Debates of Sept. 15th, 2003

Criminal Code

[Paul MacKlin, Liberal, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Mr. Speaker, just before the break we were talking about the issue of probation as it related to Bill C-45 and I would like to carry on with that thought.

Probation is possible for a corporation but it is virtually never imposed. We believe there may be circumstances where the court wants to ensure as best it can that the corporation will change its ways and commit no further crimes and recognizes that a heavy fine would cripple the corporation's efforts to reform.

In those circumstances probation makes sense for the corporate offender. Accordingly, we propose that a court be able to order an organization to establish policies to reduce the likelihood of further criminal activity, to communicate those policies to employees, to name a senior officer to oversee their implementation and to report periodically to the court.

We propose as well to give the court the power to order the organization to inform the public of the offence, the sentence and remedial measures being undertaken by the organization. Not only will this allow the public to decide whether it wishes to continue to do business with the organization after the conviction, we believe it could also be a powerful deterrent. No corporation would want to risk having to take out ads in the various media to tell Canadians it has been criminally negligent or it has been committing fraud.

Finally, we are proposing that the maximum that can be imposed on a corporation for a summary conviction offence be quadrupled to $100,000 from its $25,000.

The changes that we are proposing will give Canada a regime for determining the criminal liability of organizations and for sentencing them in a manner that is appropriate for the complex business arrangements that are common today.

I am proud to present Bill C-45 to the House for its consideration.

[Vic Toews, Canadian Alliance, Provencher, MB]

Mr. Speaker, I am pleased to rise today to discuss this bill, an act to amend the Criminal Code (criminal liability of organizations).

The incident that took place in the Westray Mine near New Glasgow, Nova Scotia in 1992, in which 26 miners were killed, resulted from gross negligence on the part of managers, directors and workplace inspectors. It was a tragedy that could have been prevented. It was a crime that should never have taken place.

I think it is appropriate that we have this discussion to determine whether that action on the part of the corporation and its directors in fact should result in the criminal penalties being proposed here.

The inquiry released in November 1997 by Mr. Justice Peter Richard made the recommendation for the federal government to institute a study of the accountability of corporate executives and directors for the wrongful or negligent acts of the corporations and suggested that the government introduce amendments to ensure that corporate executives and directors are held accountable for workplace safety and health.

In the last session of Parliament, a private member's bill to deal with this issue, Bill C-284, was approved in principle by all parties in the House of Commons, including the Canadian Alliance. However, at that time we cited concerns about the legislation and maintained that certain constitutional issues must be addressed before the bill could be passed.

In May 2002, the justice committee referred the subject matter to the Department of Justice in order to draft legislation in accordance with the objectives of the bill. The result is Bill C-45.

Bill C-45 accomplishes three main goals: first, it makes changes to the Canada Labour Code to protect against workplace hazards; second, through changes to the Criminal Code, if employers and managers do not take reasonable measures to protect employee safety and harm results, the organization could be charged; and third, it expands conditions for liability.

I fully agree that the issue of corporations providing safe working conditions for employees must be addressed by the federal law. I agree that it is not sufficient that we simply have provincial legislation in place. However, I would at the same time caution members of the House against passing legislation that could be legally or constitutionally flawed. If the legislation is in fact put to use in the future, let us not put the families of future victims through the agony of a trial only to find out that there are legislative or constitutional flaws that make the entire legal proceeding under these provisions defective.

It should be noted that one defence that previously existed under the Criminal Code has been repealed by this legislation. For example, section 391 of the Criminal Code states:

Where an offence is committed under section 388, 389 or 390 by a person who acts in the name of a corporation, firm or partnership, no person other than the person who does the act by means of which the offence is committed or who is secretly privy to the doing of that act is guilty of the offence.

Without this defence, concerns have been raised that a person could be held responsible for an offence even if he had no knowledge of the commission of that offence. While the motivation behind the bill and its predecessors are obviously well intentioned, and I think strive to meet an existing need, we must carefully consider the implications of these amendments. That is why we need to be careful in the context of our constitutional framework to ensure that they do in fact comply with the requirements of our Constitution.

In further discussion on the bill it must be remembered that the one of the principal reasons that businesses choose to incorporate in the first place is to protect shareholders and directors from personal liability arising from the activities of the business. I am not suggesting that simply because individuals have arranged their affairs in such a way as to avoid personal responsibility it should excuse criminal conduct. Criminal conduct should be punished whether it is done directly by individuals or indirectly through the mechanism of the corporation.

Executives, directors or other officers and employees of the corporation presently do not and should not have the benefit of immunity from criminal liability. Under our current Criminal Code provisions, they are legally accountable for their own personal wrongdoing. As well, corporations can be held criminally liable in their own right. In cases of offences of absolute or strict liability, a corporation would be subject to penal liability for unlawful acts or omissions of such persons who, because of their position or authority in the corporation, may be said to constitute the directing mind of the corporation.

However, this bill expands further conditions of liability, which must be carefully studied once the legislation is referred to the committee.

Another matter to consider is that this legislation could create concerns among corporations, be they large or small, successful or struggling. I am not suggesting that we jeopardize the health or safety of our workers at the expense of economic growth and jobs, but we do have to be mindful of the impact that these amendments may have if the legislation is not legally or constitutionally sound.

Furthermore, some businesses may have difficulties in attracting viable candidates to sit on a board with the prospect of such Criminal Code penalties. Smaller or struggling companies would be at a particular disadvantage if such standards for accountability were universally applied.

The question that must be asked is whether these provisions will dissuade from managing corporations precisely those who could provide the appropriate guidance to strengthen the health and safety of the workers. If we pass legislation, will it discourage those individuals in our society who would make responsible directors and managers from in fact directing and managing those corporations? If by our legislative action we frighten those individuals, we then leave corporations in the hands of those who do not care about the safety of workers and that is a situation that we need to avoid. Given the civil liability that has attached to directors, will this increase the difficulties that many corporations find in attracting qualified and competent directors?

I think everyone here wants a safe workplace. They want viable economic units that create jobs and keep the engine of wealth moving in this country. We need to balance these concerns against some of the proposals being made here. I am not in a position yet to say whether these amendments in fact do that in an inappropriate way. On a reading of the legislation, I find much to commend it.

We do not want to create the situation where we dissuade competent people from becoming the directing minds of corporations. We want to encourage competent people who exercise sound skill and judgment to continue working through the vehicle of corporations to ensure that jobs are preserved and created in Canada.

Again, that is an issue we need to bear in mind given the difficulty that many corporations today may have in attracting directors to their boards.

In summary, I think it is important to be careful that this legislation does not open up the door to penalties for people who may not have acted with criminal intent. That, I think, is the major issue the House needs to consider. Our Constitution does not support imposing criminal penalties where there is no criminal intent. If we pass legislation that is constitutionally flawed, it does not help the families of those workers who may face a tragedy in the future. I want to hear from witnesses at the justice committee before formally proposing any amendments to the legislation.

I would like to note that the member for Kootenay--Columbia and other Canadian Alliance representatives have done a substantial amount of work in this area. They have met with representatives of the Westray victims' families and other parties around Antigonish. In fact, the member for Kootenay--Columbia will be addressing this legislation and will share some of the insight he has gained.

I want to say that the Canadian Alliance supports the intent of this legislation and we look forward to working proactively to overcome any identified legal and charter concerns that may be present in the proposed legislation.

[Richard Marceau, Bloc, Charlesbourg—Jacques-Cartier, QC]

Mr. Speaker, I am pleased to initiate, on behalf of the Bloc Quebecois, the debate on Bill C-45 sponsored by the Minister of Justice and dealing with criminal liability of organizations.

Hon. members will recall that this bill was introduced at the very end of last spring's session, when the leadership crisis within the Liberal Party of Canada was at its peak.

At that time, people may have wondered just how far the government might go to get its bills through. The answer to that question provided today is pretty revealing.

It seems that the government will try anything it can to curb controversy, in order to keep a lid on the tensions within the Liberal caucus and the divisions within the government. As a result, it will opt as much as possible for passing legislative measures that will gain the support of the House and not stir up any debate.

That said, the odds are pretty good that the government leader will attempt to minimize the untenable situation his party finds itself in, and it is possible that we will not sit beyond November 7, the date of the coronation of the member for LaSalle—Émard as leader of the Liberal Party of Canada.

In the meantime, however, it is important for us to do our jobs conscientiously, because the Liberals do not seem to be on top of their game, and they have lost sight of our primary role: to legislate.

