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Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs

Issue 16 - Evidence, October 30, 2003

OTTAWA, Thursday, October 30, 2003

The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill C-45, to amend the Criminal Code (criminal liability of organizations), met this day at 11:02 a.m. to give consideration to the bill.

Senator George J. Furey (Chairman) in the Chair.


The Chairman: Honourable senators, last evening we had referred to us Bill C-45, to amend the Criminal Code, criminal liability of organizations.

We had a brief discussion at yesterday's committee meeting and agreed to commence our study today rather than beginning our study of non-derogation clauses as previously planned.

To give us background on Bill C-45, we have two witnesses from the Department of Justice: Mr. Greg Yost and Mr. Donald Piragoff, who have a presentation for us.

Please proceed.

Mr. Donald Piragoff, Senior General Counsel, Criminal Law Policy Section, Department of Justice of Canada: Honourable senators, thank you for the invitation to address you today on the subject of Bill C-45.

Bill C-45 is the culmination of many years of work and will, if adopted, make significant changes in the criminal law as it affects corporations and other organizations.

Certainly, many will consider that the subject has been ripe for reform for many years. Honourable senators may be aware that the Law Reform Commission of Canada gave itself the ambitious goal in the mid-1970s of reviewing the entire criminal law and proposing a new Criminal Code in time for adoption to mark the centenary of the passage of the Criminal Code in 1992.

One of the first subjects tackled by the commission was the criminal responsibility of groups. It is an inherently difficult subject because the criminal law requires that, in order for conduct to constitute an offence, there must be both an act, the actus reus, and some level of criminal intent or mental culpability, the mens rea. Previous Parliaments chose not to codify the rules and the courts were left to develop them. The commission's goal proved unattainable. Although a draft bill to reform the general part was tabled by the government in 1993 as a white paper, the project died.

It is always difficult to make changes in the criminal law. The stakes are very high, and many will fear that the changes will expose them to the stigma of a criminal conviction for actions that were legitimate under the existing Criminal Code.

Honourable senators are well aware of the controversy that can be aroused by attempts to ``modernize'' the law. Therefore, it is noteworthy that the government's response tabled almost one year ago, and Bill C-45, which was tabled last June, have aroused very little controversy. The bill was unanimously supported in the House. In part, this is due to the significant amount of study that has occurred on this issue by academics, industry and labour stakeholders, and parliamentarians.


It has always been difficult to apply rules designed for individuals to corporations. Corporations are legal fictions that can only act through individuals. Because Parliament has been silent, the courts have had to come up with rules on a case-by-case basis governing corporate criminal liability for acts corporations are capable of committing.

According to Mr. Justice Estey in the leading case, Canadian Dredge and Dock v. The Queen:

The position of the corporation in criminal law has been under examination by courts and lawmakers for centuries. The questions which arise are manifold and complex. They are not likely to be answered in a permanent or universal sense in this appeal, or indeed by the courts acting alone.


With the adoption of Bill C-45, the courts will not be acting alone. Reform to reflect modern conditions will not depend on a case coming forward involving the current concept of the ``directing mind'' test, and be appealed to the Supreme Court so the court can revisit the case of Canadian Dredge and Dock. Instead, Parliament will have put in place rules regarding when organizations are parties to an offence.

The principal changes proposed in Bill C-45 that affect organizations are, first, the definition of ``organization.'' The definition is new and is more extensive than the current Criminal Code definition of ``person,'' as it specifically includes firms, partnerships, trade unions and associations of persons having a common purpose and an operational structure.

Second, on the subject of modernization of the concept of ``directing mind,'' Bill C-45 expands the common law concept of ``directing mind'' from the present scope of persons who have executive decision-making authority to now include persons who have an important role in the establishment of the organization's policies or who are responsible for managing an important aspect of the organization's activities.

Third, turning to codified rules for attributing liability, the proposed new sections 22.1 and 22.2 in Bill C-45 codify rules for holding organizations liable for offences of negligence and offences requiring proof of fault other than negligence.

With respect to the offences based on negligence, the new rules would allow the court to look at the acts or omissions of all of the representatives of the organization to determine whether there was negligence. However, the organization would only be criminally liable if the responsible senior officer for that aspect of the organization's activity acted in a way that departed markedly from the standard of care that could reasonably be expected in the circumstances.

For offences requiring knowledge or intent, the organization would be liable where the senior officer, with intent to benefit the organization, commits the offence, directs others to do the forbidden act, or turns a blind eye to the criminal activity of others in the organization.

Fourth, in regard to sentencing factors, the bill is innovative in proposing 10 factors to be considered by a judge when imposing sentence on an organization, including the impact of the fine on the economic viability of the organization, and the cost to public authorities of the investigation and prosecution of the offence.

Fifth, on the subject of probation orders, in theory, probation orders could be imposed on a corporation today, as it is a person, but in practice it is seldom done. The bill sets out optional probation conditions for an organization, including developing policies to reduce the chance of further crimes being committed and providing, in the manner specified by the court, information to the public regarding the conviction, the sentence imposed and the remedial actions being undertaken by the organization.

There would be an increase in summary conviction fines. The bill would raise the current fine limit from $25,000 to $100,000 for summary conviction offences. This could provide for more expeditious proceedings in situations where the only reason the Crown would choose to proceed by indictment on a hybrid offence is in hopes of obtaining a higher fine. There is, of course, no limit on the fine that can be imposed for an indictable offence.

