Financial Exploitation of Crime 1996


[7] It must be noted at this time that the regulation of indirect profits from crime to prevent criminals from exploiting their crime is, in this country, a relatively novel area for legislative action. That fact necessarily means that the options available must be shaped by constitutional concerns. Although, therefore, the Conference has already been provided with a constitutional opinion, it is necessary to reiterate more precisely what that constitutional opinion provided so that it can be determined what legislative possibilities are available. Generally, the constitutional position can be summarized as follows.

1. Criminal Law

[8] The class of criminal law has generally been described as requiring legislation that relates to matters within the traditional field of criminal law, namely public peace, order, security, health and morality,  9 in the form of a prohibition and a penalty. S10 While there is some support in the case law that the taking of some of the proceeds of a criminal exploitation will not be considered to be a penalty as that term applies to section 91(27),  11 the better indication is that it depends upon the particular circumstances.  12 While it may be safe to conclude that any such legislation would contain a penalty, it is more difficult to conclude that the remainder of the ingredients of a valid criminal statute may be said to exist.

[9] The reason for this is that, despite the existence of a penalty, it would be very hard to say that any such legislation is designed to criminalize the exploitation of a crime, 13 even though it may be said, in the broadest sense, that legislation dealing with the exploitation of crime may be said to have been promoted because of moral outrage.  14 Moreover, it has never been suggested that legislation be designed to actually prohibit any exploitation by, for example, prohibiting criminals from recounting their criminal experiences. If legislation did try to prohibit any such exploitation, it would no doubt be considered an infringement of section 2(b) of the Canadian Charter of Rights and Freedoms and would likely be impossible to justify as a reasonable limit in a free and democratic society.

[10] It must be concluded, therefore, that the only relationship that any proposed legislation would have with criminal law is that it deals with people who have committed criminal offences. That, clearly, is not sufficient to justify federal legislative action under section 91(27) of the Constitution Act, 1867.

2. Canadian Charter of Rights and Freedoms

[11] In addition to determining what level of law-making authority has jurisdiction in this area, it must also be determined whether such laws are inconsistent with the Canadian Charter of Rights and Freedoms. In this regard, it must noted that the Supreme Court of Canada has stated that, so long as the activity dealt with in the legislation can be characterized as expression, if the legislator intended that the legislation restrict attempts to exercise section 2(b) rights, then "there has been a limitation by law of s. 2(b) and a s. 1 analysis is required to determine whether the law is inconsistent with the provisions of the Constitution." 15 In other words, so long as at least one of the purposes of the legislation is to take some or all of the profits from a criminal for exploiting a crime "which crime is usually exploited by an individual using his or her right of expression" it must be accepted that a Charter right has been infringed.

3. Section 1 Justification

[12] Once a Charter breach has occurred, it must be determined whether that breach can be justified under section 1. In making this determination, the courts apply the Oakes test 16 of whether the objectives sought to be achieved by the legislation are pressing and substantial in a free and democratic society and whether the means chosen by the legislator are proportional to its objective. In other words, in determining whether the legislation can be upheld despite the Charter breach, the courts will examine both the purpose for enacting the legislation and the drafting of the legislation.

[13] Although it has been submitted above that the real purpose behind the legislation is to prevent criminals from exploiting their crime and thereby earning profit, because of the particular way that legislation of this type is often drafted, it also appears as if the legislators had intended to create this legislation in order to provide financial assistance for victims of crime. Ironically, this latter purpose is probably more likely to be viewed by a court to be a pressing and substantial concern in a free and democratic society.

[14] Whether the purpose of the legislation is to prevent criminals from profiting or to assist victims of crime, there are a number of Charter problems that can complicate the drafting of the legislation. For the purposes of determining whether legislation can be justified at this stage, courts generally look to three different questions: (1) whether there is a rational connection between the way the legislation has been drafted and its objective; (2) whether the means sought to achieve the legislative objective minimally impair the Charter right affected; and, (3) whether the effect of the legislation is so severe as to outweigh the legislator’s pressing and substantial objective. Assuming that legislation can be drafted that satisfies the first criterion, the problem lies in the application of the final two.

[15] If the purpose of the legislation is to prevent criminals from profiting from their crimes, then that objective can be met by taking some of the criminal’s money. If too much money is taken, or if money is taken and retained for such a long time that it amounts to taking the criminal’s money, then it is submitted that the courts may find that the legislation does not satisfy the minimal impairment test. 17 It has also been suggested,18 and I submit correctly so, that if the legislation seeks to take money from authors whose crime or whose exploitation of crime is not likely to give rise to moral outrage, then the courts might very well conclude that the deleterious effect of the legislation is disproportionate to its salutary effect.  19

[16] If the purpose of the legislation is to assist victims, then the best way that can be done while least affecting the criminal’s right to expression is to facilitate victims in their suit against the criminal. This can be done, for example, by ensuring that all convictions will be treated by the civil courts as proof of the liability of the criminal to the victim 20 and by setting out in legislation the amount of money that victims can receive for various types of non-pecuniary damages. 21 Certainly if money is merely taken from the criminal and held in trust for a long period of time just so that victims may be better able to recover their damage award, that impact on the criminal’s right to expression may be disproportionate to the benefits to the victims.

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