Coming back to the bill of concern to us today, I will state at the outset that the Bloc Quebecois will be supporting this amendment to the Criminal Code, and will also be in favour of its prompt passage in order to address an important ethical aspect in the role of corporations and organizations.

The objective of Bill C-45 is, in fact, to carry out an indepth review of the principles of law governing the liability of corporations and other associations of persons for all criminal offences.

It must be kept in mind that Bill C-45 is the outcome, first and foremost, of the efforts of ordinary members of this House and not an initiative by the government, which has put off taking action for a long time, too long we might say.

Before offering a historical overview, it would be worthwhile making reference to the findings of the public inquiry into the causes of the explosion that took place at the Westray mine in Nova Scotia.

This explosion, which took place several years ago, as hon. members will recall, left 26 men dead. The public inquiry revealed that the tragedy was in large part caused by the negligence of the bosses, who had turned a blind eye to some serious safety problems.

Thus, as I said, the government's inertia in enacting legislation is balanced by the tenacity of some members in trying to get substantial legislative changes passed so that such a situation cannot happen again, or, at the very least, there is a form of criminal recourse if a similar unfortunate tragedy were ever to take place.

The purpose of these private members' bills was to establish and clearly set out, under certain circumstances, the criminal liability of corporations for the errors of neglect or criminal intent committed by their directors or employees, and to create a new category of offence in the Criminal Code, with respect to companies that fail to provide a safe workplace for their employees.

Similarly, in June of 1999, a motion was brought forward to amend the Criminal Code and other federal legislation so that the directors and officers of a company would be held responsible for workplace safety.

At that time, the Bloc Quebecois supported the motion, but when Parliament was dissolved the motion was deferred. Since then, similar motions have been presented three times to the House, but the government, unfortunately, has dragged its feet until now.

Many similar bills have been introduced in recent years, and I think it is important to remind the House of the position taken in 2001 by my hon. colleague for Laurentides, with respect to Bill C-284.

In fact, the Bloc Quebecois supported passage of Bill C-284, but we also pointed out that in Quebec, an organization already exists, called the Commission de la Santé et de la Sécurité au Travail, or CSST, whose mandate is to ensure the safety of employees in the workplace.

Similarly, also in relation to that bill, we maintained that it was essential to adopt the proposal so as, legally, to establish a method of redress and to strengthen the Criminal Code, in order to prevent loss of life among workers.

The Standing Committee on Justice and Human Rights also held public hearings on this matter in the spring of 2002; it recommended and I quote:

That the Government table in the House legislation to deal with the criminal liability of corporations, officers and directors.

The government's concrete response to the Standing Committee on Justice and Human Rights and the ongoing efforts of members have resulted in Bill C-45, of which we are proud. We regret the delay, but the adoption of Bill C-45 will be our just reward.

This bill to amend the Criminal Code before the House contains eight key points that I want to list for my hon. colleagues and those interested in this matter.

The main changes pertain, first, to the use of the term “organization”, rather than “corporation”. This will broaden the definition, thereby affecting more institutions.

Second, companies can now be held criminally liable for the acts of their employees who are not necessarily in positions of authority or, as they are commonly referred to, the “higher ups”.

Third, the material aspect—the act of committing a crime—and the moral aspect—the intent to commit a crime, the mens rea —of criminal offences attributed to companies and other organizations no longer need be the work of the same person.

Fourth, the category of persons whose acts or omissions can constitute the material aspect, meaning the criminal act which can be attributed to a corporation or any other organization, is broadened to include all employees, representatives or contractors.

Fifth, with regard to crimes resulting from negligence, generally referred to as criminal negligence, the fault can now be attributed to the organization to the extent that one of the senior officers of the organization can be charged with the offence.

In the case of deliberate crimes, an organization can now be held responsible for the actions of its senior officers to the extent that a senior officer is party to the offence, directs other employees to commit an offence or, knowing that an offence will be committed by other employees, does nothing to prevent it.

It is important to clarify, nonetheless, that the acts or actions of senior officers must be committed with the specific purpose of procuring an advantage for the organization.

Similarly, the bill is designed to place the onus explicitly on anyone who undertakes to direct the work of other employees to take all reasonable steps to prevent bodily harm to these employees.

Finally, the bill also contains provisions for establishing general sentencing principles and probation conditions in respect of the organizations.

Before going any further in our deliberations on Bill C-45, it should be noted that in our justice system it is essentially jurisprudence that determines the conditions under which a company can be held responsible for a criminal offence.

In criminal offences that require culpable intent or intent to commit a crime, companies are only responsible for acts or omissions by people who may be said to constitute the directing mind of the company. In order for a company to be found guilty of an offence with culpable intent, it must be shown that the individual who materially committed the criminal act in the performance of his duties had implicitly or explicitly been given the authority to write policies for the company and to oversee their implementation.

For each situation, the court must decide whether the individual who committed the criminal act in the performance of his duties can be deemed the directing mind of the company. This is commonly referred to as the identification theory.

Ultimately, we are entitled to believe and maintain that, based on this approach, individuals who are the directing mind of the company personify the intentions of the company.

I could also enter into a technical argument justifying our support of Bill C-45, but I will settle for merely pointing out that this bill defines an organization as including a public body, body corporate, society,company, firm, partnership, tradeunion or municipality. Thus the term organization also includes any association of persons created for a common purpose, which has an operational structure and holds itself out to the public as such.

The main intent of the bill is to broaden the category of individuals whose actions and intentions may engage criminal responsibility of the organizations they represent. Therefore a differentiation will be made between two groups of individuals, namely representatives and senior officers, whose conduct may constitute a criminal offence attributable to an organization.

Thus a representative includes essentially any person who works on behalf of an organization or is affiliated with it, which generally means a director, partner, employee,member, agent or contractor of the organization. In this view, a senior officer means a representative who plays an important role in the establishment of the organization's policies or is responsible for managing an important aspect of the organization's activities.

The effect of this new designation will be to change the present state of the law by introducing new elements to the theory of identification.

It is also proposed to add sections to and expand existing sections of the Criminal Code to take into account in sentencing a reality peculiar to organizations. The same goes for the definition of specific conditions of probation applicable to organizations.

Once passed, Bill C-45 will increase from $25,000 to $100,000 the maximum fine for an organization under summary conviction or convicted of lesser offences.

There is currently no limit set on the maximum amounts of fines for criminal acts or more serious offences, a situation that the proposed legislation does not address. However, the bill specifies factors the court will have to take into account in setting the amount of fines.

For example, the courts will have to take into account aggravating factors such as the degree of planning and any financial advantage realized by the organization as a result of the offence or, conversely, mitigating factors such as efforts made by the organization to reduce risks.

Before concluding, I want to reiterate the support of the Bloc Quebecois for the principle of Bill C-45 at this stage of the legislative process. The committee stage will also provide an opportunity to consider further the proposed legislation and, above all, ensure once and for all that there are no loopholes organizations can use to abdicate their responsibilities.

I remind the House that the current state of the law forces us to establish a regime of criminal responsibility for businesses that is effective and takes into account the differences between an individual and an organization. I also look forward to hearing what my hon.colleagues have to say on this matter. I remain convinced that we will be able to pass this legislation with diligence for the benefit of our fellow citizens thanks to, among other things, the evidence we will be hearing in the Standing Committee on Justice and Human Rights.

[Inky Mark, Canadian Alliance, Dauphin—Swan River, MB]

Mr. Speaker, it has been a while since I have been in the House and I am certainly glad to be back.

I am very honoured to speak today on behalf of the Progressive Conservative Party on Bill C-45 proposed by the Minister of Justice, which is an act to amend the Criminal Code regarding the criminal liability of organizations.

Bill C-45 amends the Criminal Code to establish rules for attributing organizations with criminal liability for the acts of their representatives. It also purports to establish the legal duty of persons directing work which will ensure worker safety.

Clause 15 of the bill sets out the framework for courts to consider when sentencing organizations and also provides conditions for court imposed probations.

It is very important that those people who are giving the orders are held accountable for a lot of the things that happen in any organization. The Westray mine example demonstrates that liability should go right to the top. In fact, it should start at the top.

A number of aspects of the bill are very similar to the private member's motion tabled by the member of Parliament for Pictou—Antigonish—Guysborough. It began as Motion No. 455 and then changed to Motion No. 79 before it was passed, having received overwhelming all party support.

I realize that many of the issues of workplace safety fall under provincial jurisdiction. There are corporations in this world that hold no concern for their employees. They do not see them as people. They only look at the bottom line. I believe those days are gone. It is the responsibility of government to ensure that all people are held accountable for their actions.

