. This review involved consideration of the objectives and features of the Bill.
What follows is a non-exhaustive discussion of the ways in which Bill C-47 potentially engages the rights and freedoms guaranteed by the Charter. It is presented to assist in informing the public and Parliamentary debate on the Bill. It does not include an exhaustive description of the entire bill, but rather focuses on those elements relevant for the purposes of a Charter Statement.
The main Charter-protected rights and freedoms potentially engaged by the proposed measures include:
- Freedom of expression (section 2(b))
Section 2(b) of the Charter provides that everyone has freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication. It includes the “open court principle” whereby members of the public have a right to receive information pertaining to judicial proceedings.
- Right to liberty (section 7)
Section 7 of the Charter protects against the deprivation of an individual’s life, liberty and security of the person unless done in accordance with the principles of fundamental justice. These include the principles against arbitrariness, overbreadth and gross disproportionality. An arbitrary law is one that impacts section 7 rights in a way that is not rationally connected to the law’s purpose. An overbroad law is one that impacts section 7 rights in a way that, while generally rational, goes too far by capturing some conduct that bears no relation to the law’s purpose. A grossly disproportionate law is one whose effects on section 7 rights are so severe as to be “completely out of sync” with the law’s purpose. Offences that carry the possibility of imprisonment have the potential to deprive liberty and so must accord with the principles of fundamental justice.
- Right against unreasonable search and seizure (section 8)
Section 8 of the Charter protects against “unreasonable” searches and seizures. The purpose of section 8 is to protect individuals against unreasonable intrusion into a reasonable expectation of privacy. A search or seizure that intrudes upon a reasonable expectation of privacy will be reasonable if it is authorized by a law, the law itself is reasonable (in the sense of striking an appropriate balance between privacy interests and the state interest being pursued), and it is carried out in a reasonable manner. The assessment of the reasonableness of the law is a flexible one that takes into account the nature and purpose of the legislative scheme, and the nature of the affected privacy interests.
- Rights that apply to any person charged with an offence (section 11)
Section 11 of the Charter guarantees certain rights to persons who have been charged with an offence. Persons are “charged with an offence” within the meaning of section 11 if they are subject to proceedings that are criminal by nature, or that can result in “true penal consequences”. True penal consequences include imprisonment and fines with a punitive purpose or effect, as may be the case where the fine or penalty is out of proportion to the amount required to achieve regulatory purposes.
- Equality rights (section 15)
Section 15(1) Charter protects equality rights. It provides that every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination, including on the basis of age and mental or physical disability. Equality entails the promotion of a society in which all are secure in the knowledge that they are recognized at law as human beings equally deserving of concern, respect, and consideration.
Part 1
Mandatory disclosure rules
The amendments would expand the existing “reportable transactions” rules in the Income Tax Act for which an information return is required to be filed with the Canada Revenue Agency (CRA). A transaction would be reportable if it can reasonably be concluded that one of the main purposes of entering into the transaction is to obtain a tax benefit. The amendments would introduce a new category of “notifiable transactions” which would include transactions considered to be abusive and transactions that may be abusive but that require more information to be provided to the CRA in order to make that determination. The amendments would also extend the normal reassessment period and expand and increase monetary penalties for non-compliance with reporting rules. Finally, the amendments would provide rules for the reporting of uncertain tax positions, that is, situations where it is uncertain that a particular tax position will be accepted as being in accordance with the Income Tax Act.
The requirement to provide information about certain transactions potentially engages section 8 of the Charter. The following considerations support the consistency of this requirement with section 8. The purpose of the measure is to improve the collection of relevant information to help the CRA to respond effectively and efficiently to tax risks through informed risk assessments, audits and changes to legislation. The amendments also make clear that there is no requirement to disclose information if it is reasonable to believe that the information is subject to solicitor-client privilege. The amendments clarify that it is not only a lawyer who is an advisor in respect of a reportable transaction who may claim this privilege, but rather it can be asserted by anyone who would otherwise be required to disclose information. In the regulatory and administrative contexts, privacy expectations are reduced. Powers to compel the production of information for the administration of the Income Tax Act, which is based upon a self-assessment system, have been upheld as reasonable under section 8. The amendments to the mandatory disclosure rules would also align with international standards and best practices in this area.
Electronic Payment
Part 1 would amend the Income Tax Act, the Excise Tax Act, the Air Travellers’ Security Charge Act, the Excise Act, 2001, as well as Part 1 of the Greenhouse Gas Pollution Pricing Act to require that payments to the Receiver General over $10,000 be made electronically. Failure to comply with this requirement could result in penalties. Payments would not be required electronically, however, if they cannot reasonably be made in that manner.
This requirement potentially engages section 15 of the Charter given that persons with disabilities may face barriers in making electronic payments. The following considerations support the consistency of the amendments with section 15 of the Charter. The provisions provide an exception for individuals who cannot reasonably meet the requirement to make payments electronically, and this would include people who cannot do so due to disability. Additionally, the term “electronic payment” would be defined as “any payment or remittance to the Receiver General that is made through electronic services offered by a designated financial institution or by any electronic means specified by the Minister.” This would provide individuals the option of using the services of a range of financial institutions to make an electronic payment, such as banks and credit unions. Further, under section 220(3.1) of the Income Tax Act and under similar provisions in the other statutes, the Minister of National Revenue may waive any penalty that would otherwise be payable under these statutes.
Part 4
Division 1 – Amendments to the Bank Act
Division 1 of Part 4 would make several amendments to the Bank Act. The amendments would strengthen the regime for dealing with complaints against banks and authorized foreign banks by, among other things, allowing the Minister of Finance to designate only one external complaints body to address consumer complaints involving banks. The Financial Consumer Agency of Canada would be given further oversight and enforcement powers with respect to the external complaints body.
The amendments would require a bank or an authorized foreign bank to provide the designated external complaints body, without delay, with all information in its possession or control that relates to a complaint received by the external complaints body in relation to the institution. This information-sharing would allow the external complaints body to effectively carry out its mandate and functions in considering complaints from consumers. These obligations potentially engage section 8 of the Charter, since they may require an institution to provide the external complaints body with personal information about the person who made a complaint.
The amendments would also extend the existing special audit powers of the Commissioner of the Financial Consumer Agency of Canada. Currently, these powers allow the Commissioner to direct that a special audit be done in relation to a bank or foreign bank. The amendments would also allow the Commissioner to direct that the external complaints body be subject to a special audit. The special audit may be conducted by a firm of accountants and in accordance with any terms or conditions that the Commissioner considers appropriate. The amendments would require the external complaints body that is subject to the special audit to provide the Commissioner with the results of the audit, as is currently the case for a bank or foreign bank. The special audit powers also potentially engage section 8 of the Charter, since the audits may require access to personal information that the external complaints body has obtained while considering a complaint.