One question that has been raised about the bill is whether it will expose directors to criminal conviction for offences committed by the organization. In fact, Bill C-45 does not address the personal liability of directors or other individuals. The existing criminal law concerning being a party to an offence, such as aiding and abetting and counselling, adequately applies to make directors, officers or even employees criminally liable for their own personal misdeeds. Bill C-45 is about establishing rules for making the organization criminally responsible for the criminal acts or negligence of its employees and its senior officers, which includes directors.

There is one part of the bill that does affect directors, other senior officers and employees who supervise other employees, and that is the new duty of care toward workers in the proposed new section 217.1. However, this is a general duty imposed on everyone who directs or has the authority to direct how others perform work. Breach of the duty at a level that shows a wanton and reckless disregard for the safety of the worker or the public, which causes death or bodily harm, could lead to a charge of criminal negligence. The person charged could be a director, a CEO, a foreman at a work site, or even an individual homeowner hiring someone to undertake repairs or work around the house in circumstances that display a wanton and reckless disregard for the safety of others.

We would be pleased to answer your questions, senators.

Senator Beaudoin: I must bring to the attention of the committee that I received a phone call from the Canadian Bar Association stating that they would like to appear before us on this bill. I do not want to delay this bill. They told me that they could appear early this afternoon, in which case we would have to obtain the permission of the Senate to hear witnesses in committee. We would be ready to do clause-by-clause study later this afternoon.

After hearing what the witnesses have said, I understand the problem. It is obvious that everything is in the definition of the word ``organization'' and the intention of the organization and the mens rea of the organization, because we are dealing with criminal law. I have no problem with that, but the fact is that we must protect the population. We must protect those working in mines, et cetera. This is fundamental.

I repeat that we do not intend to postpone clause-by-clause consideration of the bill. We ask only for one or two hours in order to be hear all views. If those witnesses can appear before this committee early this afternoon, we could finish the job at that time.

You said that this bill would entrench an offence of a special type in the statute.

The Chairman: Before you get into your question, Senator Beaudoin, may I impose upon you to wait for one second? I have a question for Mr. Piragoff and Mr. Yost.

At any point during this process, have you heard from the Canadian Bar Association?

Mr. Piragoff: We consulted with the Canadian Bar Association at the end of September or in early October.

Senator Beaudoin: What is your reaction to the thesis of Canadian Bar Association?

Mr. Piragoff: I am not aware of what is, exactly, their thesis. When we consulted with them, they had a number of questions concerning the bill. We examined their concerns. Our opinion was that the bill addressed their concerns.

As an example, one of their concerns was that the definition of ``senior officer'' was very broad. It essentially means a representative who plays an important role in the establishment of an organization's policies or is responsible for managing important aspects of the organization's activities. That is only the definition of senior officer. One must, however, look at clause 2 of the bill, the proposed subsections 22.1 and 22.2, which define liability. Section 22.1(b), on page 2 of the bill, narrows down which senior officers can be held accountable for criminal negligence. It is not just any senior officer; it is a senior officer who is responsible for the aspect of the organization's activities that is relevant to the offence.

The concern of the Canadian Bar Association was that there should be some aspect of accountability, that it should not be just any senior officer in a huge corporation.

While the definition of ``senior officer'' does not address the issue of accountability, the actual test for liability requires that the senior officer be responsible for the aspect of the organization's activities that is relevant to the particular offence.

The CBA focused on a definition but, if one reads the definition together with the actual test, we believe their concern was addressed. That is one example of where the CBA raised some questions and we believe we have answered them. The CBA has not provided us with documents, so I cannot comment on whether the CBA has more or fewer concerns.


Mr. Greg Yost, Counsel, Criminal Law Policy Section, Department of Justice of Canada: Mr. Chairman, three lawyers made a special trip to consult the Quebec Bar on Bills C-45 and C-46. We spent a whole afternoon with the Criminal Law Committee.

Based on their suggestions, drafting changes were made by the House of Commons. We put all of the definitions in section 2 so that they would apply to the entire Code. The Bar did not comment on any other changes.


Senator Beaudoin: The bar association of Quebec has been consulted. You have taken notice of this and, in your opinion, does the bill respond adequately to that?

Mr. Yost: Yes. The suggestion they made, precisely, was that it was better to put the definitions of ``representative'' and ``senior officer'' in clause 2, because it would be very useful in certain procedural sections of the code, and we made those changes at committee in the other place.

Senator Beaudoin: Speaking for myself, I am quite satisfied with that. The Barreau du Québec has not asked to appear here, so that means that they are satisfied. The Canadian Bar Association called me at the last moment. Usually we hear them, but you have already discussed with the Canadian Bar Association the question of the definition and the word ``organization,'' and your conclusion is that the bill takes care of that.

We are dealing with criminal law, and we must be precise. Doing what we have in mind here is not easy. I do not have any problem with this, provided that you are satisfied that it is clear enough and everything is identified adequately to respond to the canons, if I can use that term, of the criminal law. I understand that you are satisfied.

Mr. Piragoff: I will address that directly. The policy of the bill is to expand the net of criminal liability. That is a clear statement of the government.

This is not a criticism, but a statement of fact: The Canadian Bar Association, which does represent the defence bar, would be concerned about any provision which would extend the scope of criminal liability. However, a policy decision, which the government has put before Parliament, is that the scope of criminal liability should be expanded to ensure that the Canadian law of this century reflects the modern economic structure of Canada and modern corporations, which are multinational and which extend across the country.

Head offices may exist in Toronto, but plants may exist in Nova Scotia, British Columbia or up North. Decisions that affect the environment or the safety of workers in Nova Scotia, British Columbia or up North are made at the site, not necessarily in the corporate boardrooms in Toronto. That is not to say that decisions in Toronto do not affect the safety or the environment of what happens in those plants, but modern corporations are structured differently than they were 100 years ago when the owners of the corporation and all the employees lived in the same town.