The attempt of the bill, and of the PC motion which preceded it, is to remind government and parliamentarians that the House and all provincial legislatures throughout the country must do everything in their power to ensure that there is a safe workplace for those who engage in labour activity. If it costs a lot of money and input into making sure that the environment is safe, if that is necessary, it needs to be done.

We need safety in mines but also in farming, manufacturing industries and fish plants, wherever employees work. In any occupation where danger may be encountered, the workplace environment should be safe.

It is a daunting task to put into law provisions that will encourage those in the industry to abide by these legislative initiatives to ensure safety.

I am hopeful that the bill will help to ensure that those with the implicit responsibility for ensuring safety will abide, leading to a higher level of accountability among executives, CEOs and the management in companies. They need to be held accountable if they make decisions to place convenience or practicality over safety in the workplace.

The Progressive Conservative Party has concerns about the safety of employees. Too often we are accused of speaking only for the management of the corporate world, but the House can be sure that we are always concerned about how the corporate world operates and that it is responsible for its actions.

The bill will make corporations liable for permitting unsafe working conditions. For example, the maximum fine for a summary conviction offence for an organization has been raised from $25,000 to $100,000. As well, offences committed on behalf of a corporation by managers or people in positions of authority will also become offences.

Furthermore, directors and officers of corporations who participated in, knew of, or ought to have known of the act or omission that constituted the offence would be considered guilty of an offence and liable on conviction and penalty as if they personally had committed the offence. In other words, the courts shall make a determination based upon the individual's experience, duties, et cetera. No longer can those in management say that they did not know what was happening. By admission, omission is no longer a valid excuse. We are now putting in place rules and policies to make sure that the environment is safe for all people.

Although I do have some concerns regarding Bill C-45, I do commend the government for finally presenting a bill that attempts to deal with the problems in the criminal justice system and give a more clear direction to prosecution of these very often complex and cumbersome cases.

I must stress that the fundamental responsibilities for the safe operation of an underground coal mine or any industrial undertaking will rest with owners and managers.

Westray management, starting with the CEO, was required by law, along with good business practices and good conscience, to design and operate a mine safely. If this legislation had been in place, perhaps the story of Westray would have been different than it was. The significance of their failure cannot be overstated or mitigated. Others were also abdicating their responsibility, and thus the issue of shared responsibilities, which can be encompassed in both the criminal and civil context, was reflected in the recommendations from Mr. Justice Richard's report.

Business executives and corporate executives need to be accountable, and thus should be prepared to seek input from front line workers. This would allow employees to be part of management's schemes when it comes to safety. They should be relied upon to lend their knowledge and create the maintenance of a safe work environment. That is something that was also acknowledged in the report.

It is not a politically popular thing to say, but there was an element of culpability and responsibility on the workers themselves. This has to be taken into the entire context of what legislative change should occur to ensure that accountability and responsibility are held by all.

Businesses must also ensure that their employees are adequately supervised and constantly updated on safe work practices. That is a very important point. It is one thing to make the environment safe. It is another to make sure that the employees themselves are well trained, skilled, and know the safety policies that are put into place to ensure that they work safely.

It stands to reason that when weighing business goals, for example meeting production deadlines versus those of safety, shutting an operation down obviously has huge financial consequences, yet the human element should have outweighed the business demands. That is a new direction which the corporate world is following, that is, that the safety of people's lives comes first before the bottom line.

In closing I would say that business executives must promote and nurture safe work ethics and have an open and approachable attitude toward their employees. No one ever wants to feel the effect we felt in Plymouth with the Westray mine.

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, I want to say a few words on Bill C-45 today. It is an important piece of legislation regarding corporate accountability and corporate criminal liability.

The bill comes from the disaster in 1992 at Westray mine in Pictou County, Nova Scotia. I looked at the Westray story, the first volume of the Richard commission when the report was tabled back in 1997. On the front page there is a quote from a French sociologist, the inspector general of mines in France back in the 1800s. He said “The most important thing to come out of a mine is the miner”.

Over the years we have seen many tragedies around the world and in this country and many people have died because of unsafe working conditions in mines. Many times the company that owns the mine, the directors and senior management team who make the decisions are not held responsible or liable for what has happened, for the human suffering, for the people who have died and for the people who have been injured.

Regarding the bill before the House today, I want first of all to commend the families who have put a lot of pressure on the federal Parliament and other parliamentarians to make sure we have legislation that addresses the issue of corporate responsibility. I also want to publicly acknowledge the work done by the trade union movement, particularly the steelworkers, in terms of lobbying for the legislation before the House.

I also want to put on the record that two members of my caucus, the member for Halifax and the member for Churchill, both had private members' bills that were discussed in the House. They were very instrumental in promoting the idea of doing something about corporate criminal responsibility for directors and for senior management teams of companies in this country.

Finally, throughout the process, which included a private member's motion by the now leader of the Conservative Party, the justice committee tabled a report in the House of Commons. In November 2002 the government responded and on June 12, 2003 Bill C-45 was tabled in the House.

I want to go over some things which may be a bit technical but which are important in terms of analyzing the bill. I want to say at the outset that we offer support in principle, as does the steelworkers union, to the bill before the House. We will be moving amendments in committee and arguing for changes to make sure we tighten and strengthen the bill at committee stage.

At the outset Bill C-45 attempts to provide a modern sentencing regime for corporations and other organizations. By exposing the decision makers to the consequences of their actions, the legislation represents a step forward in corporate accountability. There is now a body of law that has been extensively developed to assign civil liability for various regulatory offences and torturous acts. Often these means of redress are only available to government, creditors or shareholders, but not for the average worker, the average consumer, the average Canadian. That is where I hope the legislation would be a positive thing in the years that lie ahead.

The proposed legislation brings Criminal Code provisions in line with civil law liability by making corporations, the directors and officers of those corporations, responsible for their activities and for those of the representatives of the management of the company. This translates into greater accountability because decision makers will be obliged to undertake a more rigorous supervision and control over the actions of their employees and their agents, which we hope will prevent disasters such as that which we saw in Westray in Pictou County, Nova Scotia.

These Criminal Code amendments would also create greater accountability for corporations, because judicial action against corporations is not limited to one's financial relationship with the corporation. Instead, the crown would be able to prosecute a corporation on behalf of the public for wrongful conduct which, in its absence, would be absorbed by the public market. We must look carefully into what the legislation does in order to keep the parent companies accountable. That is something new in terms of what is in the legislation.

One thing to keep in mind is that there is a fine line to be walked between accountability and the public interest. For example, sometimes it would not make sense to indict a corporate director or other people in corporate management and impose massive criminal fines if those fines meant having to wind up a company which employs 500 people to meet those liabilities.

It is important to note that in a situation where a corporation is only competitive because of its low operating costs which were achieved only at the expense of worker safety, for example, a sweatshop, it may be in the best interests of the public to completely liquidate the company.

These are decisions that have to be made by the courts. We must not be afraid to wind up a company and that is at the discretion of the judiciary, and it is our job as legislators to message such a situation to the public. It would not make sense to impose a criminal fine for a negligent act that damaged the homes of a community if those fines are not going to be used for rebuilding those homes in that community.

The legislation or the courts should understand that there are broad mitigating circumstances to be considered in sentencing. These circumstances should include things like how widely held securities are, how many employees the company has, how many people depend on the operation of the company for a job, for taxes, and how many institutions or public services the company supports.

What I mean is that we have to pick the proper forums for our legal battles. It does not make sense to assign criminal liability where civil liability offers a better solution. If someone has been harmed by the negligent actions of a corporation, I think most people would want compensation and restitution. This can only be achieved in many cases through civil litigation. In some cases the director may well have to be the person directly responsible for the conditions that led to the negligent activity. In these cases, justice in the court of public opinion would only be served by incarceration.

We must be clear that both options need to be possible in order to achieve the maximum social good. That being said, I must be clear on the fact that public opinion often has a very short memory. Justice must first and foremost be served for the family who has lost a spouse, or a family who has lost a brother or a sister and now has to figure out how to care for the children or the family without the companionship, without the support, and yes, without the salary of the mother, the father or the brother or the sister.

Bill C-45 addresses this concern by adding section 732.1 to the Criminal Code whereby a judge may order the offender to pay restitution to a person for any loss or damage suffered as a result of the offence, or the judge may order the corporation to establish policies to prevent further offences. This section has an added benefit whereby anyone who cannot afford to take civil action against a corporation could be awarded restitution through the criminal prosecution of the offender.