The following considerations support the consistency of these requirements and powers with section 8 of the Charter. All information-sharing would be for the general purpose of ensuring that the external complaints body works effectively and as intended, to protect consumers. Furthermore, privacy interests are diminished in the regulatory and administrative contexts. Statutory powers to require the production of relevant information for regulatory or administrative purposes, rather than for the purpose of investigating criminal offences, have been upheld as reasonable under section 8. In reviewing the relevant provisions, the Minister of Justice has not identified any potential effects that could constitute an unreasonable interference with privacy as protected by section 8.
Division 2 - Variable Payment Life Benefit
Division 2 of Part 4 would amend the Pooled Registered Pension Plans Act to, among other things, provide for variable life payments under pooled registered pension plans. Division 2 would also include an amendment to the Canadian Human Rights Act (CHRA) to provide that it is not a discriminatory practice for these payments to only be available to a plan member once they reach the prescribed age. The proposed amendment to the CHRA could potentially engage section 15 because it would prevent an individual who has not reached the prescribed age of eligibility for this type of payment from seeking recourse under the CHRA on the basis that their age disqualifies them from receiving such payments.
The following considerations support the consistency of this provision with section 15 of the Charter. Courts have recognized that age-based distinctions are a common and necessary way of ordering our society. Limiting access to the CHRA as a recourse mechanism in this context recognizes that the age-based restriction on the availability of these payments reasonably corresponds to the age at which individuals may need these payments to support themselves in retirement.
Division 3 – Money Laundering and Digital Assets
Division 3 of Part 4 would make a number of amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and the Criminal Code, as well as limited amendments to a number of other Acts, in order to strengthen Canada’s ability to deal with proceeds of crime and terrorist financing.
Revocation of registration and offence relating to unregistered entities
Money Services Businesses (MSBs) include businesses that engage in foreign exchange and virtual currency dealing, international money transfers and sale of traveller’s cheques and money orders. Currently, the PCMLTFA requires MSBs and other prescribed entities to register with the Financial Trends and Reports Analysis Centre of Canada (FINTRAC). Failure to register is a criminal offence. It also requires FINTRAC to revoke a person or entity’s registration if they become ineligible to be registered. This can happen, for example, if the person or entity or certain persons involved in the entity are convicted of certain offences, if the person or entity is the subject of an order or regulation under sanctions legislation, or if they are listed under the terrorism provisions of the Criminal Code. Amendments would make this revocation automatic, by operation of law, as of the date the person or entity became ineligible. Amendments would also create a new offence of carrying out, while unregistered, activities for which registration is required. Since the proposed amendments create a criminal offence subject to imprisonment, they engage the right to liberty guaranteed under section 7 of the Charter.
The following considerations support the consistency of the amendments with section 7 of the Charter. The Minister has not identified any potential inconsistencies with the principles of fundamental justice. The automatic revocation of registration, coupled with the associated offence, ensures that ineligible businesses will be required to cease activities immediately when they become ineligible, which better reflects the intent of the ineligibility provisions to ensure that anyone carrying on activities is registered. Amendments would still require FINTRAC to communicate the fact of the revocation if and when FINTRAC is aware of it. The offence must be committed knowingly, including where the accused exhibits wilful blindness, which ensures that no one is convicted of an offence when they could not have reasonably known that they had become ineligible.
Offence – Structured transactions
Currently, the PCMLTFA and regulations under it require reporting entities to report certain transactions to FINTRAC that are over a prescribed dollar amount, currently at $10,000. A common technique used by money launderers to avoid being the subject of these reports is to “structure” a transaction by breaking it down into a number of smaller transactions. Amendments would create an offence of structuring a transaction in this way, in order to avoid having it be reported to FINTRAC. Since the offence would be punishable by imprisonment, it has the potential to engage the right to liberty protected under section 7 of the Charter.
The following considerations support the consistency of this offence with the Charter. The Minister has not identified any potential inconsistencies with the principles of fundamental justice. The offence is tailored to catch only conduct that relates to the purpose, which is to prohibit activity deliberately designed to circumvent reporting obligations under the PCMLTFA and its regulations. Notably, it would require that the prosecution establish an intent to avoid these obligations, and so would not capture unintentional conduct.
Sharing of information – Minister’s duties under Part 1.1
Currently, section 53.1 of the PCMLTFA allows the Director of FINTRAC to disclose information to the Minister for the purposes of carrying out the Minster’s powers and duties under Part 1.1 of the PCMLTFA. Section 53.2 limits this by prohibiting the disclosure under section 53.1 of information that would identify a person or entity except in the case of a foreign entity. This division would amend section 53.2 to also allow disclosure of identifying information where it would identify an entity that is subject to reporting obligations under the PCMLTFA, or where the information is requested for the purpose of issuing, amending, suspending, revoking or reinstating a permit under section 11.7 of the PCMLTFA, which allows permits for activities that are otherwise limited or prohibited by regulation. The disclosure of information under section 53.1 has the potential to engage section 8 of the Charter.
The following considerations support the consistency of the amendments with section 8 of the Charter. The additional, narrow circumstances where identifying information can be disclosed are limited to regulatory contexts where privacy interests are diminished. The circumstances are ones where identifying information is necessary in order for the Minister to effectively exercise the Minister’s powers and duties, for example where the information is necessary to identify participants in a money laundering or terrorist financing network for the purpose of making an order, or where the information is necessary in order to issue a permit to the person or entity identified in the information.
Exchange of Money Laundering/Terrorist Financing information with Minister and Superintendent of Financial Institutions for purposes of other statutes
Division 3 of Part 4 would create a new authority for the Director of FINTRAC, the Minister of Finance, officers of the Department of Finance and the Superintendent of Financial Institutions to share information that relates to money laundering and terrorist financing activities for the purpose of assessing risks to the integrity of the Canadian financial system that may arise from the grant, revocation, suspension or amendment of an approval. The sharing of information obtained for one purpose for another distinct purpose has the potential to engage section 8 of the Charter.
The following considerations support the consistency of this amendment with section 8 of the Charter. Privacy interests are diminished in the regulatory context. Information could only be shared for the specified purposes, and would have to relate both to the approval in question and to money laundering and terrorist financing activities. Information shared under this provision could only be used by the recipient for the purposes of an approval.
Sharing of national security and financial integrity information with Minister for purposes of other statutes
Division 3 of Part 4 would create a new authority for FINTRAC, at the request of the Minister of Finance, to disclose to the Minister or to an officer of the Department of Finance information that relates to national security or to the integrity of Canada’s financial system, for the purpose of assisting the Minister in determining whether to grant, revoke, suspend or amend an approval, or in exercising certain functions and duties under the Retail Payment Activities Act. The sharing of information obtained for one purpose for another distinct purpose has the potential to engage section 8 of the Charter.