This reflects a change to modernize the criminal law. That includes the recognition that there are organizations in Canadian society that play a significant role, but which may not be corporations. Organization such as trade unions and other associations have significant political, economic or social roles in society and are capable of acting, as an association, as if they were a person or an organization. They can affect the Canadian body politic or the economic structure of this country.

This is the nub of your question, senator. Has the government expanded criminal liability in a way that is balanced and protects the civil liberties? It is the opinion of the government that, in expanding the net of criminal liability, the government has been careful to try to ensure that the definitions are precise and that the requisites of criminal liability — as you mentioned, the mens rea, the mental element — are properly defined and set out in this bill. In fact, this bill is more defined and clearer than the common law. If you were to ask common law lawyers what were the principles of liability, it would be very difficult to get a consensus.

This is an opportunity for Parliament to be clear and precise, and we believe that the bill is clear and precise. Of course there will always be disagreements, and that is what lawyers are paid for, and we have judges to resolve disagreements.

Senator Beaudoin: In other words, before today, it was left to the tribunals. Now, at least we have something in the statute.

Senator Baker: This is a very difficult question. As an MP for 29 years, I saw changes to the Criminal Code and I watched the cases that interpreted those changes. I have always been concerned about the area of the liability of those who are considered to be in positions of authority, or the directing minds, as you mentioned. Of course, the wording of the statute is all-important. What are the words here that you say give some specificity to the definition of ``knowingly'' or some approximation of some words that would illustrate that someone was aware of what had transpired and thereby be liable? I looked for those words in the proposed new section 22.1 and could not find the exact them.

Mr. Piragoff: First, in clause 1(2), there is an extensive definition of ``senior officer.'' I will not read it. It expands the concept of ``directing mind'' to include not only senior officers who are responsible for the development of policy, which is the current case law, but also those who are responsible for an important aspect of the organization's activities, for example, the plant manager or the mine manager.

Senator Baker: The mens rea is my concern. Would you deal with that aspect of it in this bill?

Mr. Piragoff: With respect to the mental element of these senior officers, the proposed section 22.1 concerns criminal negligence. Subclause (b), lines 20 to about 30 of the bill in English and 21 to 28 in the French text, is a requirement on the senior officer who is responsible for the aspect of the organizations' activities relevant to the offence. It is not any senior officer, but senior officers who were responsible for a particular aspect of production, for example.

Senator Baker: It could be the foreman, who may not be a senior officer. Is that a fair illustration?

Mr. Piragoff: It depends on the corporation whether the foreman would be delegated authority.

Senator Baker: Let us continue to find out what that person knew.

Mr. Piragoff: Let's make something clear. It would be a manager, a person with a clear management position who departs markedly from the standard of care that, in the circumstances, could reasonably be expected to prevent a representative, that is an employee, for example, of the organization from being a party to the offence. The mental element of the senior officer has to be that of criminal negligence. ``Marked departure from the standard of care'' is the standard that the courts have used to describe criminal negligence.

The proposed new section 22.2 in the bill deals with full mens rea offences, such as fraud, where one must intend to do something, as opposed to acting with negligence. It states in part:

(b): having the mental state required to be a party to the offence...

You would go to the actual mental element of the offence. What is the mental element of fraud? It is dishonesty. It is acting without colour of right. The senior officer would have to have that mental element.

Subclause (c) states:

(c) knowing that a representative of the organization is...a party...

There must be knowledge on the part of the corporation's management that the parties are party to an offence, and the senior officer does not take all reasonable measures to stop the employee from being a party to the offence.

Those are the mental elements required. There must be knowledge on the part of the senior officer as to what the employees are doing, or the senior officer, him or herself, must intend that the corporation commit an offence.

For offences of negligence, the senior officer, him or herself, has to have the level of negligence that constitutes a marked departure from the standard of care.

Senator Baker: The keywords are, of course, ``could reasonably be expected.''

Mr. Piragoff: That is the common-law test that the courts have enunciated for the definition of ``criminal negligence.''

Senator Baker: The courts have recently ruled, particularly the Quebec Court of Appeal, that ``ought to have known'' cannot be used. In fraud, for example, ``ought to have known,'' as a director of a corporation, just does not apply.

Mr. Piragoff: That is correct, senator. The concept of ``ought to have known'' is not an appropriate mental element for an offence requiring full mens rea that the proposed new section 22.2 addresses. That is why the proposed paragraph (c) says ``knowing'' and paragraph (b) says ``having the mental state required to be a party to the offence and acting within the scope of their authority directs the work...'' Having the knowledge, having the mental element, you direct the work of others to commit a crime.

Honourable senators, the courts have declared that ``ought to have known'' is the appropriate test for criminal negligence. The gist of criminal negligence is that you ought to have done something. You ought to have been more careful. You ought to have known that there was a danger and you ought to have taken remedial steps to correct the danger.

The courts in saying that ``ought to have known'' is not a proper concept for the criminal law, were talking about full mens rea offences, not offences of negligence.

The bill has split, in the proposed new sections 22, those two concepts. Section 22.1 will deal with a test concerning negligence, and section 22.2 will deal with full mens rea offences. If you examine it carefully, senators, you will see that it preserves the full mens rea test — knowledge or intent.

Senator Baker: You refer to tribunals of inquiry. Of course, a person cannot be held criminally liable for something said during an investigation by a commission of inquiry appointed by, say, a provincial government. A person could not be held criminally liable for evidence given at such an inquiry. Will that situation change?