I would be interested to see how this section would operate and we would have to find this out at committee stage. For instance, can a victim petition the court for a restitution order during criminal proceedings or is it solely at the prosecutor's discretion? It is curious to note that the section uses the term “person” as opposed to “persons”. I hope the legislation contemplates that more than one person could be affected by an offence.

There are many questions and concerns about this legislation as well. The legislation makes corporate negligence a criminal offence. However in law, negligence has nothing to do with intent. The civil test for establishing negligence lies on the balance of probabilities, whereas the criminal test in general is beyond a reasonable doubt. Would criminal negligence have to be determined on the balance of probabilities or on the question of reasonable doubt? Again this has to be determined at committee stage.

Corporate gross negligence should usually fall under the jurisdiction of both civil and criminal courts. Determining those tests will be outlined by the court. One can only hope this legislation will establish new avenues that will allow the courts to make the best possible use of the civil and criminal systems to deliver the broadest possible form of justice to the workers of Canada.

Where do civil claims stand in line against criminal fines? If there is a civil claim and a criminal fine, where does the civil claim stand in line against the criminal fine?

For instance, would a court order take priority over the claims of unsecured creditors, such as those of employees, secured creditors such as banks, or victims? For instance, if a civil court orders a corporation to pay a million dollars to a victim for a negligent act, a criminal court has fined the company a million dollars for the same act and the corporation has only enough to meet one order, then who will the court see is going to get paid first, the victim? Or do they share the awarded fine? I would not want to see the victim's damages jeopardized by the criminal court order, especially if the order is against a faceless corporation that cannot physically enter a prison anyway.

One can hope that this law exposing corporations to criminal liability would not deflect attention from the reality of the situation. A corporation is made up of shareholders, officers, employees and the assets of that particular company. The only people it makes sense to punish are the directors and officers, because in the end they are the decision makers. However, a director can hide behind a corporate name if the court is satisfied that it does not need to pierce the corporate veil in order to assign corporate liability to the directors personally.

But the point of the legislation is accountability. It is not enough to hold an office building responsible when the managers are the people who should be responsible.

One can hope that the opportunity to assign criminal liability would not reduce the diligence of regulators and litigants in civil courts, where there is a stronger incentive to make directors personally responsible as opposed to making the corporation responsible.

The legislation should be approved in principle as a positive step forward in terms of corporate responsibility, but the key thing is that this is just one tree of a larger forest. This piece of legislation is not the be-all and end-all. It must be complemented with more practical and responsive forms of redress, be they civil, criminal or regulatory in nature. By developing a more coherent cross-discipline regime, true accountability can be attained, because what we are really dealing with is a stack of issues that make up the whole.

One should keep in mind that the point of punishment is accountability and helping out the people who have been the victims. Criminal liability does not always meet those objectives because imprisoning an officer or making a corporation pay a fine to the Crown does not do anything to ease the hardships faced by the victims. In the end it is the victims who have to be compensated. Where a wrong has been committed, it is the victims who must have the compensation. Civil court, in that case, is really the most appropriate place to get justice for victims.

Certainly the principle of the bill is a good one and it is going in a certain direction: toward improving the law of our country. At second reading we certainly support the bill before us, but I think we have to work closely with our friends in the trade union movement and with other workers to maintain the political momentum for the bill. As it stands now, the justice committee is swamped and may not even give the bill the priority it deserves. Ultimately Bill C-45 could die on the Order Paper if this session of Parliament is not a long one.

[An hon. member]

For the third time.

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

It would die on the Order Paper for the third time if that were to happen.

Bill C-45 is a step in the right direction and we should work at committee stage to achieve the amendments that would clarify some of the issues I have raised in my comments today.

For instance, the bill should include a clause stating the exact test to be used when assigning liability to a corporation, a director or an officer personally. Those are the kinds of things that have to be done. We have to clarify the role and the responsibility of the parent corporation and its criminal responsibility. If none exist, then we must be mindful that actions taken against a corporation might be successful but may not in fact hold the primary offender to task. These are the things that I believe we have to do. In the end, we have to make sure that we can hold large corporations in our country responsible in a legal way in terms of the civil courts and in terms of the criminal law for any negligence that might have caused an unsafe working place and caused injury or death on the job.

Twenty-six people were killed in May 1992 in Westray. As I said at the beginning of my comments, their families and the people of that community have worked hard to change the law. We have now come a fair way over 11 years, but this bill has died on the Order Paper a couple of times so I appeal to members of all parties in this House to make sure it is a priority.

I do not know what the Prime Minister's plans are, and the member for LaSalle--Émard may not even know what the Prime Minister's plans are, but there is a possibility that come the eleventh of November the House of Commons may adjourn, and it may not come back again until February, with a new prime minister. I hope the government House leader and the other House leaders will make sure that if this is a short session one of the bills that passes in this session will be this bill on corporate responsibility. That is the least we can do as a testimony to those who died in Westray and a testimony to those who have fought so hard to make corporations responsible for any criminality or negligence in the workplace.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to add to this debate. I believe this is important legislation that needs to be pressed forward.

In the Windsor area, and in Chatham in particular, in this last year we have seen a difficult situation. Navistar International trucks actually had a strike. They brought in strikebreakers and a company from the United States for security. Approximately two miles away from the actual site location where the strike was happening, a worker, Mr. Milner, was run over by someone from the American security company. It has certainly had a big impact on his life and his family, as well as his future in terms of earnings, and it had a big impact on our community in terms of rallying against this type of practice and also in terms of corporate responsibility.

I would like to ask my colleague, as I recognize his long-standing commitment to this issue, what other things could happen over the duration of the next few years if this dies on the Order Paper again, and if we do not take the time and seize this opportunity to put this to bed and make sure we have the protection and the rules in place to have corporate responsibility. I ask him, if that does not happen this time, what is the potential for other things out there across the country?

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, that is like asking me to look into a crystal ball. That is difficult to do, except to say that in almost any industry in this country there could be examples where people are killed because a company is not careful enough in terms of the workplace and workplace safety, and I even think of long distance truck drivers and the long hours they work. Someone has to be responsible for those long hours and make sure they have adequate rest before they take their trucks back out on the road.

There are many industries where people can be hurt or killed on the job because a company is trying to cut corners, because it is trying to improve the bottom line, because the motivation of its shareholders is to improve the bottom line. Unless we have legislation that also says when we improve the bottom line we have to do so with a safe workplace, then often it is the workplace that is sacrificed in order to make a profit or a buck. That is why this legislation is extremely important.

I gather that in the case of Westray, despite all the fanfare about this most modern mine that was supposed to work extremely well, the workers at the time were really concerned about safety in that mine. I know that some of what came forward in the Richard commission pointed out workers who were concerned about safety and concerned about the possibility of methane gas down in the mine. These are things that were raised, but the workers were ignored. That is why we need this legislation that is before the House.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I would like to pursue this further with the hon. member for Regina—Qu'Appelle, who has very accurately put forward the position of the NDP caucus, which is that we absolutely support in principle the bill before us.

But we are very concerned about the possibility, and this has certainly been the assessment of one of the most outstanding lawyers that participated in the Westray inquiry, that in fact were the legislation now before the House, unamended, in place at the time of the Westray disaster, there still would not have been the possibility of holding the correct managers and owners criminally accountable for their completely disgraceful actions.

This, as the hon. member knows, was an inquiry that was correctly entitled, I think, by Justice Peter Richard: “The Westray Story: A Predictable Path to Disaster”. What came out was, and I quote directly from that inquiry, “a story of incompetence, of mismanagement, of bureaucratic bungling, of deceit, of ruthlessness, of cover-up, of apathy, of expediency, and of cynical indifference”.

My question to the hon. member is whether he shares the unease people feel that the government has already let this matter die twice on the Order Paper and that we now have a prime minister in waiting who is a corporate clone if there ever was one. Does he share the concern that Mr. CEO, who may become the new prime minister or very likely will be the new prime minister, in fact is likely to put the corporate interests ahead of the interests of workers?

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, I certainly share that concern. That is why I think we should be trying as hard as we can to make sure this gets into the justice committee right away and goes through the House of Commons before this session ends, probably around the middle of November or the early party of November. I do not think the member for LaSalle—Émard, the former minister of finance, will have this as a very high priority on his list. If there was ever someone who is tied to corporate Canada, it is the person who used to be the minister of finance and who will be the next prime minister of this country, at least until the next election takes place. It is important that this bill goes through the House now, because I do not think we will have a friendly audience when the next prime minister takes the chair.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, welcome back. I am delighted to be standing here to give a speech on a second piece of legislation today. It shows that we have a lot of legislation to cover this fall and a lot of work to do and that a lot of important things are being done to help Canadians.