The following considerations support the consistency of the amendment with section 8 of the Charter. Privacy interests are diminished in the regulatory context. Sharing would be at the discretion of the Director of FINTRAC and only for narrow purposes related to the important objectives of national security and the integrity of the financial system. The information could only be used by the recipient for the purpose for which it was disclosed. The requirement to retain records of sharing would help to ensure accountability with respect to the use of this authority.
Sharing of national security information with the Superintendent of Financial Institutions
Currently, section 55.1 of the PCMLTFA allows FINTRAC to disclose information relating to threats to the security of Canada to certain entities. Division 3 of Part 4 would add the Superintendent of Financial Institutions to the list of recipients under section 55.1, allowing information relating to threats to the security of Canada to be disclosed to the Superintendent for the purposes of the Superintendent’s duties and functions under the Bank Act, Insurance Companies Act and the Trust and Loan Companies Act. The disclosure of information has the potential to engage section 8 of the Charter.
The following considerations support the consistency of the amendments with section 8 of the Charter. Disclosure would be at FINTRAC’s discretion, and would be limited to narrow categories of “designated information.” Disclosures would serve the important purpose of ensuring that the Superintendent obtains information about national security considerations relevant to the exercise of the Superintendent’s duties and functions.
Allowing use of non-compliance disclosures in criminal investigations
Currently, FINTRAC may disclose information to law enforcement about compliance with the PCMLTFA where it reasonably suspects that the information would be relevant to investigating or prosecuting a compliance offence under the PCMLTFA. Law enforcement is currently not permitted to use this information for the prosecution of other crimes. Division 3 of Part 4 would remove this limitation. The provision that allows disclosure to law enforcement can engage a reasonable expectation of privacy and, so modification of this provision has the potential to engage section 8 of the Charter.
The following considerations support the consistency of the amendment with section 8. The information in question will have already been disclosed to law enforcement for use in a criminal investigation. The provision would merely permit law enforcement to use information already in their possession where they determine that it is relevant to other offences. This is consistent with the general treatment of information that is disclosed to law enforcement by regulatory bodies.
Expanding designated information
Division 3 of Part 4 would amend sections 55 and 55.1 of the PCMLTFA to expand the list of “designated information” that FINTRAC can include in its disclosures to law enforcement and national security bodies. Additions include information relevant to identifying a person or transaction, including for example addresses, emails, telephone numbers, type of identity document and number associated with the document, stated purpose for a transaction, manner in which transaction was conducted, and status and opening/closing dates of accounts involved. The compelled disclosure of information to law enforcement can engage a reasonable expectation of privacy and has the potential to engage section 8 of the Charter.
The following considerations support the consistency of these amendments with section 8 of the Charter. The nature of the information is generally information that would enable law enforcement to identify a person, entity or transaction. It does not include detailed or inherently sensitive information. Law enforcement would be required, as they currently are, to seek out more detailed information using other powers currently available to them, including powers that require judicial authorization where appropriate.
Reporting of sanctions-related information
Section 7.1 of the PCMLTFA currently requires persons and entities to report to FINTRAC when they are required to make a report to the RCMP or CSIS regarding terrorist financing under the Criminal Code or the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism. This division would amend section 7.1 to require that businesses also report to FINTRAC if they are required to make a disclosure under an order or regulation made under the Special Economic Measures Act, or under subsection 7.2 of the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law). The compelled disclosure of information can engage a reasonable expectation of privacy, and therefore has the potential to engage section 8 of the Charter.
The following considerations support the consistency of these amendments with section 8 of the Charter. Any expectation of privacy in the information being disclosed to FINTRAC is diminished by the fact that the information will already have been disclosed to law enforcement. The information is relevant to FINTRAC’s mandate because of the close linkages between sanctions evasions and laundering of proceeds of crime, since property obtained through violation of a sanctions law is considered the proceeds of crime for the purposes of the PCMLTFA. The information, like all information disclosed to FINTRAC, will be subject to the various privacy-protecting features of the PCMLTFA scheme.
Special warrant – digital assets
Amendments to the Criminal Code, and related amendments to other statutes, would create a new warrant regime for the search and seizure of digital assets, such as virtual currency. The new warrant regime would allow a judge, where the judge has reasonable grounds to believe that any digital assets may be the subject of an order of forfeiture under subsection 462.37(1) or (2.01) or 462.38(2), to issue a warrant authorizing a person to use a computer program to search for the assets, and to seize the assets including by taking control of the right to access the assets. The regime would also require the person who executed the warrant to take reasonable care to preserve the assets, to notify the person from whom the assets were seized, and to file a report listing the assets and how they were obtained with the clerk of the court within seven days. It would also allow the person who executed the warrant to return the seized assets before such a report is filed if the person is satisfied that there is no dispute as to who is lawfully entitled to possession of the assets and detention of the assets is not required for the purposes of forfeiture. The existing Criminal Code provisions dealing with management orders, restitution of property and review of special warrants would be amended to include searches and seizures made under these new provisions. As the proposed new regime would provide for searches and seizures that could engage a reasonable expectation of privacy, it has the potential to engage section 8 of the Charter.
The following considerations support the consistency of these amendments with section 8 of the Charter. The warrant would be similar to existing judicially-authorized search and seizure powers under the Criminal Code, in requiring that the warrant be authorized by a judge and that it be issued on a reasonable grounds to believe standard. Taking into account that the nature of an electronic search is such that the individual or entity targeted by the search may not be immediately aware of it, the amendments would require notice to the target. This helps ensure the ability of the target to challenge the search or seizure if they see fit to do so.
Application for disclosure of tax information
Section 462.48 of the Criminal Code currently allows the Attorney General to apply ex parte to a judge for an order that obliges the Commissioner of National Revenue or a person designated by the Commissioner to allow a police officer to access information obtained under certain tax statutes, or to produce information and documents containing such information. These orders can currently only be issued for the purpose of investigation into certain offences relating to controlled substances, terrorism, organized crime, and proceeds of crime offences stemming from substance offences. Division 3 of Part 4 would expand the availability of such orders to include investigations into certain offences relating to corruption, human trafficking, extortion and fraud. The disclosure of information to law enforcement has the potential to engage section 8 of the Charter.
The following considerations support the consistency of these amendments with section 8 of the Charter. The additional offences for which such orders would be available have become significant societal concerns and are associated with a high-risk of money laundering. As such, they are offences for which financial information such as tax information can be particularly relevant to an investigation. An order for disclosure of tax information requires prior authorization by a judge, based on reasonable grounds to believe that it would be in the public interest to allow access to the information or documents having regard to the benefit likely to result to the investigation. Such an order must be specific as to the person in relation to which the application is brought and specific as to the nature of the information or document sought.