Mr. Piragoff: No, that is not affected. This bill does not address the rules of evidence. There is no change with respect to the interrelationship between provincial law and federal law in the Canada Evidence Act.

Senator Baker: This is a huge step and a major change in the Criminal Code. Of course, you have the experience of how the courts have dealt with section 380 of the code as it relates to responsibility on the part of owners, on the executive officers of corporations and companies. The mens rea of fraud, as you deal with the proposed section 22.2 is a huge area that is constantly evolving. It is not just a simple matter, as you suggested a moment ago, of establishing that somebody knew something was about to happen. The intent must be present. Then the courts have further broken down the issue into other fraudulent means.

By way of illustration, if something such as this is put into law, I do not see the specificity that you see. You use general terms like ``could reasonably be expected.'' Those are the key words. You can talk about 22.1(a) and 22.2 (a), (b) and (c) and the definitions, but it boils down to ``could reasonably have been expected to have known and thereby to prevent.''

You have obviously consulted all of the people you normally consult when you make amendments to the Criminal Code. You have consulted the Canadian Bar Association and other organizations representing criminal lawyers. Can you assure the committee that you have not received major objections to any portions of this bill?

Mr. Piragoff: Over 30 witnesses appeared before the committee in the other place about a year and a half ago. The committee then prepared its report. After the bill was tabled, we consulted with a number of stakeholders. Mr. Yost spoke at a number of conferences in Toronto with representatives of industry and various organizations. They indicated support for the bill.

We spoke to the barreau and the Canadian Bar Association. Their concerns were not of the nature that they were against the bill. No one has spoken out against the bill. Everyone had questions about how the bill would be applied and how it would be interpreted, just as honourable senators have asked questions. We have responded to those questions. Whether or not we have answered those questions fully, I cannot tell. I can only indicate that, with respect to many of the individuals we consulted, once we indicated our view of how the bill would work, they appeared to be satisfied.

With respect to characterizing the bill as making a major change to the Criminal Code, it is a major change because we are codifying common-law rules that existed. We have extended some of those common-law rules. Many of the concerns that have been expressed around the table are not necessarily concerns about the existing rules concerning corporate liability; they have to do with the existing offences of fraud, for example, and how the courts have interpreted other offences. That is a different issue. If the courts have interpreted the defence of fraud widely or narrowly, that is a different issue from how a corporation is held liable for fraud or theft, or for failing to meet safety standards, or for polluting a river contrary to the Canadian Environmental Protection Act.

We must separate the offences that a corporation can commit, like individuals, from the issue of how one holds someone liable for those offences.

Senator Buchanan: I am confused by all of this. You have told us that the CBA consulted with the Department of Justice. They had no concerns about the overall bill and supported it. However, they had concerns about the terminology, specifically, ``organization'' and the definition of ``senior officer.'' As I understand it, they were satisfied that the amendments in the proposed sections 22.1 and 22.2 straightened out their concerns about ``senior officer'' and the responsibility.

In proposed subsection 22.2 (c), the definition of mens rea is specific, ``knowing that a or is about to be a party to the offence.'' I do not understand, after all of that consultation and after over a year has gone by, why the CBA wants us to delay any longer.

Senator Andreychuk: We do not know that they want to do that.

Senator Cools: We do not know that.

Senator Buchanan: The question, then, is this: Why did they not appear before the House of Commons committee? They had every opportunity to be there. They did not.

Senator Andreychuk: We do not know.

Senator Buchanan: I will ask the witnesses. They did not appear before the House of Commons committee, did they?

Senator Beaudoin: No, they did not.

Senator Andreychuk: This witness cannot speak for them.

Senator Buchanan: That is not the point. The point is they had every opportunity to appear. There was full consultation with the Department of Justice. The people here say that, as far as they are concerned, the CBA are satisfied with the amendments and the Barreau du Quebec is satisfied.

Mr. Yost: I apologize, senator. Once again, we met with the Quebec bar. We made the changes they suggested. We assume that they are satisfied. We have heard nothing from them since.

Senator Buchanan: Concerning the CBA and the concerns they had, there were amendments to the bill in the other place and they appear to be satisfied.

As far as I am concerned, I think we should proceed.

Senator Andreychuk: I want to return to a couple of points. This bill is significant. Coming from an opposition with few numbers, we deal with bills as they are introduced. Some languish for quite some time before they are referred to committee, despite their relevance. I have yet to figure out how the government of the day handles its workload. It is baffling to me at best. If I were cynical, I would take another view of it, but I will not do that.

I want to be sure that all this bill does is deal with the liability and culpability of organizations. I want to be sure that this bill does not extend to the personal culpability of individuals. That is already covered in the Criminal Code.

Senator Buchanan: It is in the code now.

Senator Andreychuk: Are you certain that this bill does not, as an unintended consequence, indirectly or directly, get at individuals? Companies are often under pressure or stress for legitimate reasons, and they ask a member of their staff to accept an additional management duty at the eleventh hour. It is one thing to say that you will attract liability and culpability for the organization, but is there an assurance that we do not attract any further liability or culpability for individuals? If we intend to do that, we should do it directly.

Mr. Piragoff: The bill does not address the issue of personal liability of directors, managers, foremen or employees. The existing criminal law applies. It was the view of the government that the existing criminal law was adequate.

Bill C-45 addresses the issue of how the corporation, the fictitious entity, is held liable, itself, for the criminal acts of — and I repeat, for the criminal acts of — directors, managers, employees. It does not change the personal liability or the tests of personal liability for individuals.

Senator Andreychuk: Does it in any way change the protections afforded to individuals who may give evidence in other fora? It does not in process, substance or procedure, in any way change the existing law.