I would also like to add a special welcome to the member for Dauphin—Swan River, who is a tremendous contributor to the House and who has been away for some time. We are all very happy to see him back.

Of course I also want to, as other speakers have, pay tribute to the families and friends not only of Westray but of other organizations where accidents have deprived families of their loved ones, and to the people who have worked toward improving the legislation, such as the friends of Westray and the steelworkers and all those who have contributed to getting to this stage with Bill C-45, the Westray bill, to address corporate responsibility for workers' safety.

I also want to thank many ministers and members of Parliament who came to my riding this summer to see the various problems and issues there first-hand. I think it is very important to Yukoners that so many saw these issues. They look forward to progress on such issues as placer mining. There was a problem, but now we are making progress on it.

Talking about mining, it has been the mainstay of the Yukon for the last hundred years, and while the bill of course does not deal only with mining, mining is a very important and special type of corporate entity. Often it is based around one mineral find and one property, and then the corporation dissolves thereafter. A way is needed to ensure that the corporation maintains safety in the perhaps short time it is in existence through the life of an ore body and that individuals responsible for unsafe actions are held to account.

In response to the standing committee's report, the government stated that the principles of sentencing in the Criminal Code should provide more guidance to the courts when imposing sentences on corporations. However, the government did not indicate its support for any particular changes. Indeed, it expressed concern as to the relationship between the criminal law and regulation and whether a form of community service order could result in managers who were culpable requiring their subordinates to do the actual community service work.

I am pleased to see that in Bill C-45 the government has gone beyond these concerns and has developed very substantive provisions that should result in much more effective and indeed creative sentencing of corporations.

The bill proposes three major changes. First, section 718.21 would provide the courts with what amounts to a checklist of 10 things that should be considered in setting the level of a fine. Second, proposed section 732.1 would open the way for the courts to take a supervisory role in rehabilitating a corporation. Finally, that section also points to the possibility of shaming the corporation.

Canadian law does not provide a mechanical process whereby the punishment is predetermined. Judges have a great deal of latitude to craft the appropriate sentence. I suspect that often judges find sentencing the most difficult part of their job. The guilt of the accused is often pretty clear. Indeed, often the accused pleads guilty and the only real question is what sentence to impose.

Courts are often criticized by the media and the public for the sentences they impose, but I believe that is the inevitable result of giving them the latitude we have. Neither the reporter nor the members of the public who read or hear the media report have to fashion a sentence that reflects the six, and sometimes competing, purposes of sentencing set out in section 718.

When a court has before it an individual who has pleaded guilty to a serious offence, who has expressed remorse, who claims to be dealing with his or her alcohol problems, and who has a family to support, the decision whether to emphasize denunciation and deterrence, perhaps at the expense of assisting the offender to rehabilitate himself, must be very difficult.

The task is no less difficult when a corporation is convicted. Of course, a corporation cannot be imprisoned and so fines are virtually the exclusive way of punishing a corporation. Even that is not without difficulty, since the individuals who actually committed the unlawful act and had the necessary criminal intent will not bear the cost of the fine. It will be borne by the investors and shareholders who are quite likely totally innocent.

Moreover, the corporation may have been transformed between the time of the commission of the crime and the imposition of the sentence. All the managers and employees involved may, for example, have been fired.

There is no way to ensure a perfect result. This does not mean that we should do nothing. Parliament should at least indicate to the courts the factors that they should consider when an organization has to be sentenced. The factors found in proposed section 718.21 are intended to reflect for corporations the factors that govern sentencing of individuals. Judges probably already apply many of these factors, but providing a list should result in judges having a more complete picture of the corporation. I believe that members will agree that the factors are comprehensive and appropriate. They are as follows:

First, the economic advantage gained by committing the crime. Clearly, the more money the corporation made the higher the fine should be.

Second, the degree of planning involved. Careful planning shows a deliberate breaking of the law and should be punished more than a case where the senior officers took advantage of an unexpected opportunity to make a quick, illegal profit.

Third, the need to keep the corporation running and preserve employment. Just as individuals should not be fined so heavily that they will not be able to provide for their families, so a corporation should not normally be bankrupted by a fine so its employees are thrown out of work.

Fourth, the cost related to an investigation and prosecution. Many corporate fraud offences require lengthy investigations and the cost to the public of detecting the crime and building a case should be considered by the judge.

Fifth, any regulatory penalties imposed on the corporation for the offence. Courts consider whether individuals have been punished in other ways, for example, by losing their jobs. Similarly, a court should consider whether the public interest is served by adding a large fine to the penalties that may have been imposed on the corporation by a body such as a securities commission or any other regulatory body.

Sixth, penalties imposed on managers and employees for their role in the crime. A court should consider whether a corporation has disciplined or even fired employees who participated in the offence. Doing so sends a powerful message to other potential wrongdoers in the corporation. Individuals who plays a role in breaking the law risk ending their career even if criminal prosecution is avoided.

Seventh, noting whether there have been previous convictions or regulatory offences. Just as the criminal record of an individual is very important to determining the appropriate penalty, so it is important for a judge to consider whether the corporation and its workers had been sanctioned for similar activities in the past, not just in the criminal courts but by regulators like occupational health and safety departments.

Eighth, restitution, which has been mentioned by other speakers today. Compensating victims shows that the corporation is trying to make up for the harm that it caused.

Ninth, attempts to hide assets to avoid paying a fine. A corporation that tries to pretend it is poor, rather than being open with the court about its financial situation, is showing that it has not changed its ways.

Tenth, measures taken to reduce the likelihood of further criminal activity. New policies and practices, like spot audits or changes in personnel, could indicate that the corporation has learned its lesson.

After considering all these factors, a court should have as complete a picture of the corporation's situation as it has of an individual's circumstances when it receives a pre-sentence report. Indeed, the factors may encourage the Crown and defence counsel to give serious thought to what is an appropriate fine leading to a joint recommendation. There is nothing wrong with negotiations on the level of the fine to be paid, provided everyone has considered the appropriate factors.

Although the factors are important, a potentially more effective tool for rehabilitating the offender and protecting the public from further crimes is the possibility of putting a corporation on probation. Courts often place individual offenders on probation. The court imposes conditions that allow the offender to deal with the underlying problems like substance abuse.

Probation is virtually unheard of for corporate offenders, but there may be circumstances in which probation would be appropriate to ensure that the corporation would take steps to reduce the chances it would commit further crimes .

The bill proposes to put into the code a specific section dealing with probation orders for corporations. The list of conditions the judge can impose begins with providing restitution to the victims of the offence, to emphasize that their losses should be uppermost in the sentencing judge's mind. But it then sets out conditions that may be imposed by the court to supervise the efforts of the corporation to ensure that it does not commit crimes in the future.

A court order can order a corporation to implement policies and procedures to reduce the likelihood of further criminal activity, to communicate those policies and procedures to employees, to name a senior officer to oversee their implementation, and to report on progress.

In its response, the government expressed a concern about the potential overlap of probation under criminal law and regulation, and that is an appropriate concern. It is noteworthy that Bill C-45 would require the court to consider whether another body would be more suitable to supervise the corporation. There is no need for the court to get involved in overseeing changes in a corporation's safety practices, for example, if a territorial or provincial occupational health and safety department is already doing so. Such an agency has trained inspectors and expertise that the courts lack.

Finally, the bill would give the court the power to require the corporate offender to inform the public of the offence, the sentence imposed, and the remedial measures being undertaken by the corporation.

Cheryl Edwards in her article on Bill C-45 in the August 22 edition of Lawyers Weekly called this possibility the most interesting of the proposed creative sentencing options. She wrote:

Imagine a court directing the posting of a criminal conviction and sentence prominently on a corporate website, in a corporate annual report, or in the news media. For many organizations the resulting profound impact on public relations and public image would far outweigh any monetary penalty.

I ask members to consider how a CEO would explain to the board of directors or to the annual general meeting of the shareholders having to run full page ads in the major dailies across Canada telling everyone that the corporation was guilty of serious fraud or killing its workers through criminal negligence? Surely the very possibility would be an incentive for the corporation to review its policies and procedures now to avoid the possibility of such embarrassment in the future.