Division 10 – Economic Sanctions
Division 10 of Part 4 would amend the information-sharing provisions in the Special Economic Measures Act (SEMA) and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) to strengthen Canada’s ability to take economic measures against certain persons. Specifically, it would add the following people to the list of persons authorized to exchange information with each other and with the RCMP for purposes related to the making, administration or enforcement of measures imposed under those laws: the Minister of Transport, the Minister of National Revenue, the Minister of Justice and Attorney General of Canada, and the Minister of Citizenship and Immigration. It would also enact a new provision authorizing the Minister to disclose information relevant to the making, administration or enforcement of measures imposed under the two laws to FINTRAC. Finally, it would amend the PCMLTFA to add the Minister of Foreign Affairs, or a Minister designated under the SEMA or Sergei Magnitsky Law, as a recipient of FINTRAC disclosures when certain conditions are met. Specifically, where information that FINTRAC is required to report to police under section 55(3) of the PCMLTFA is also relevant to the making, administration or enforcement of an order or regulation under the SEMA or the Sergei Magnitsky Law, FINTRAC would also be required to report that information to the Minister of Foreign Affairs or designated Minister. Because these amendments may involve the disclosure of private information, they may engage rights under section 8 of the Charter.
The following considerations support the consistency of these amendments with section 8 of the Charter. The focus of the regimes created by the SEMA and the Sergei Magnitsky Law is the implementation of economic measures against foreign states and foreign nationals who are responsible for breaching international peace or security or who commit gross violations of internationally recognized human rights or acts of corruption. These laws, which are not criminal in nature, support the imposition of sanctions against such foreign states and foreign nationals through various prohibitions or restrictions on engaging in specified activities with them and through the seizure and forfeiture of their property situated in Canada. The information-sharing provisions are tailored to limit any potential interference with privacy interests. The list of persons that may collect and exchange information with one another is clearly set out in the legislation and is limited to parties who are likely to have information relevant to the administration or enforcement of orders or regulations made under the two laws. The authority to exchange information with the Commissioner of the RCMP is only available for a narrow set of purposes that excludes the investigation and enforcement of offences and that reflects the RCMP’s role in the administration of these laws, specifically with respect to the making of orders, the seizure and restraint of property and forfeiture applications. The proposed authority to disclose sanctions-related information to FINTRAC is consistent with the existing approach under the PCMLTFA, under which FINTRAC receives a wide range of information from government institutions or agencies regarding activities that may generate proceeds of crime, in order to carry out its mandate of analysing that information for money laundering and terrorist financing purposes. The proposed amendments to the PCMLTFA are also in keeping with, and subject to the same safeguards as, existing provisions authorizing FINTRAC to disclose designated information to other government institutions and agencies. The PCMLTFA defines the “designated information” that FINTRAC can disclose and limits the circumstances in which such disclosures are permitted. FINTRAC would only be authorized to make disclosures to the Minister of Foreign Affairs, or a Minister designated under the SEMA or Sergei Magnitsky Law, where both of the following conditions are met. First, FINTRAC would have to have reasonable grounds to suspect that the information would be relevant to the investigation or prosecution of a money laundering or terrorist activity financing offence. Second, FINTRAC would also have to determine that the information is relevant to the making, administration or enforcement of an order or regulation made under the SEMA or the Sergei Magnitsky Law.
Division 13 – Canada Pension Plan
Proposed amendments to the Canada Pension Plan would allow information obtained by the Canada Revenue Agency, including information obtained under the Income Tax Act, to be disclosed to Employment and Social Development Canada if the information is necessary for activities related to policy analysis, reporting, and evaluation under the Pension Plan. These amendments could engage privacy interests under section 8 of the Charter.
The following considerations support the consistency of the provisions with section 8 of the Charter. Privacy interests are diminished in the regulatory and administrative contexts. Powers to gather or compel the production of information or disclose relevant information for regulatory or administrative purposes, rather than for the purpose of investigating offences, have been upheld as reasonable under section 8. In reviewing the relevant provisions, the Minister has not identified any potential effects that could constitute an unreasonable interference with privacy as protected by section 8.
Division 18 – College of Immigration and Citizenship Consultants
Division 18 would make a number of amendments to the College of Immigration and Citizenship Consultants Act.
Administering Licensee’s Property
The amendments would allow the College, if a licensee is unable to perform their activities as an immigration and citizenship consultant for prescribed reasons, including because their licence has been suspended or revoked, to apply to a court for an order authorizing the College to administer property in relation to the exercise of those activities, for example, to ensure continuation of services to the licensee’s clients. These orders could include powers to enter a place, examine things, open items, require persons to provide assistance such as the giving of information, and to seize property. Some activities authorized under these orders have the potential to interfere with a reasonable expectation of privacy and therefore engage section 8 of the Charter.
The following considerations support the consistency of the amendments with section 8 of the Charter. Privacy interests are diminished in the regulatory context. Any entry into property would be authorized by a court, which is an impartial arbiter and which would have the ability to impose conditions in the order as it sees fit. Activities authorized under these orders would be necessary for the effective exercise of the College’s regulatory functions, including protecting the public. To the extent that any such orders could have the potential to interfere with professional privilege, the issuing court would have the discretion to impose appropriate conditions to protect the privilege.
Privileged Information
The amendment proposed to subsection 81(2) of the Act would authorize the Governor in Council to authorize the College, in defined circumstances, to pass by-laws related to the circumstances in which the Registrar, the Complaints Committee, an investigator and the Discipline Committee may obtain and use privileged information, the process to be followed by them in order to obtain and use that information and the limits to obtaining and using that information. The ability of the College to access information subject to professional privilege in circumstances that could be set out in by-laws authorized by regulation could engage section 8 of the Charter.
Because many immigration and citizenship consultants are, or work with, legal counsel, effective regulation would be impossible without allowing for some degree of access to documents that are subject to professional privilege. To comply with section 8 of the Charter the regulations will have to limit any interference with professional privilege to what is absolutely necessary for the effective regulation of immigration and citizenship consultants in the public interest.
Division 19 - Citizenship Act modernization
Division 19 would amend the Citizenship Act to provide authority for the administration and enforcement of the Citizenship Act through electronic means and authority to use electronic means in the exercise of powers and performance of duties and functions under the Citizenship Act, including by using an automated system, as well as the authority to make regulations respecting the use and application of those means. The amendments would also provide authority for the collection and use of biometric information from persons who make an application or request under the Citizenship Act, as well as the authority to make regulations setting out the parameters for the collection, use, verification, retention and disclosure of this biometric information.