Mr. Piragoff: It does not change the rules of procedure or the rules of evidence.

The one exception — and it is not really an exception, it is a qualifier which I made in my opening statements — is that the bill does codify an existing common law duty, the duty of care, that we all owe to one another to ensure that we conduct ourselves in a manner which does not cause danger to our neighbour. It codifies an existing common law duty that applies to everyone, whether it be a director, a manager, a foreman or even ourselves, as private individuals contracting someone to make repairs on our home.

Senator Andreychuk: Would you, for the record, refer to that?

Mr. Piragoff: That is at clause 3 of the bill, the proposed section 217.1, which would provide that:

Every one who undertakes, or has the authority, to direct how another person does work or performs a task is under a legal duty to take reasonable steps to prevent bodily harm to that person, or any other person, arising from that work or task.

That is a codification of an existing common law duty that we all owe to one another.

Senator Andreychuk: Our intentions are pure when we codify existing legislation, but sometimes the words will be interpreted differently in court later. If there is any risk to individuals of corporations or otherwise, they will now be covered in the proposed section 217.1.

Are you saying that, although I have nothing to do a corporation, my duties will be codified under section 217? Therefore, implicitly, it will have ramifications for all Canadians.

Mr. Piragoff: Section 217 will not change the existing law. The duties exist. Section 217 will make it clear in statute what is there in the common law. It brings to the public attention the fact that there is a duty. Otherwise, it is a statement by Parliament of a duty. As opposed to simply leaving it to the courts to announce the duty, Parliament is taking the decision to actually state to the Canadian public: You have a duty of care to your neighbour.

The Chairman: Senator Joyal has indicated he wants to raise a point of order.

Senator Joyal: I apologize to Senator Andreychuk. As my mother would say: Write down what you have in mind so you do not lose it.

I apologize to my colleagues, to the witnesses and to the members of the steelworkers association who are in the room this morning. I have been in regular attendance at this committee for the past six years. Today, exceptionally, I cannot take part in this deliberation on this substantial and strategic bill, which is so important for the future of the people of the Westray region. I am caught because I have been ordered by another committee to be at another place at the same time. Unfortunately, I do not have the gift of ubiquity, and the study of this bill, which amends the Criminal Code, is where I think I can make a modest contribution, considering my professional background. However, I am prevented from doing that today. I would our chair to note that in the report on this bill, if the decision is made to do that later this morning.

With that, I will excuse myself to the people of the Westray region, to the witnesses to whom I pay great attention, and to my colleagues around the table.

Senator Andreychuk: I can certainly associate myself with the comments of Senator Joyal because he and I were caught in the same position.

I chose to come here because this was the legitimate time slot for this committee. Therefore, it is my first duty to the Senate, which has ordered me to be part of this committee, to be here when this committee is sitting. The other committee was sitting out of its allotted time slot, with the express negative vote of the opposition and with the whip denying the right to sit; yet the chair proceeded to sit. I raised my objections there and came here.

However, we are limited in the time that we have to study the bill. We may not be able to do that as adequately as we should. That is a disservice to the Senate.

If this situation is touched on in our report, the point should be forcefully made. Senator Beaudoin and I should be on the record as having made the choice to attend this committee. Senator Joyal made his choice. This is certainly a low point in the way the Senate is conducting its business.

Senator Beaudoin: In my case, since I am the deputy chair of this committee, I give precedence to the Legal Committee.

The Chairman: Your point is noted, Senator Andreychuk.

Senator Andreychuk: This is an important point. Mr. Piragoff, you and I have had these kinds of discussions before. There are many fine minds in the Department of Justice when it comes to codifying common law. However, courts will determine whether this is a full and complete codification of the common law, or an extension of the common law, or they will agree with you.

Will you concede that much?

Mr. Piragoff: I cannot speak on behalf of the courts. The courts are the independent third branch of government. The independence of their role is so that they may interpret the intent of Parliament.

Senator Andreychuk: Had clause 3 not been in the bill, we still could have done everything respecting organizations that we intended to do and they would have been bound by the same test of duty as that which applies to individuals. We would go back to the common law to determine duty of care; is that correct?

Mr. Piragoff: Yes. If the proposed section 217.1 were not in the bill, one would have to search through the common law to determine what duty of care was breached that founds the essence of the charge of criminal negligence.

One of the concerns that the government addressed was the issue of public safety arising primarily out of the tragedy of the Westray mine disaster, where the commission report indicated that there was a lack of care by senior management. Clause 3 dealing with the proposed section 217.1 is a statement to the Canadian public that, even though it is in the common law, Parliament wishes to make a statement to Canadians that they owe a duty of care to their fellow neighbour, especially workers.

Senator Andreychuk: When Bill C-45 passes, and should it pass in this form, the publicity and the press will be around the Westray situation and the corporation issue. How will the government bring to the attention of individuals coast to coast that this is now the definition by which they will be bound? That is an overwhelming concern for me. It is noble to get at organizations, and it is long overdue, but if we are codifying something that has to do with Westray, although it affects all Canadians, embedding it in an organization bill is not, in my opinion, the kind of public policy procedure that one would hope for. That is a personal opinion.

Mr. Piragoff: The bill may be a bill concerning the liability of corporations, but the bill makes amendments to the Criminal Code, which is a statute of public law, of general public application to the conduct of all Canadians. It will become part of the Criminal Code.