These innovative proposals should be supported by all members. Therefore, I hope for the families and friends of future workers and for the safety of Canadians that we adopt Bill C-45 as quickly as possible before the House prorogues.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I think perhaps the vacation was a bit too long.

I would like to thank the hon. member for his comments, particularly at the end of his remarks when he called upon the House to vote quickly in favour of Bill C-45, which meets a need he himself described very well.

I would like to ask him the following question: Since this bill is the result of repeated initiatives by opposition members, and since for many months, not to say years, the government appeared to be totally oblivious to the needs addressed by Bill C-45, what can explain his slow response to a need felt not only by the workers in many industries, but also by the opposition parties?

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I would like to thank the member for the question. I do not think it matters who raised this important issue. He suggests it was raised by the opposition, but I think it has considerable support by all members in the House from what I have heard so far in the debate.

It will take the support of all members in the House to have it go through expeditiously. As we know, usually when a bill is being slowed down it is quite often one of the opposition parties, even though several others may be on side. However, from what I have heard today everyone seems to be in strong support of this and we should be looking to the future to get the bill through as quickly as possible and also to consider suggested improvements that various people have put forward in the early part of this debate but to do all of that quickly so that we get the main components of the bill in place.

Everyone seems to be in favour of it because of its protection of workers and its efforts to reduce the inappropriate activity of anyone at any level in a corporation who directs people to do something that is unsafe.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I would like to pose a question to the hon. member on the government side. I appreciate the sentiment about the fact that it does not matter who finally brought the bill forward although it is exceptionally important to recognize that it has been the families of the victims of the Westray disaster as well as the steelworkers working in tandem with them and recognizing that it required parliamentary remedy that has brought us to this point.

My question concerns the member's suggestion that we should just get on with passing this bill as quickly as possible. I want to ask the member whether he has read the critique from the lawyer who represented the deceased Westray miners in the Westray inquiry and whether he recognizes him to be a considerable expert on the topic? He has acknowledged, and I want to quote directly because I do not want to misrepresent this for a moment, that it is a good thing that the government finally brought forward legislation but he goes on to say that the response of the government is by no means adequate, in fact, “if the proposed amendments were law when the Westray Mine exploded in May 1992, it is unlikely they would have made any difference to the events that followed the disaster”.

I am sure the member is aware that this is a bill that arises out of the very concern about the lack of corporate accountability in the instance of employers that knowingly endanger the life or cost the lives of their employees. Would the member not agree that for it to be passed in its current form just so the government could finally say it has finally dealt with it 11 years later would be a travesty and a tragedy given that there are amendments needed in order to make this bill effective for its stated purposes and meet the objectives which the government has said are inherent in the bill?

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I would like to thank the hon. member for her question and address a number of points. First, there should be great credit to the families and steelworkers which I stated in my opening remarks. I also pointed out that we should seriously consider the improvements to the bill that have been suggested in the early parts of this debate. I am not disagreeing with her that the committee should look at all possible amendments to the bill.

I have met with the friends of Westray over the years and provided my support for their efforts. That is very important. One of the problems in this case was that one of the Crown's major witnesses changed his testimony. Regardless of what bill is in place, I am not sure how that particular problem would be solved.

The member is correct in suggesting that the bill arose out of Westray, but it has much more far-reaching ramifications than just the Westray case. Hopefully it would solve cases similar to that with any improvements that are put in and I am anxious to look at those improvements. But the bill is far wider reaching in that it would deal with every corporation in Canada and with anyone who works for any corporation at the operational level who is directing other people to do something that may be unsafe. There are far-reaching items in the bill and many things which are innovative and that will hold to task people who direct people to do unsafe things.

I would not suggest rushing the bill through just to say that someone has done it, but I would suggest getting it through quickly so that all these excellent provisions could be put in place to protect the safety of Canadian workers.

[Jim Gouk, Canadian Alliance, Kootenay—Boundary—Okanagan, BC]

Mr. Speaker, I would like to advise that I will be splitting my time today with my colleague from the neighbouring riding of Kootenay--Columbia.

I am pleased to rise today to speak to Bill C-45 dealing with criminal liability for companies and organizations.

Over the years I have had several occasions to attend the annual day of mourning for workers who are injured or killed on the job. One of the sentiments that rings out at those meetings on those special days is that although numbers tend to be coming down for many companies, and many companies are very conscious of safety, even one death or injury is one too many. That is the premise which I believe the bill is approaching in terms of liability.

Many years ago, probably in the 19th century, companies were pretty horrendous places for anyone to have to work. The conditions were deplorable. The tactics they used were absolutely disgusting, and that was a large part of what caused workers' organizations and unions to form, because there was an incredible need for someone to stand up for workers against the very oppressive type of corporations that sometimes pervaded throughout our society.

Since that time, we have now what we refer to as the pendulum effect. Sometimes when the economy is going really strong, the unions have tremendous power to force things, maybe even beyond reason at times, on companies because there is such a need for the company to keep working, and so much profitability. At other times the pendulum swings the other way. Even now we can see the same thing returning back, where some corporations take advantage of that and use it as an opportunity to try to squeeze unions into conceding benefits for which they have fought.

One of the problems with the pendulum is we get no stability out of that. In my position as labour critic I saw a case where we have had strikes at the port of Vancouver. The government may have decided that it was appropriate to legislate people back to work because it could not take the disruption and because of what it would do to our economy. However a year ago one of the companies dealing with the grain workers had very little grain flowing into it so it was in labour negotiations with the union. The company actually locked the union out because it saved money by not bringing them in and having to cover benefits. It had alternatives. It was able to divert it to the different facilities that it had. The company did not have enough volume to keep its operation as well. Ironically, those same workers who would have complained with a different swing of the pendulum on being ordered back to work asked why the government was not doing it now. These are the kinds of shifts that we need to try to avoid.

We have the same thing in Bill C-45 in terms of liability on the part of companies. We need to address the problem of criminal liability on the part of persons within the corporation. By the same token, the bill needs to be written in such a way to ensure that we do not go to a point where there is no proper consideration for the criminal liability of people within a company, like the Westray example that has been quoted so much here today in this debate. We also need to ensure that the bill does not swing the pendulum too far and go from a point where people were not being held properly to account to a point where it is done in an oppressive manner.

There has to be an example of balance to put it in a common sort of term for the average person who is watching these proceedings today. The previous Liberal speaker quoted sections and subsections of the bill and some of the more arcane provisions in it, which is necessary. I am sure lawyers, judges and others who are watching need to know those types of details, although they have undoubtedly read the bill. However it is the general public whom we are largely here to represent, including the workers on whom this bill will have such a profound effect. We need to show them exactly what this means and why we feel we need to make these changes.

For example, I lend a car to someone. After the person borrows it, he or she goes out, gets impaired, gets into an accident that perhaps kills someone and very serious charges are pending against that person. It would be inappropriate if I were charged with the criminal responsibility for that accident as well if I had no knowledge whatsoever of what this person was going to do.

On the other hand, if the person were impaired when he borrowed my car and I knew that, then I should be held accountable for allowing him to take my car when he was in that condition.

That is the basic premise of how the bill needs to work. By all means we need to put in some kind of legislation that allows the courts to take criminal action against people who knowingly allow workers to work in conditions that are unsafe and that result in injuries or in the case of the Westray Mine many deaths. These are the types of things that need to be put in the legislation.

We believe the bill has conceptually a lot of merit. We agreed certainly in principle with the private member's bill that actually caused this bill to be written by the government. However the bill needs changes and improvements to make it truly a bill that works for all people. A bill that is imbalanced is not a good bill at all.

When it went from a private member's bill to government legislation, I think it might have lost something in the translation. That is not uncommon. That is why we have debate in the House to disclose what the issues are and to bring them forward. More important, that is why we send a bill to committee. A committee is supposedly master of its own destiny. It can examine the bill based on the debates held in the House by the various parties and from witness, many of whom have brought their opinions forward already. The committee can then decide to make changes that will make the bill, which has a lot of merit, into a bill that has more than just conceptual merit but indeed answers the concerns of workers throughout the country while at the same time ensures that it does not become oppressive against the other side.

We have to keep that pendulum in the middle. In fact we have to eliminate the pendulum and do something that is balanced and right, taking into consideration the needs and rights of both side, instead of something that takes a liability that was never addressed and takes it to a greater degree.

I am sure that members who spoke before me outlined the intricacies of the proposed legislation. I am sure my hon. colleague, who will be speaking next and who has put a great deal of time and background work into the bill, will bring forward the specifics on the kinds of things we need to fix to ensure this is a balanced bill.