The power to collect and use biometric information potentially engages section 8 of the Charter. The following considerations support the consistency of these measures with section 8. The collection, use, verification, retention, and disclosure of the biometric information can only be done for the purpose of administering and enforcing the Citizenship Act. Any regulations made with respect to the parameters applying to the use and application of electronic means and the collection, use, verification, retention and disclosure of biometric information must themselves comply with the Charter.
Division 20 - Amendments to the Yukon Act
Division 20 of Part 4 would amend the Yukon Act to authorize the Minister of Northern Affairs to enter any place on certain public real property, to take any measures that the Minister considers necessary to prevent, counteract, mitigate or remedy any adverse effect on persons, property or the environment, for example, a hazard posed by abandoned equipment or structures. The proposed power has the potential to engage section 8 by interfering with privacy interests.
The following considerations support the consistency of the proposed power with section 8 of the Charter. First, the power would be available for regulatory, not penal, purposes, to assist the Minister in protecting persons, property or the environment in circumstances where privacy expectations are diminished. Second, the exercise of the Minister’s powers is limited to measures that are considered necessary to prevent, counteract, mitigate or remedy any adverse effect on persons, property or the environment. As well, the power would not be available for places that are designed to be used and are being used as a private dwelling-place. The proposed powers are similar to inspection powers upheld as reasonable under section 8 of the Charter in the regulatory context.
Division 21 – Amendments to the Canada Shipping Act, 2001 and Marine Liability Act
Division 21 of Part 4 includes a number of amendments to strengthen marine safety and environmental protection by closing critical gaps in the marine safety system. The proposed amendments would provide authorities to proactively prevent and respond to marine emergencies by authorizing the Minister of Transport to direct persons and make interim orders in the case of risks involving marine safety or the environment. The amendments would also allow for regulations respecting arrangements for emergency services, and would provide for additional compliance and enforcement measures by expanding existing offences and administrative monetary penalties, as well as increasing the maximum fines for certain offences.
The proposed amendments in relation to risks involving marine safety or the environment would include extending existing powers to require information for purposes related to the administration and enforcement of the Act, potentially engaging section 8 of the Charter.
The following considerations support the consistency of the provisions with section 8. The information requirements would not be available to further a penal investigation. Rather, they would be available for administrative purposes, to ensure compliance with new regulatory requirements under the Act. In these circumstances, privacy expectations are diminished. Further, similar powers for regulatory or administrative purposes have been upheld as reasonable under section 8.
The amendments would also expand existing offence provisions to sanction contraventions of new requirements relating to pollution prevention and emergency services, including, among other things, requirements to provide information as well as obligations applying to hazardous and noxious substances handling facilities. As the new offences could lead to imprisonment, the amendments potentially engage the right to liberty under section 7 of the Charter. In reviewing the provisions, the Minister of Justice has not identified any potential inconsistencies with the principles of fundamental justice under section 7. The scope of the offences is tailored to their objectives, and upon conviction, a judge will have discretion to impose a fit and appropriate sentence.
Lastly, the amendments would make contraventions of certain regulatory requirements violations for the purpose of the existing administrative monetary penalty regime under the Act and Administrative Monetary Penalties and Notices (CSA 2001) Regulations. Under the regime, penalties could be imposed where the Minister has reasonable grounds to believe that a violation has been committed. Administrative monetary penalties could give rise to the possibility of substantial monetary penalties and therefore could potentially be perceived as impacting section 11 rights.
The following considerations support the consistency of the provisions with the Charter. The proceedings leading to the imposition of a monetary penalty would be administrative in nature. Further, the administrative penalty regime would allow the Minister to make discretionary decisions to impose a penalty to promote regulatory compliance, rather than to impose punishment. In this context, the provisions would not authorize the imposition of a penalty that could give rise to true penal consequences for the purpose of section 11.
Division 22 - Canada Transportation Act – Strengthening Transportation Systems
Division 22 of Part 4 would amend the Canada Transportation Act to provide the Minister of Transport the authority to compel certain federally-regulated entities and entities using the federally regulated transportation system to provide and share prescribed information, while also requiring protection of confidential information. The proposed amendments also provide an authority to introduce a temporary extension of the interswitching limit, for the transfer of traffic between two railways, in Alberta, Manitoba, and Saskatchewan, along with a requirement to provide certain information relevant to assessing the effects of the interswitching limit. These requirements to share information potentially engage section 8 of the Charter.
The following considerations support the consistency of these requirements with section 8. The purpose of the measure is to support the efficiency of the transportation system, including planning and managing operations. In the regulatory and administrative contexts, privacy expectations are reduced. Powers to gather, compel the production of, or disclose relevant information for regulatory or administrative purposes, rather than for the purpose of investigating offences, have been upheld as reasonable under section 8. In reviewing the relevant provisions, the Minister has not identified any potential effects that could constitute an unreasonable interference with privacy as protected by section 8 of the Charter.
Amendments would also clarify that contravention of certain provisions of the Canada Transportation Act and regulations made under it would be subject to administrative monetary penalties. The amendments could result in the imposition of substantial monetary penalties and therefore have the potential to impact section 11 rights.
The following considerations support the consistency of these amendments with the Charter. The proceedings leading to the imposition of a penalty would be administrative in nature. The purpose of these penalties would be to promote compliance with the Act rather than to “punish” as that concept is defined for the purposes of section 11 of the Charter. The amendments, properly construed and applied, would not authorize the imposition of a penalty that could give rise to “true penal consequences.” Finally, penalties would be subject to civil enforcement in a superior court but could not result in imprisonment for non-payment.
Division 23 - Canada Transportation Act – Air Travel Complaints
Division 23 of Part 4 would amend the Canada Transportation Act (the Act) to replace the current process for resolving air travel complaints with a more streamlined process that imposes a greater burden of proof on air carriers. The amendments would also expand the Canadian Transportation Agency’s regulation-making powers in respect of air carriers’ obligations towards passengers, enhance the Agency’s enforcement powers with respect to the air transportation sector, and make related and consequential amendments.
The amendments would replace the current adjudication-based complaints process with a process whereby complaint resolution officers would make binding decisions in the event that mediation was unsuccessful. The new complaint resolution process would generally be confidential, as is typical for a mediation process, although information that is relevant to the complaint can be made public upon agreement of the parties. Moreover, at the Agency’s discretion and upon the request of a complainant or air carrier, any part of an order made by a panel of two or more Agency members acting as complaint resolution officers could be kept confidential, other than information that must be included in the summaries of orders made by a single complaint resolution officer. The confidentiality provisions could potentially engage freedom of expression under section 2(b) of the Charter, which protects the open court principle whereby judicial proceedings are presumptively open to the public and the media.