Senator Andreychuk raised a good point about the issue of the awareness of the public. One of the things that the Minister of Justice did, because of the concerns that you expressed, was to publish a plain language guide concerning Bill C-45, which has been posted on the public Web site of the Department of Justice. In plain language, it explains Bill C-45. It explains the duty of care and how individual Canadians who belong to organizations and associations have to be responsible Canadians and have to be responsible to their fellow Canadians. A plain language guide is available. This is not something that is generally done with regard to amendments. The minister, because of the concerns you raise, senator, took the step of asking the department to issue a plain language guide. If you do not have copies, we could provide copies to honourable senators.

Senator Andreychuk: That would be helpful. I recognize that some people consult Web sites to find out what is happening. The legal point is that publication is knowledge dissemination. However, I think we know that the best way to inform the public is through advertising. When people pick up their newspapers, they will know that changes have been made. I suggest that, with any announcement about this bill, the focus will be on organizations like Westray. It would be appropriate at some other time to do something with colleagues, with lawyers, with prosecutors, with organizations, perhaps even the newspapers, to demonstrate that there has been a fundamental shift from common law to a codification of the duty of care. It would be a service to the public to separate those two issues.

The proposed section 22.2(b) reads, ``having the mental state required...`` This refers to the mens rea. Have the words ``mental state required'' been used before in that form in the Criminal Code? It is a term that has ordinary meaning in other places, to mean something different from mental capacity to commit a crime. Why are you using the phrase, ``mental state required''? What do you mean by it? Is there an interpretation elsewhere or is it left to the courts to interpret?

Mr. Piragoff: This is a new term. It is a term that I suppose is the English equivalent of the Latin words ``mens rea.'' We are trying to create a Criminal Code that speaks in plain language and to not use Latin phrases such as ``mens rea.'' Essentially, it means having the mens rea required to be a party to the offence. What is the mental state or the mens rea required to be a party? One must go to each particular offence. For some offences it would be knowledge; for some offences it would be intent; for some offences it would be a specific purpose.

This provision says that the senior officer must have the mental state required, as defined by a particular offence, in order to make the corporation liable for his or her own conduct.

Senator Andreychuk: You picked up on the point I am making. In the Criminal Code, the term used is, ``mens rea.'' You are now saying that we are introducing common language. There may be laudable reasons for doing so. You are using the words, ``mental state required.'' Therefore would it be subject to the courts to determine whether those words have exactly the same meaning as all of our case law has on mens rea.

Mr. Piragoff: The problem is that there are so many different mental states in the Criminal Code. Intent is one, knowledge is one, dishonesty is one, other fraudulent means is, as has been noted, another mental state that exists in the Criminal Code. Wilfully is another one that is used. There are many different types of mental states. It would be impossible to list them all, so the drafters tried to encapsulate the Latin phrase mens rea into an English phrase, which is ``mental state required'' for an offence.

Senator Andreychuk: Nowhere does it say that all of the previous uses of mens rea, knowingly, wilfully, et cetera, will now be incorporated in the term, ``mental state.''

Mr. Piragoff: No, the statute does not say it, but the courts have talked about mens rea, the mental state required for an offence, the mental culpability. This is language that the Supreme Court has used. They have used the words ``mental state,'' and ``mental culpability,'' for example. It is a concept that is clear in the case law.

Senator Moore: With respect to Senator Andreychuk's comments about public awareness, it is worth repeating that Mr. Yost, in his earlier remarks, made it clear that the department did consult with many stakeholders and that he indeed spoke with them.

I would also repeat Mr. Piragoff's comment that the minister has published — and I mentioned this in the chamber yesterday — a plain language guide to Bill C-45 in both official languages in written form, and it is on the department's Web site. I would suggest that, when the department does a communications piece, the guide be mentioned so that the public is aware that there is a plain language document available to them that demonstrates how the bill will impact upon everyone in our community.

Mr. Piragoff: Both Senator Andreychuk and Senator Moore have raised a good point, which we will bear in mind in regard to any future communication materials that are distributed by the government concerning this issue. The senators have raised a good point and we will take that into consideration.

Senator Beaudoin: I want to check one point. Mental state is, in French is ``état d'esprit requis.'' I am concerned about the Canadian Charter of Rights and Freedoms and the presumption of innocence. When dealing with criminal law, we border on the rights included in the Charter of Rights, and we must be certain that nothing takes away from the presumption of innocence. You are telling us that it is a new expression. Has it never been interpreted by the courts?

Mr. Piragoff: The phrase, as far as I am aware, is not in the Criminal Code itself, but it is a concept, a phrase, which the courts, including the Supreme Court, have used. You mentioned the Charter. The courts have said that a constitutional element of an offence is the mental culpability, mental state, that for a full mens rea crime there must be some mental state or mental culpability. Senator Baker has rightly said that the courts have said that for those types of offences ``ought to know'' is not a proper mental state for a full mens rea offence.

Senator Beaudoin: What about the interpretation in French, ``état d'esprit''?


Mr. Yost: I was the Director of Legal Translation in Manitoba for five years. It is already in the criminal law, as interpreted by the courts and it means exactly the same thing.

Senator Beaudoin: It has been interpreted by the courts?

Mr. Yost: The courts often say that in order to establish that a person intended to do something, the state of mind must be established. We used to sometimes say mens rea, but now we refer to state of mind, mental culpability. There are half a dozen phrases in English and French to describe that state, but state of mind is quite clear, in my view, and is all-encompassing.

Senator Beaudoin: Did you say that the Quebec Bar had no objection?