[Jim Abbott, Canadian Alliance, Kootenay—Columbia, BC]

Mr. Speaker, I appreciate the opportunity to speak to Bill C-45, but I am sad that we have to have this kind of legislation under consideration by the House. I take a great deal of comfort for the Canadian Alliance and for that matter for the bill and for the House as a whole from the fact that our justice critic, the member for Provencher, as a former attorney general of Manitoba, will be able to bring a lot of light to the process.

The process is a complex one simply because one cannot hold a corporation accountable at the end of the day. The people who have to be held accountable are people as opposed to just a numbered corporation. Getting the balance between those two things and ensuring that the bill is operative and is workable is going to be exceptionally important.

One of the things that I have been particularly encouraged by has been the tone of the debate in the House on this issue. There has been a very low level of partisanship and there has been a strong desire expressed on the part of everyone that the bill be a proper working document, an agreement on the part of parliamentarians here that we bring forward legislation that can be useful.

We have to remember that the most probable cause, the foundation of Bill C-45 is the Westray disaster. There was tremendous political interference in the process around Westray, both at the federal and provincial levels. In the spirit of non-partisanship I will not offer party designations to that political interference. The reality was that there were very high levels of interference in both the Nova Scotia government and in the federal government of the day. The interference was such that I believe that some of the very irresponsible people who were involved at the corporate level and who were responsible for many of the decisions, or lack of decisions, and many of the people who were involved in the process of looking at the regulations surrounding the conditions within the mine, the bureaucrats of the day, had the assumption that there was a free track. There had been so much political interference, whether it was from people involved at the corporate level or people involved at the bureaucratic level who felt they had all sorts of latitude and elbow room, that many corners were cut.

The workplace practices that were in effect at that time were the most dangerous that could ever possibly be imagined. Unfortunately, following the disaster the hearings themselves bordered on being a farce simply because there were witnesses who should have testified but were not available because they were concerned about possible criminal sanctions being brought against them. As a result, those witnesses who were absolutely key and germane to the Westray inquiry, who should have been at the hearings and who should have been able to speak up under oath were not there.

After the inquiry closed, the decision was made that there would be no criminal charges. Of course by then, because the inquiry was concluded and we had the report, there was no way in realistic terms that those people could then testify. The decisions had already been made.

There also was a situation regarding the destruction of evidence in the mine itself. Decisions were made by people, and to this point I am really not clear, to flood the particular portions of the mine thereby removing the actual evidence of what had contributed directly to this disaster.

I had the opportunity, on behalf of my political party, to travel to Nova Scotia to take a look at this when I was formerly the solicitor general critic. I met with some very wonderful people, members of the families who were bereaved by these terrible events and by this avoidable accident.

I am sure the frustration of these families to this day is larger than we could ever possibly imagine, their frustration at the process they have been through and the very obvious fact that, most charitably, mismanagement cost the lives of their loved ones and, less charitably, to say that there was actual criminal negligence on the part of corporate officers that led to that.

Their frustration boiled over into bitterness and cynicism. I can recall one meeting in particular with the families. It was a quiet meeting. I think about 15 people were at the meeting. It was not a big town hall meeting. I was not there for any grandiose political reason. These people just wanted someone in Ottawa to listen, so I went and listened. The bitterness and the cynicism on the part of these families against the whole process was absolutely immense.

Having tried to stay non-partisan, I want to offer a criticism in the most non-partisan way that I can of the Liberal government that has been in Ottawa for 10 years. The families deserve better. This accident, as was noted by my friend from Halifax, took place 11 years ago. The events that followed were very transparent to anybody who turned on the nightly news.

We all know there was a deficiency and yet in the 10 year period that has transpired for the Liberals to be on the governing side of the House this is the very first time that we have been able to debate any action proposed by the government to overcome this problem.

That is grossly inadequate. It leads to the bitterness and the cynicism that is so easily understood on the part of these families. It leads to a cynicism of Canadians toward the entire political process.

How many times have we seen bills come before the House, be presented to the House and then die on the Order Paper when the Prime Minister calls an election and then be re-introduced and re-introduced. People want action. They do not just want words.

I give my friends in Nova Scotia this caution. What I suspect could very well happen as a result of the political opportunism that will be exhibited by the next Prime Minister of Canada, there will undoubtedly be an election called by April 4. If an election is called Parliament will be dissolved which is, by the way, totally unnecessary since there is another year and a half more that the House could be sitting without the political gyrations of the other side. As a result of the calling of that election, which I predict will be April 4, there is a high possibility that this legislation will die. I just want to give the people who are bitter and cynical about the political process a little forewarning that the legislation could very well die.

This is not good enough. Having given that criticism, and it is a very direct criticism, let me reiterate what my colleague, our justice critic, has said. We are prepared to work with the committee, to help the committee and to be part of the process so that at the end of the day we have good, logical, concise, practical, workable legislation so that the workers in the workforce of Canada will have the protection that they deserve.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I appreciate the spirit of the comments made by the previous speaker. As I have already indicated, I and my colleagues share the concern about the possibility that we will yet again see the kind of legislation that is needed to establish criminal accountability for workplace deaths and avoidable injuries simply go down the tubes.

This is the third time this type of legislation has come forward. It is true that it was previously in the form of a private members' bills by myself and by the hardworking member for Churchill who has considerable knowledge of workplace health and safety issues. We finally have an initiative from the government. It is of great concern that this could actually expire.

Would the member comment further on the possibility that we finally saw a government initiative around establishing criminal responsibility for workplace health and safety after the former finance minister, the member for LaSalle—Émard, left the cabinet and whether he shares the concern that we may actually see this legislation deep-sixed when he is once again in a central position of decision making with respect to this very important matter?

[Jim Abbott, Canadian Alliance, Kootenay—Columbia, BC]

Mr. Speaker, that is very interesting. I had not really thought about that prior to the member's question.

When I returned from the meetings with the people around Antigonish I returned with a deep sense that something had to happen on this.

The member may recall that my constituency produces 25% of the entire capacity of the world's metallurgical coal. Although it is an open pit operation, nonetheless I am very familiar with the unionized workforces and the kinds of conditions they are up against.

What was interesting was that I was approached by some people in businesses identical to Westray who were expressing a deep concern about this. In fact, I am very much aware of the pressure that there is from corporate Canada.

The fact that the member for LaSalle—Émard, a board member of many corporations, a millionaire tycoon in his own right and with many connections--

[Alexa McDonough, NDP, Halifax, NS]

Many hopeful leadership connections.

[Jim Abbott, Canadian Alliance, Kootenay—Columbia, BC]

Yes. I mean a $9 million bankroll from corporate Canada. Actually, that is really an interesting perspective. It is a concern to me. I thank the member for drawing it to my attention.

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, Bill C-45 is the culmination of many years of attempts to reform the general law of attributing criminal liability to corporations. In fact, Bill C-45 would give Canada rules that are appropriate for the complex, modern corporate world where often a company has many places of business, various subsidiaries, parts of the business contracted out to specialists, decentralized control over some parts of the business and a great deal of discretion vested in its managers.

Now, in these circumstances, it is difficult to decide whether a corporation has committed a crime both by doing something the law prohibits and by intending to break a law or having mens rea, as the criminal lawyers say.

It is not surprising that rules that were originally developed beginning in the horse-and-buggy age are often in need of updating as conditions change. It is part of the genius of the common law system that adjustments can be made by the courts as new cases come before them. The common law may not always have the logical consistency that academics want but it does get the job done.

Historically, at first the courts held that a corporation could not break the law but gradually the courts made exceptions.

The first criminal offence for which a British company was found liable was for nuisance. Something simply had to be done about locomotives setting fire to crops by their sparks. The real problem was not with a strict liability offence but with those offences where the crown had to show some form of intent.

It was not until 1915 that the House of Lords developed a so-called directing mind test for offences of intent but the test was quite narrow, concentrating on a corporation's board of directors.

Of course Canada also followed British judgments until 1949 when appeals to the judicial committee of the Privy Council were finally abolished and our Supreme Court of Canada was created.

The Alberta Court of Appeal struggled with this issue as late as 1941 in a case called Rex v. Fane Robinson Ltd. The two directing officers of a garage company, pursuant to an agreement with an insurance adjuster, added a certain sum to a repair bill on an insured automobile. On the receipt of the moneys from the insurer, part of the additional sum was given to the adjuster and the balance was retained by the garage company. There was no problem finding the individuals involved guilty but the garage company was also charged with conspiracy to defraud and obtaining money by false pretences.

