Government Response to the Fifteenth Report of the Standing Committee on Justice and Human Rights

Corporate Liability

November 2002

Introduction

The Government thanks the Standing Committee on Justice and Human Rights for its Report and notes its recommendation that "the Government table in the House legislation to deal with the criminal liability of corporations, officers and directors."

The Standing Committee held hearings into the subject as a result of the House of Commons voting on Tuesday, February 19, 2002, to refer to the Standing Committee the subject matter of Bill C-284, An Act to amend the Criminal Code (offences by corporations, directors and officers). The referral to the Standing Committee reflected the widespread concern shared by all parties in the House during the debate on Bill C-284 that Canada's current law, developed by the courts on a case-by-case basis, was inadequate for modern conditions. During the debate, Members expressed a desire for more input on the options available to them and more information on the implications of choosing any specific model.

The referral by the House also reflected a desire to hear from all stakeholders before proceeding to make changes to the criminal law. Achieving consensus on criminal law reforms is always difficult, especially. It is perhaps more difficult when the issue has the potential to polarize major elements of society. The application of the criminal law to the modern corporate world is one of those difficult subjects because labour, management, shareholders and other significant stakeholders can have different interests.

The complexity of the issue is reflected by the experience, not only of Canada, but also of other countries in attempting to reform the law. Although reform has been the subject of academic comment and many proposals for reform have been put forward, actual reform of the law has been very difficult.

There are different systems in place in Canada, the United States, the United Kingdom, members of the European Union and Australia and several models for imposing criminal liability on corporations have been proposed. The Department of Justice outlined the current law and the main features of reform proposals in a Discussion Paper that was provided to the Standing Committee. As well, officials of the Department made a presentation to the Standing Committee and responded to questions. In turn, the Standing Committee provided the Discussion Paper to the witnesses who appeared before it.

The Standing Committee heard from 30 witnesses whose presentations ranged from calling for the immediate passage of C-284 to questioning whether the criminal law was in need of any change whatsoever. The evidence presented at the hearings of the Standing Committee has been of significant assistance to the Government in refining the issues. The Government notes that most witnesses called for reform of the law governing corporate criminal liability but that there was no consensus onas to the appropriate way to proceed.

The Standing Committee's decision to call for tabling legislation without weighing the presentations made to it and developing a consensus as to the principles that should be reflected in the amendments to the criminal law leaves the Government to draw its own conclusions from its review of the presentations of witnesses and comments by individual Committee members. The Government has carefully considered the debates in the House on C-284, the evidence at the hearings and the proposals for reform that have been put forward in Canada and elsewhere.

The Government accepts the conclusion of the Standing Committee that legislative change is required. The Government intends to present specific legislative proposals in the House of Commons in 2003.

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