Mr. Yost: We had a very interesting discussion that afternoon on Bill C-45 and Bill C-46. Professor Boisvert, from the University of Montreal, was a member of the committee and had made a presentation to the committee of the Other Place. We discussed a few terms here and there, for example, the meaning of ``important aspect''. That will obviously be decided in a specific case, in light of the importance, the significance. However, the only suggestion they had for the bill was to make the change we made at the other committee by putting all of the definitions in section 2 and using them throughout the Code. We did that and have not heard anything else from them since our meeting.


Senator Baker: The expression ``mental state'' is used in defining whether something is a general intent offence or a specific intent offence. Would this be a specific intent offence or a general intent offence?

I ask simply because, for example, drunkenness is a defence in specific intent offences but not in general intent offences.

Mr. Piragoff: The proposed sections 22.1 and 22.2 are not offences. They are a test to determine how a corporation commits an offence. If the offence requires a specific intent, such as fraud or theft, then 22.2 would require that the senior officer have the specific intent to commit theft or have the specific intent to commit fraud. These provisions do not create new offences; they are simply tests to determine how a corporation is considered to be liable. You look at the individual, you look at the culpability of the individuals, the employees, the senior officials, and your findings determine how you put the two together. A corporation has no arms, has no legs and must to act through individuals. Some are employees; and some are senior officials. This provision is the test to determine if they can be put together, and all these arms of a corporation are actually treated as being the corporation. It is a test, not an offence.

Senator Baker: In certain instances, if the corporation is liable, then the directors are liable in certain instances.

Mr. Piragoff: No, it depends on the facts.

Senator Baker: I am not making a general statement, I just said ``in certain instances.''

Mr. Piragoff: Yes.

Senator Andreychuk: I want to go back to the term, ``senior officer.'' You have defined it as meaning a representative who plays an important role in the establishment of an organization's policies or is responsible for managing an important aspect of the organization's activities, and in the case of a body corporate, it includes a director, its chief executive officer and its chief financial officer.

To me it is not clear what you mean when you say that a ``senior officer'' means a representative who plays an important role in the establishment of an organization's policies.

Words mean exactly what I intend them to mean, nothing less and nothing more. I know directors who tell us they were singly responsible for the direction of the company until they find it a little bit hot to be sitting in that position and then they say, ``Well, I played a minor role.'' The word ``played,'' rather than a more specific word is almost a term of art, which can be subject to interesting and intriguing interpretations.

Mr. Piragoff: I agree, senator, that everyone thinks they play an important role.

Senator Andreychuk: Or not, depending on the advantage.

Mr. Piragoff: The point is that one must combine the definition with the tests in 22.1 and 22.2. Although the definition in clause 1 talks about ``plays an important role,'' when one looks at the actual tests, then there are certain qualifiers. The senior officers must be acting within the scope of authority. In other words, they were responsible. It is not the person who is responsible in shipping and receiving who can hold the corporation accountable for something that has happened on the manufacturing side. If the crime occurs on the marketing side, say there was a false prospectus or false marketing, the person responsible must be a senior official responsible for marketing, not a senior official who is responsible for plant security, for example.

Even though the definition of ``senior officer,'' up front, is broad, when you get into the actual test, it is narrowed down to the person accountable for that aspect of the corporation's activities responsible for the offence. It is a factual determination.

Companies structure themselves differently. If someone calls himself or herself the executive assistant to the president, what does that mean? Does it mean the person is the secretary to the president or someone to whom the president has delegated a significant amount of authority? You must look at the facts of the corporation and not simply at the outside format and name.

What these tests try to do is say: Here are the tests, apply them to the facts and the court will make a decision based on the facts applying the law.

Senator Andreychuk: I would draw your attention to subclause 1(2) where you see the definition of ``senior officer'' and it includes the words, ``...or responsible for managing...'' Then it deals with the management structures. The first definition refers to, ``...a representative who plays an important role in the establishment of an organization's policies...'' There is great room for manoeuvring when it comes to what that means. However, we do have case law and past practice, although there may still be difficulties in determining who is responsible for managing an important aspect of the organization's activities. You are asking the court to determine the much more fuzzy area of who establishes policies.

If a board makes the final determination on policy, you should have said that, but the bill refers to a representative who plays an important role in the establishment of an organization's policies. I see this as a nightmare to administer for police, and as a field day for lawyers to defend. I know who makes policy, but who plays a role in the establishment of the policy, may be subject to interpretation. It may not be the courts. I see that as being problematic in the future.

Mr. Piragoff: It will be up to the courts to interpret. It is clearly a decision of the government to say that only policy being made by the board of directors does not represent modern Canadian corporations. Many decisions are delegated down to the operational level.

When a plant discharges effluent into a river, it is not the board of directors in Toronto who are making that decision, it is the mine or factory managers on site who are making decisions and who decide that, in order maintain productivity, they will take short cuts. That will be the policy of how this plant is operating. The bill is trying to reflect the modern structure of Canadian economic society.

Senator Andreychuk: Would lawyers who give advice upon which someone in the organization acts be held culpable?

Mr. Piragoff: I do not see how they would be senior officers of the corporation. The lawyers would be outside. Even if they were in-house counsel, the question comes down to whether they fit the first definition of senior officer. One still must meet the actual tests in 22.1 and 22.2.

Senator Andreychuk: They could be, if they met the test in 22?

Mr. Piragoff: It depends on the facts.

Senator Moore: If they gave advice that was contrary to a law, they would be no different from anyone else.

Mr. Piragoff: Lawyers can connive and conspire with their clients to commit criminal offences; it is not unbeknownst.

Senator Andreychuk: I do not mean this to be jocular, because lawyers, in-house and otherwise, give counsel and advice, that is, suggesting alternatives and pointing out the consequences. When they give advice, they are supposed to give full advice. Again, in my opinion, that is a difficult area. That is just one example of why I think the definitions will be quite interesting in the future, if we are sincere, and I hope we are, about eradicating the circumstances that led to Westray. It will not be easy.