The trial judge, following the narrow test developed by the Privy Council, acquitted the company. In the judgment he wrote as follows:

The accused is a corporate body incorporated under the laws of the Province of Alberta. A corporation acts through its directors. There is no evidence whatever disclosed in the minutes of the meetings of the directors or the shareholders which are in evidence, that any authority by resolution was ever given to the directors acting in their official capacity to enter into the conspiracy alleged in the first count, or to procure by false pretences the money alleged in the second count...

The Court of Appeal in a two to one decision convicted the company. Justice Ford wrote:

--I have, not without considerable hesitation, formed the opinion that the gradual process of placing those artificial entities known as corporations in the same position as a natural person as regards amenability to the criminal law has...reached that stage where it can be said that, if the act complained of can be treated as that of the company, the corporation is criminally responsible for all such acts as it is capable of committing and for which the prescribed punishment is one which it can be made to endure.

Interestingly enough the dissenting judge wrote “I am of the opinion that mens rea must be established in a case of this nature. A number of changes in regard to liability of corporations have been made from time to time by Parliament and, as has been suggested, the changes and extension of liability of corporations will probably be extended, but in my opinion the extension, if there is such to be, must come from Parliament”.

It is important to note that what was said in the dissenting opinion was that it must come from Parliament.

It has been more than 60 years since that was written and I would respectfully submit it is high time that Parliament did set the rules. The legal background, the many attempts to reform the law and the situation in other countries were thoroughly canvassed in the discussion paper the Department of Justice provided the standing committee and in the government's response to the standing committee's one page report. Clearly we are not starting from scratch and no one should be taken by surprise by the provisions of Bill C-45.

The fundamental question that we as parliamentarians must answer is whether the proposals in Bill C-45 with respect to offences requiring proof of knowledge or intent by the corporations are appropriate in today's conditions.

As members know, in the absence of action by Parliament, the Supreme Court expanded the so-called directing minds test in the Canadian Dredge and Dock case in 1985. The government in its response found the Canadian Dredge and Dock case rules too restrictive. Also the committee rejected the American vicarious liability model as contrary to fundamental principles that underlie Canadian criminal law. It also rejected the Australian corporate cultural model as being vague and also untested.

Instead, Bill C-45 proposes to broaden the persons who can be considered directing minds through the definition of “senior officer”. It sets out three ways that a senior officer can make the corporation criminally liable, but in all cases the senior officer must have the intent at least in part to benefit the corporation.

The first question we must ask ourselves is whether the definition of “senior officer” is broad enough to catch the right officers without being so broad that it unfairly stigmatizes the corporations. Members should not underestimate the consequences of the criminal conviction on the reputation of the corporation but also on the individuals employed by that corporation.

The proposed definition of “senior officer” includes everyone who has an important role in setting policy or managing an important aspect of the corporation's activities. It is significant that that person does not have to have the final say in setting policy but must have an important role. Moreover, a person who has no role in making policy can be a senior officer if he or she is entrusted with important management duties.

In the Rhône case referred to in the government's response, the Supreme Court stated the following: “The key factor which distinguishes directing minds from normal employees is a capacity to exercise decision making authority on matters of corporate policy, rather than merely to give effect to such policy on an operational basis”. Clearly, the proposal in the bill is broader.

The new definition makes it clear that the directors, the chief executive officer and the chief financial officer of a corporation are, by the virtue of the position that they hold, automatically senior officers. A corporation charged with an offence cannot argue that the individuals occupying these positions actually had no real role in setting policy or managing the corporation and so were not senior officers.

However, there is an endless list of titles: senior vice-president finance; general manager western division; corporate counsel. The same title can mean quite different things in different corporate structures. For example, the executive assistant to the president could have a great deal of authority and effectively speak for the president in one corporation and so be a senior officer, but in another corporation would have only minor administrative functions, perhaps such as scheduling the president's meetings.

Necessarily, the Criminal Code has to use general language so that the courts will have to decide in each case whether a person who is not the CEO, CFO or a director is indeed a senior officer. By requiring that person play an important role in developing policy or managing an important aspect of the business, we are indeed providing the courts with indications of the position the person must actually play in that organization.

The first two ways that a senior officer could make the organization liable set out in section 22.3 are fairly straightforward. The most obvious way for the organization to be liable is the first way set out in 22.3, which is that the senior officer actually committed the crime for the direct benefit of the corporation. For example, if the CEO cooks the books and thereby induces others to provide funds to the corporation, both the corporation and the CEO may be guilty of fraud. However, senior officers usually direct others to do such work.

The second way set out in section 22.3 makes it clear that the corporation is guilty if the senior officer has the necessary guilty intent and indeed wants to benefit the corporation, but subordinates carry out the actual physical act. An example would be where a senior officer could be benefiting the corporation by having it deal in stolen goods. The senior officer could instruct employees to buy from the supplier offering the lowest price, knowing that the person who offers to sell the goods at the lowest price can only make such an offer because the goods are stolen. Here the employees themselves have no criminal intent, but the senior officer and the corporation could be found guilty.

The bill proposes a third way of holding the corporation liable and this is something new. A corporation could be guilty of a crime if a senior officer knows employees are going to commit an offence but that senior officer does not stop them. Using the stolen goods example, a senior officer might become aware that an employee will get a kickback from the thieves for getting the corporation to buy the stolen goods. The senior officer may have done nothing to set up the transaction, but if he or she does nothing to stop it with the intent that the corporation again will obtain a benefit from the lower price, the corporation would be responsible.

Members should note that indeed in this third case, unlike the first two, the senior officer does not have to be active within the scope of her authority. In other words, if a manager of security knows that there is criminal activity going on in the sales division, for example bribing municipal officials to get a contract, she cannot decide to let it slide so that the company will benefit, even if that area of the corporation's business is not her responsibility. She must take all reasonable steps to stop the commission of the crime.

The supreme court has held in the Sansregret case, which involved a sexual assault that “Where the accused is deliberately ignorant as a result of blinding himself to reality, the law presumes knowledge”.No doubt the court will apply the same test to an organization, which will be liable if a senior officer is wilfully blind to information in order to avoid confirming what he or she suspects.

The government in its response to the standing committee report concluded that Canadian criminal law as it applies to corporations is in need of modernization. The directing mind model does not reflect the reality of corporate decision making in the delegation of operational responsibility in complex organizations.

Cumulatively, the changes to the law which are set out in Bill C-45, particularly as they affect those crimes that require knowledge or intent, represent a significant broadening of the rules for holding a corporation liable. The proposed changes should be supported by the House and I urge members to vote in favour of the bill.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I congratulate the hon. member on her speech. She truly covered all the issues addressed in the bill.

The Bloc Quebecois supports this bill, but one particular point caught my attention. I am talking about the offences known as mens rea in Latin.

I get the impression, in reading the bill in its current form, that it will be extremely difficult to make the application of the bill truly effective in real situations.

I want to ask the hon. member a question. Would it not have been better to use the New Democratic Party's hypothesis relating to Bill C-284, which was introduced during the first session of the 37th Legislature? The suggestion then was that, rather than using mens rea , which is the requirement to prove intent above and beyond that required for criminal negligence, there could be a mechanism allowing for the burden of proof to be reversed.

In other words, once it is established that the employees of an organization have committed an act or made an omission leading to the commission of a crime, that organization would have to prove that it neither authorized nor tolerated such behaviour. Would this not be more effective and ensure that the desired results of the bill would be obtained? Given the bill's current wording, it is possible that the House will be called upon to amend the proposed legislation once it has been put to the test a few times.

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, I did practise law for 18 years, and my understanding is that criminal law does require mens rea, that the intent is necessary for many of the offences under the criminal code. As I explained earlier, we proposed three ways to broaden the directing minds, which was part of the old corporate liability, by applying mens rea or intent to senior officers. We have gone through those things.

I understand that what in fact had been proposed earlier was not the criminal intent, which is really the norm for criminal acts.

There is another thing which I think it is important to say, and I said it earlier in my speech as well. We must remember that to be convicted of a criminal offence both for a corporation and an individual is a very grave offence. We have to balance the intent that it is a criminal act to ensure that in fact we are not convicting a senior officer who may just be there as a senior officer. We have to look at these things.

I also urge the member opposite to bring these issues to committee. We will have the opportunity to look at the various ways and if it is deemed more appropriate to use the method that is being proposed, that is something the committee can consider. However, it is important to remember that we are talking about the criminal law here and what threshold is required for offences.

That is my understanding of mens rea and criminal intent.