The following considerations support the consistency of the confidentiality provisions with section 2(b) of the Charter. The new complaint resolution process is not intended to be a court-like process. Notably, no hearing before a complaint resolution officer is contemplated, and complaint resolution officers would act on information rather than hear or assess evidence. The Act currently provides for confidential dispute resolution processes, namely the current mediation process for air passenger complaints as well as final offer arbitration decisions and level of service arbitration decisions for disputes in the rail sector. Air passenger complaints are private disputes which generally do not attract significant public interest. The Agency would still be required to make public the orders made by a panel of two or more Agency members acting as complaint resolution officers, and a summary of the orders made by a single complaint resolution officer. The Agency’s discretionary power to keep confidential any part of an order by a panel of two or more Agency members acting as complaint resolution officers must be exercised reasonably. The new complaint resolution process strikes a reasonable balance between the timely and efficient resolution of air passenger complaints, on the one hand, and public accountability and openness, on the other hand.
This Division provides that information provided to a complaint resolution officer by a complainant or an air carrier for the purpose of dealing with the complaint could be disclosed in certain circumstances, namely to communicate information to the Agency; to communicate information to other complaint resolution officers for assisting them in the performance of their duties; for publishing the orders or a summary of the orders of complaint resolution officers; and for including general information about complaints in the Agency’s annual reports. This provision of the Bill authorizing the sharing of information could potentially engage section 8 of the Charter, as the information could bring privacy interests into play.
The following considerations support the consistency of the provision with section 8 of the Charter. Most of the information disclosed in the course of the complaint resolution process is unlikely to attract significant privacy interests. The provision would allow for sharing of information that is consistent with the purposes for which the information was initially provided, including the effective administration and enforcement of the Act. The summary of orders by a single complaint resolution officer would only include generic information. The orders made by a panel of two or more Agency members acting as complaint resolution officers would be published in their entirety, unless the Agency decides otherwise upon request, because they would normally pertain to more complex matters for which there may be greater public interest. The information to be included in the Agency’s annual reports about complaints would not contain any information that could attract privacy interests, as it would be more general information describing the number and nature of complaints, which carriers they were made against, and systemic trends observed.
The Act currently establishes an administrative monetary penalty regime, including for contraventions of air passenger regulations. The amendments would substantially increase the prescribed maximum in the case of a violation involving a contravention of those regulations by a corporation. It would also allow persons who have been served with a notice of violation in respect of provisions of air passenger regulations to request to enter into a compliance agreement with the Agency instead of paying the penalty. Failure to comply with the agreement, if any, would result in a penalty twice the amount of the penalty that would have been payable had the person not entered into the arrangement. The Bill further provides that a person who has been served with a notice of violation involving a contravention of air passenger regulations and who does not pay the penalty, file a request for review with the Transportation Appeal Tribunal of Canada or make a request to enter into a compliance agreement is deemed to have committed the contravention alleged in the notice of violation. The amendments could result in the imposition of substantial monetary penalties and therefore could potentially engage section 11 of the Charter, which confers rights on persons charged with an offence.
The following considerations support the consistency of these amendments with section 11 of the Charter. The proceedings leading to the imposition of a penalty would be administrative in nature. The purpose of these penalties would be to promote compliance with the Act and, in particular, to discourage abuse of compliance agreements – rather than to “punish” as that concept is defined for the purposes of section 11 of the Charter. The penalties would not be subject to any prescribed minimums, and would be subject to maximums set out in the Act, or lower maximums prescribed by regulation. The amendments, properly construed and applied, would not authorize the imposition of a penalty that could give rise to “true penal consequences.” Finally, penalties would be subject to civil enforcement in a superior court but could not result in imprisonment for non-payment.
Division 24 - Traveller Modernization
Division 24 of Part 4 would amend the Customs Act to, among other things, allow a person arriving in Canada to present themselves to the Canada Border Services Agency (CBSA) by a means of telecommunication, where available, including for example self-service processing tools such as Primary Inspection Kiosks, eGates and mobile applications. This would remove the current requirement that all travellers arriving in Canada present themselves to an officer in person. The amendments would require that travellers presenting to the CBSA provide certain information, which may include a photograph in the case of presentation by telecommunication. The amendments would also require that, subject to the regulations, commercial air operators transport baggage to an international baggage area designated by the President of the CBSA.
The power to require the production of information when presenting to the CBSA potentially engages section 8 of the Charter. The following considerations support the consistency of these measures with section 8. A traveller’s privacy interests when presenting at a border for customs purposes are generally diminished given the circumstances and importance of controlling entry to the country. The information collected will be limited to only what is required by the CBSA and is related to the performance of a customs officer’s duties under the Customs Act or any other Act. For example, the collection of a traveller’s photograph when they are presenting by telecommunication may be necessary to support identity verification in the absence of in person examination. In addition, a traveller may choose to avoid providing a photograph (or any other information required to present by telecommunication) by instead presenting in person.
Division 27 – Food and Drugs Act – Natural Health Products
Division 27 of Part 4 would amend the definition of therapeutic product in the Food and Drugs Act (FDA) to remove the existing exemption for natural health products within the meaning of the Natural Health Products Regulations. The result would be that the existing provisions of the FDA dealing with therapeutic products would now equally apply to natural health products. These include a number of powers that can be exercised by the Minister, including powers to require and disclose information, to order the modification of labels and packaging, to order the recall and stop sale of a product, and to require tests, studies and assessments. The existing FDA provisions also include prohibitions on providing false or misleading information to the Minister, obligations on the part of holders of a clinical trial authorization to publish prescribed information concerning clinical trials, and obligations on the part of health care institutions to provide prescribed information to the Minister about serious adverse drug reactions or medical device incidents. The existing FDA provisions also enable the Governor in Council to make regulations concerning therapeutic products, and include offences with respect to contraventions of the FDA and instruments made under the FDA. Since contravention of these provisions (and of orders and regulations made under them) is punishable by imprisonment, the provisions have the potential to engage section 7 of the Charter, which guarantees the right to liberty. Various existing regulatory powers that would be available in respect of natural health products also have the potential to engage other sections of the Charter, including for example section 2(b) (freedom of expression) and section 8 (search and seizure).
The Minister has not identified any potential inconsistencies with the Charter, if these existing provisions and powers under the FDA and its regulations are extended to also apply to natural health products. The FDA definition of “drug” already includes the natural health products that would now be subject to the FDA’s therapeutic product provisions. Such natural health products therefore raise similar regulatory considerations as other therapeutic products, because they are also products that are manufactured, sold or represented for use in relation to the health or well-being of humans. The FDA’s regulatory scheme for therapeutic products is well-established. Its requirements, which would be extended to natural health products as a result of the amendment, depend on the exercise of powers by the Minister and by the Governor-in-Council. The FDA provides a wide degree of latitude for these powers to be used in a manner consistent with the Charter, taking into account the purposes of the FDA and any potential impacts on Charter-protected interests.
