Finance Committee on May 8th, 2018

[Ann Sheppard]

It can't apply. There's an exclusion for situations where there has been serious bodily harm or death. It cannot apply in those situations.

In answer to your first question, it was not motivated by any particular case, but it's something that is being considered in other countries or has been in place in other countries. It's been in the U.S. since the 1930s, but they've started using it more since the Enron case, when a lot of employees lost their jobs. The U.K. has enacted it. Australia has legislation going through their house right now.

It's something that businesses have said that we should be looking at in Canada. It was part of an economic crime consultation. There were two discussion streams. One was on the regime for procurement debarment. It went forth as an economic crime consultation in that context.

[The Chair, Liberal, Wayne Easter]

Ms. Sheppard, what I'm hearing to a great extent here is that nobody is arguing against the concept, but there is a huge question of whether this should be in a budget bill. Even I will say that.

Mr. Poilievre, did you want in?

[Pierre Poilievre, Conservative, Carleton, ON]

Yes.

I just want to make sure I understand the provision. Division 20 of part 6 would allow those who are suspected of the crimes of stolen property, fraud, insider trading, and bribery of a foreign public official to avoid prosecution by signing onto a deferred prosecution agreement, obeyance of which would allow them to avoid charges altogether and prevent prosecution from pursuing them on the same offence.

Do I have that right?

[Ann Sheppard]

Almost, but they would have to be charged for the agreement—

[Pierre Poilievre, Conservative, Carleton, ON]

They would have to have been charged.

[Ann Sheppard]

That's why we call them “accused”; we refer to “accused” at the outset.

The prosecutor would have to be convinced that the prosecution threshold had been such that there was a prospect of conviction, that the evidence was there. They could invite them to negotiate the terms, but the agreement itself could not be approved until the court was satisfied that they had been charged. They could be charged years ago or right up until the last minute, but they have to have been charged before the agreement could be approved by the court and take effect.

[Pierre Poilievre, Conservative, Carleton, ON]

What would you say is the precise difference between this and a guilty plea?

[Ann Sheppard]

The guilty plea would result in a conviction.

[Pierre Poilievre, Conservative, Carleton, ON]

Right, whereas this would mean that they would have no conviction.

Would there be any penalty?

[Ann Sheppard]

The penalty would be the terms of the agreement, and as I mentioned, there are mandatory terms. They have to pay a fine, a financial penalty. They have to forfeit any profits that they have obtained and disgorge any benefits they have as a result of their conduct. They would have to make reparations to victims or explain why they can't do that. They would have to pay a victim surcharge. Especially if compliance monitoring is involved, they would have to pay for that, which can be very significant financially. They would have to make a sincere effort to comply.

First of all, it's up to the prosecutor to determine, in their absolute discretion, whether to offer to negotiate. They have to be convinced that it's in the public interest, and the court has to be convinced that it's in the public interest. Also, partway through, either party can withdraw from negotiations, or the prosecutor can apply for termination. If they don't believe the compliance and remediative effect is being achieved, they can terminate and resume the prosecution. There's the threat of that, too, out there until it's finished.

[Pierre Poilievre, Conservative, Carleton, ON]

Are these all offences that are prosecuted by the Director of Public Prosecutions or the Public Prosecution Service of Canada?

[Ann Sheppard]

Not necessarily. They could be prosecuted by the provincial prosecutors as well.

[Pierre Poilievre, Conservative, Carleton, ON]

Yes, because it's in the Criminal Code.

[Ann Sheppard]

Unless the Public Prosecution Service of Canada is operating within the—

[Pierre Poilievre, Conservative, Carleton, ON]

Yes, contract prosecution.

[Ann Sheppard]

Yes. The AG's consent is required as delegated, so it would likely not be private prosecutors but any public prosecutor.

[Pierre Poilievre, Conservative, Carleton, ON]

By the AG, you mean that the authority, for example, at a federal level is delegated to the DPP, and at the provincial level is delegated to the crown attorney bureau in their respective province.

For such agreements to occur, would the public prosecutor have to agree that this is an appropriate remedy? Okay, so this would not. If someone were charged with these offences, they would not automatically have recourse to this deferred prosecution agreement. It would only occur if lawyers from the defence and the prosecutors agreed that it was appropriate.

[Ann Sheppard]

The prosecutor has to be convinced that negotiating the agreement is in the public interest and appropriate in the circumstances, and then there are a series of factors the prosecutor has to consider in determining whether that's the case. There are the circumstances in which the act or omission came to light. Did they disclose proactively or did they hide their conduct? There's the gravity of the omission, whether corruption was rampant throughout the senior ranks, and whether the organization has taken disciplinary measures against the individuals who caused it. There are a whole bunch of factors they would have to take into account in arriving at the determination that it's in the public interest, and they are under no obligation to offer this when it's at their discretion.

[Pierre Poilievre, Conservative, Carleton, ON]

Did this come from any kind of recommendation from provincial prosecution services? Who asked for this?

[Ann Sheppard]

It came as a result of a public consultation. It was a Government of Canada consultation, as I mentioned, that had two discussion streams. It was a broad consultation. There were NGOs, accountants, business associations, prosecutors, small and medium-sized enterprises, so there was quite a diversity of views. Individual prosecutors made submissions. It attempts to respond to the feedback that was given by the vast majority, actually.

[Pierre Poilievre, Conservative, Carleton, ON]

Okay.

[The Chair, Liberal, Wayne Easter]

Mr. Albas, you have the last question, I believe.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

I'm going to actually ask some questions now.

In regard to this, I would say probably the attorney general of each province would be the one to decide whether or not they would actively use these DPAs. Is that correct?

[Ann Sheppard]

Do you mean the remediation agreement?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Yes, the remediation agreements. They would be the ones who decide whether or not they were appropriate to be used in their jurisdiction. Is that correct?