The Chairman: Thank you Mr. Piragoff and Mr. Yost for your most helpful presentation and insightful comments this morning.

Honourable senators, there was some issue about the CBA, but after having heard the evidence of Mr. Piragoff, I am satisfied to move to clause-by-clause consideration. Is that the wish of the committee?

Senator Beaudoin: Usually, before we proceed to clause-by-clause consideration, we are given written notice. I am not certain that we received such notice. We did, however, receive verbal notice. I will not press that point. Having regard to the explanation and having regard to the attitude of the Barreau du Québec, I would be ready to go to clause- by-clause consideration.

The Chairman: In case there is some technical problem, as Senator Beaudoin has alluded to, may I have the unanimous consent of the committee to proceed to clause-by-clause consideration now?

Senator Andreychuk: If there is not a rule that specifies that we must include clause-by-clause consideration in our notice, then perhaps you could speak with some other chair this morning who may indicate that, once that notice is included, the committee can proceed. After all, we are the Standing Senate Committee on Legal and Constitutional Affairs.

The Chairman: The clerk is telling me she has checked and it is not a requirement; it is preferable, but not required.

Senator Andreychuk: Other clerks are saying other things.

We are the Legal and Constitutional Committee, so I hope that we will follow the rules.

I am more concerned that we have an important bill, such as this, and we are dealing with it in a rushed and hasty matter. We should have had the opportunity to study it and to follow our rules.

We usually hear witnesses and have an opportunity to read their testimony, deliberate, and deal with the clause-by- clause consideration later.

We were given undertakings by the government that they would not put us in this position, yet, here we are again. I am having to weigh the Westray situation against the wishes of all the people who have been waiting for this legislation. Do I tell them that we must do our due diligence, or do I agree that, out of fairness, we should deal with this today? In that case, all the fine things we say about how we give sober second thought and follow procedure and rules as a necessary component of Parliament are flushed away.

In weighing all of that, I have come to the conclusion that we can proceed to clause-by-clause study and wipe out all the rules, but I do not think it is very helpful to the Senate.

Senator Baker: I, too, would like to go immediately to clause-by-clause consideration. However, the statements of Senators Beaudoin and Andreychuk are well taken, since the courts, even the Supreme Court of Canada, have chastised this committee in the past, on the record, for not dealing adequately with proposed legislation. They have chastised to an even greater extent the House of Commons committee for not dealing with these bills properly. Just last year, the Supreme Court of Canada chastised us for not examining changes to the Criminal Code in more detail.

However, given the circumstances and Senator Moore's rather active encouragement, I agree that we should pass this forthwith.

Senator Moore: I do not want the impression to be left on the public record that this is a rush job. I will repeat what I said yesterday in the chamber. I said:

The question of corporate criminal liability has been under study in Canada for more than 25 years, beginning with a discussion paper by the Law Reform Commission of Canada in 1976, followed by a report of the commission in 1987, a study by a subcommittee of the House of Commons Standing Committee on Justice and the Solicitor General in 1993, and a white paper issued by the Department of Justice in 1993.

In this Parliament there was Bill C-284, tabled in response to the Westray disaster, the Department of Justice's paper, the hearings of the Standing Committee on Justice and Human Rights, the government's response and this bill.

We have not gone without discussion and deliberations of the issues in this matter.

Senator Andreychuk: I do not want Senator Moore to feel that he has not done his job, because I think there has been lots of discussion. However, that does not take away from our role and how we conduct business. I commend everyone for studying issues generally, but when a bill arrives here there are certain things that we must do, and we are not doing them. That does not diminishe the studies done by other people or bodies or the importance of this bill, and that is why we will be voting for it, but I do not think that is how we should conduct our business.

The Chairman: Is it agreed, honourable senators, that the committee move to clause-by-clause consideration of Bill C-45, to amend the Criminal Code — criminal liability of organizations?

Hon. Senators: Agreed.

The Chairman: Shall the title stand postponed?

Hon. Senators: Agreed.

The Chairman: Shall clause 1 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 2 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 3 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 4 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 5 carry?

Hon. Senators: Agreed.

The Chairman: Shall 6 clause carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 7 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 8 carry?

Hon. Senators: Agreed.

The Chairman: Shall clause 9 carry?

Hon. Senators: Agreed.

The Chairman: Shall clauses 10 to 20 carry?

Hon. Senators: Agreed.

The Chairman: Shall clauses 21 to 23 carry?

Hon. Senators: Agreed.

The Chairman: Shall the title carry?

Hon. Senators: Agreed.

The Chairman: Is it agreed, honourable senators, that the bill be adopted without amendment?

Hon. Senators: Agreed.

The Chairman: Does the committee wish to append observations as were made by Senators Joyal, Andreychuk and Beaudoin?

Is it the committee's wish that they be general observations without attaching the names of senators?

Senator Andreychuk: Feel free to attach the names.

Senator Moore: I think Senator Joyal wanted to be so noted personally.

Senator Andreychuk: I think you should note our objections, but I also would like to point out that we are creating a codified duty of care here and, as Mr. Piragoff said, they will ensure that there is the best dissemination. I think we should include that additional comment.

The Chairman: Which members of the committee want to have their names duly noted in the observation?

Senator Andreychuk, Senator Beaudoin and Senator Joyal.

The Chairman: Is it agreed that I report this bill with observations to the Senate this afternoon?

Hon. Senators: Agreed.

The committee adjourned.