Division 28 – Food and Drugs Act – Animal Testing
Division 28 of Part 4 would make several amendments to the Food and Drugs Act.
Prohibitions
This division would include prohibitions on the conduct of animal testing that could cause pain, suffering or injury; the sale of cosmetics whose safety can only be established through animal testing that could cause pain, suffering or injury; and claims that a cosmetic was not tested on animals without evidence to support the claim.
A contravention of the prohibitions would constitute an offence under the Food and Drugs Act. As the penalty for these offences includes a term of imprisonment, the amendments potentially engage the right to liberty under section 7 of the Charter.
In reviewing the measures, the Minister of Justice has not identified any potential inconsistencies with the principles of fundamental justice under section 7. The scope of the offences is tailored to the objective of preventing harms associated with the testing of cosmetics on animals. The offences would prevent any person from making false or misleading “cruelty free” claims on a cosmetic that the cosmetic was not tested on animals. The offences would also prevent any unnecessary cosmetic testing on animals, which would cause them pain, suffering or injury, in order to establish the safety of the cosmetic.
Labelling and advertising prohibition
One of the provisions would prohibit any person from making a claim, on a label of a cosmetic or in an advertisement for a cosmetic, that is likely to create an impression that the cosmetic was not tested on animals, unless the person has evidence to support the claim. The person must provide the Minister such evidence upon the Minister’s request.
The purpose of the provision is to prevent the making of false or misleading “cruelty free” claims on a cosmetic, by a manufacturer, seller, or importer of a cosmetic, or any person acting on their behalf, such as an advertiser or beauty influencer, that the cosmetic was not tested on animals.
The prohibition of such claims on the label of a cosmetic or in an advertising for a cosmetic would likely engage the right to freedom of expression under section 2(b) of the Charter. Section 2(b) protects freedom of expression and generally extends to advertising and other expression that is done for commercial purposes, including commercial expression by corporations and individuals.
The following considerations would support the consistency of the provision with section 2(b) of the Charter. The provision prevents false or misleading “cruelty free” claims that a cosmetic was not tested on animals, as it allows for claims to be included on a label or in an advertisement only when the claim can be supported with evidence. In addition, while a prohibition on commercial expression can engage the right to freedom of expression, it usually does not implicate the core values of the right, which include the search for political, artistic and scientific truth, the protection of individual autonomy and self-development, and the promotion of public participation in the democratic process. The fact that the expression is commercial in nature is a relevant factor in determining whether any limits on that expression are justifiable under the Charter.
Power to Require Evidence
Any person who makes a claim on a label of a cosmetic or in an advertisement for a cosmetic that is likely to create an impression that the cosmetic was not tested on animals is required to provide evidence to the Minister to support the claim, upon the Minister’s request. The power to require the production of evidence potentially engages section 8 of the Charter.
The following considerations support the consistency of this power with section 8. Privacy interests are diminished in the regulatory and administrative contexts. Statutory powers to require the production of relevant information for regulatory or administrative purposes, rather than for the purpose of investigating criminal offences, have been upheld as reasonable under section 8. In reviewing the relevant provision, the Minister of Justice has not identified any potential effects that could constitute an unreasonable interference with privacy as protected by section 8.
Division 29 – Dental Care Measures Act
Division 29 would enact the Dental Care Measures Act. This Act would require every current or former employer, who is required to make an information return under the Income Tax Act and Regulations, to include information about whether an employee or retiree, called a “payee”, or their family members are eligible to access any dental care insurance, or coverage of dental services of any kind, offered by the current or former employer in respect of the payee’s employment or their spouse’s employment. There would also be authority for the Minister of National Revenue to collect and disclose the information to the Minister of Health, or to an official of the Department of Employment and Social Development, for the purposes of the administration and enforcement of the Canadian Dental Care Plan or for the development or evaluation of policy for that plan. Further, the Minister of Health would be authorized to collect and use the Social Insurance Number of a person who makes an application under the Canadian Dental Care Plan, for the purposes of the administration and enforcement of the plan. Finally, there would be authority for the Minister of Health to impose a penalty of $100 on a person for each violation under the Act, such as knowingly making a false or misleading representation in the information return. The purpose of the penalty is to promote compliance with the Act rather than to impose punishment.
Authorizing the collection, disclosure and use of personal information could engage section 8 of the Charter. The following considerations support the consistency of the amendments with section 8. The purpose of authorizing the collection, disclosure and use of the information is to assist with the administration and enforcement of the Canadian Dental Care Plan or the development or evaluation of policy for that plan. In the regulatory and administrative contexts, privacy expectations are reduced. The proposed authorities are similar to existing powers that have been upheld by the courts in the administrative and tax contexts. In reviewing the relevant provisions, the Minister has not identified any potential effects that could constitute an unreasonable interference with privacy as protected by section 8 of the Charter.
Imposing a penalty of $100 on a person for each violation of the proposed Act could potentially engage section 11 of the Charter. The following considerations support the consistency of the monetary penalty with section 11. The imposition of a monetary penalty would be administrative in nature, and the purpose would be to promote compliance with the Act, and not to “punish”. In this context, the imposition of a penalty would not give rise to “true penal consequences” for the purpose of section 11 of the Charter.
Division 30 – Amendments to the Canada Post Corporation Act
Division 30 of Part 4 proposes to amend subsection 41(1) of the Canada Post Corporation Act, which authorizes the Canada Post Corporation to inspect any mail, other than a letter, to monitor for compliance with legal requirements. These legal requirements protect the safety, integrity and efficiency of the postal system, preventing it from being used to send dangerous goods, contraband or other non-mailable matter. This division would amend subsection 41(1) to limit its use to circumstances in which there is a reasonable suspicion that the non-letter mail does not meet the legal requirements applicable to packages sent by mail. Because this inspection power has the potential to affect privacy interests, section 8 of the Charter may potentially be engaged.
The following considerations support the consistency of the amendments with section 8. The inspection power furthers important objectives, such as protecting the safety of the public and postal workers, preventing the postal system from being used for criminal purposes, and assuring an efficient postal system. The inspection power would be available for the regulatory purpose of determining whether non-letter mail complies with the applicable legal standards. The purpose of the clause is to enhance privacy protection as the Canada Post Corporation advances important statutory objectives. By requiring the Canada Post Corporation to first have a reasonable suspicion that the legal standards applicable to the mail system have not been met in order to inspect non-letter mail, the amended provision would introduce an additional limit on the use of the power. Tailoring the provision in this way will assist to ensure the powers given to the Canada Post Corporation are reasonable.
Division 33 – Legislation Related to Financial Institutions
Division 33 of Part 4 proposes to enhance the federal financial regulatory framework to better address security and integrity risks and challenges, particularly those arising from foreign interference and national security threats. The amendments would aim to improve the overall supervision and monitoring function of the Office of the Superintendent of Financial Institutions and to provide a suite of additional intervention tools to the Minister of Finance and the Superintendent in the Bank Act, the Trust and Loan Companies Act, and the Insurance Companies Act.
Amendments would expand the scope of the Superintendent’s existing duties to examine financial institutions, to include whether they have adequate policies and procedures to protect themselves against threats to their integrity or security. In support of these examination duties, the Superintendent has the right to access financial institutions’ records and the authority to require financial institutions to provide relevant information.
More generally, the Superintendent is authorized to order financial institutions to produce documents necessary to monitor them for compliance with applicable statutes. The Bill would expand these production powers to include monitoring financial institutions for the adequacy of their policies and procedures to protect themselves against threats to their integrity or security, including foreign interference.
Expanding the powers of the Superintendent to access and obtain information from financial institutions may intrude upon those institutions’ and their clients’ reasonable expectations of privacy, and so potentially engages section 8 of the Charter.
The following considerations support the consistency of these powers with section 8 of the Charter. Privacy interests are diminished in regulatory contexts, including in the highly regulated financial services sector. Under these circumstances in the financial services sector, regulators generally do not require a warrant or other authorization from a court before intruding on protected privacy interests in order to monitor for compliance with regulatory requirements. The powers in question serve the important objective of enabling the Superintendent to monitor the adequacy of financial institutions’ protection against threats to their integrity and security, in order to protect financial institutions’ clients and the broader health and security of Canada’s financial services sector and economy. The Superintendent cannot access or obtain information from financial institutions unless it is relevant to the regulatory objectives. Further, under section 22 of the Office of the Superintendent of Financial Institutions Act and similar provisions in the Trust and Loan Companies Act, Bank Act and the Insurance Companies Act, information obtained as a result of the administration and enforcement of those Acts is confidential and must be treated accordingly. Powers to gather or compel the production of relevant information for regulatory monitoring and compliance purposes, rather than for the purpose of investigating offences, have been upheld routinely by the courts as reasonable under section 8 of the Charter.
In granting approvals under the Trust and Loan Companies Act, Bank Act and the Insurance Companies Act, or revocations, suspensions, and amendments to those approvals, the Minister of Finance can require undertakings from the regulated financial institution. The Bill would authorize the Minister to designate as confidential specified information about an undertaking or information that could reveal the existence of the undertaking if its disclosure could pose a threat to the integrity or security of the financial institution to which the undertaking relates or could be injurious to national security. This authority could be used in a scenario where the Minister requires a regulated financial institution to put in place specific measures to protect itself against threats to its integrity or security. In such a scenario, disclosing the existence or nature of these measures could publicize potential vulnerabilities in the financial sector. Disclosing information designated as confidential would be generally prohibited, subject to any terms and conditions specified by the Minister. A disclosure of information in violation of the confidentiality requirements would be an offence.
A prohibition on disclosing confidential information that is potentially punishable by a term of imprisonment could restrict a person’s freedom to communicate that information and so potentially engage their freedom of expression, which is protected by section 2(b) of the Charter. Such a prohibition could also deprive individuals of their liberty, which under section 7 of the Charter must be done consistently with the principles of fundamental justice.
The following considerations support the consistency of the confidentiality provisions with section 2(b) of the Charter. Confidentiality would be required in order to further the pressing and substantial objectives of protecting national security and/or the integrity or security of a financial institution. In specifying the information to be kept confidential, and any terms or conditions governing its confidentiality, the Minister would be able to reasonably and proportionately balance the public interests at stake with any freedom of expression that may potentially be engaged by limits on disclosure.
In reviewing the provisions, the Minister of Justice has not identified any potential inconsistencies with the principles of fundamental justice under section 7. The morally innocent – for example, persons who may reasonably be unaware that the Minister has specified certain information as confidential – cannot be convicted of an offence and punished to a term of imprisonment. At a minimum, conviction carrying the possibility of imprisonment requires negligence on the part of an accused.
Division 34 – Criminal Interest Rate
Division 34 would make amendments to the criminal interest rate measures in sections 347-347.1 of the Criminal Code to protect against predatory lending and to better protect consumers. These measures provide that a person who enters into an agreement or arrangement to receive interest above a certain rate will be guilty of an offence. Among the amendments are a change to the way in which the criminal rate of interest is calculated so that it uses an annual percentage rate (APR), and a reduction in the criminal rate of interest to an APR that is more than 35%. The amendments would also enact an authority for the Governor in Council, on the recommendation of the Minister of Justice and in consultation with the Minister of Finance, to make regulations that would exempt certain types of credit agreements and arrangements from the application of the criminal interest rate offence in section 347 of the Criminal Code, such as complex commercial transactions. As the sanctions for the criminal interest rate offence include a term of imprisonment, the amendments engage the right to liberty under section 7 of the Charter.
The following considerations support the consistency of the amended criminal interest rate provisions with section 7. Under the amendments, the criminal interest rate offence would have the objective of addressing the issue of predatory lending that takes advantage of economically vulnerable people in Canada. The proposed new lowered criminal rate of interest would allow for criminal sanctions for consumer loans charging interest well above standard acceptable rates. Meanwhile, the authority for regulations would allow for exemptions from criminal liability for credit agreements and arrangements that are outside of the purpose of the criminal interest rate restrictions, such as for complex commercial transactions between well-informed business entities where the nature of the short-term financing used might otherwise lead to violations of the offence in section 347 of the Criminal Code.
Division 38 – Employment Insurance Board of Appeal
Division 38 of Part 4 would amend the Department of Employment and Social Development Act to establish the Employment Insurance Board of Appeal (Board of Appeal). One of the provisions gives the Canada Employment Insurance Commission the authority to set out in regulations the circumstances under which the Board of Appeal may hold hearings in private. The authority to allow for hearings held in private potentially engages section 2(b) of the Charter.
The following considerations support the consistency of this provision with section 2(b). The proposed amendments would enable the Canada Employment Insurance Commission to prescribe in regulations the circumstances under which the Board of Appeal may hold hearings in private. Respect for the open court principle is important to ensuring freedom of the press and the ability of the public to access information about Board of Appeal proceedings. However, in some circumstances privacy considerations may outweigh the open court principle. Specifically, private hearings may be necessary in certain circumstances to protect the privacy of persons going before the Board of Appeal, whose information is often of a highly sensitive nature, such as medical reports. Any regulations setting out the circumstances under which hearings may be held in private must themselves comply with the Charter.
- Date modified: