Charter Statement - Bill C-69: An Act to implement certain provisions of the budget tabled in Parliament on April 16, 2024 (Budget Implementation Act, 2024, No. 1)

Bill C-69: An Act to implement certain provisions of the budget tabled in Parliament on April 16, 2024 (Budget Implementation Act, 2024, No. 1)

Tabled in the House of Commons, May 27, 2024

Explanatory Note

Section 4.2 of the Department of Justice Act requires the Minister of Justice to prepare a Charter Statement for every government bill to help inform public and Parliamentary debate on government bills. One of the Minister of Justice’s most important responsibilities is to examine legislation for inconsistency with the Canadian Charter of Rights and Freedoms [“the Charter”]. By tabling a Charter Statement, the Minister is sharing some of the key considerations that informed the review of a bill for inconsistency with the Charter. A Statement identifies Charter rights and freedoms that may potentially be engaged by a bill and provides a brief explanation of the nature of any engagement, in light of the measures being proposed.

A Charter Statement also identifies potential justifications for any limits a bill may impose on Charter rights and freedoms. Section 1 of the Charter provides that rights and freedoms may be subject to reasonable limits if those limits are prescribed by law and demonstrably justified in a free and democratic society. This means that Parliament may enact laws that limit Charter rights and freedoms. The Charter will be violated only where a limit is not demonstrably justifiable in a free and democratic society.

A Charter Statement is intended to provide legal information to the public and Parliament on a bill’s potential effects on rights and freedoms that are neither trivial nor too speculative. It is not intended to be a comprehensive overview of all conceivable Charter considerations. Additional considerations relevant to the constitutionality of a bill may also arise in the course of Parliamentary study and amendment of a bill. A Statement is not a legal opinion on the constitutionality of a bill.

Charter Considerations

The Minister of Justice has examined Bill C-69, An Act to implement certain provisions of the budget tabled in Parliament on April 16, 2024, for any inconsistency with the Charter pursuant to his obligation under section 4.1 of the Department of Justice Act. This review involved consideration of the objectives and features of the bill.

What follows is a non-exhaustive discussion of the ways in which Bill C-69 potentially engages the rights and freedoms guaranteed by the Charter. It is presented to assist in informing the public and Parliamentary debate on the bill. It does not include an exhaustive description of the entire bill, but rather focuses on those elements relevant for the purposes of a Charter Statement.

The main Charter-protected rights and freedoms potentially engaged by the proposed measures include:

Part 1

Use and disclosure of information

Part 1 would make a number of amendments to section 241 of the Income Tax Act, which governs the use and disclosure of taxpayer information. A proposed amendment would authorize the Minister of National Revenue and the Minister of Finance to communicate to the public certain information regarding subsidies, in the form of refundable tax credits, that are claimed by or provided to Canadian corporations and certain types of trusts investing in clean technologies. Specifically, the Ministers would be authorized to make available to the public the name of each corporation or trust that claimed or received a clean economy tax credit, as well as the name of a partnership if the corporation or trust claimed or received the credit based on its membership in the partnership. The Minister would also be authorized to disclose the type of the tax credit claimed or received, for example, whether it was a clean technology investment tax credit, carbon capture, utilization, and storage tax credit, clean hydrogen tax credit or clean technology manufacturing investment tax credit, and the period to which it relates. The proposed amendment would also authorize the disclosure of taxpayer information by the Canada Revenue Agency to any person solely for the purposes of the new public disclosure authority.

Part 1 would also amend, by re-enacting, a number of existing provisions which govern the uses to which taxpayer information can be put, in order to remove outdated references to the Unemployment Insurance Act and to replace references to Her Majesty with references to His Majesty. These provisions allow for the use of taxpayer information for various purposes relating to the administration and enforcement of the Income Tax Act, the Employment Insurance Act and the Canada Pension Plan, as well as in the supervision, evaluation and discipline of persons engaged or employed by His Majesty who assist in carrying out the provisions of those Acts.

Because the amendments would authorize the communication and disclosure of taxpayer information, they have the potential to interfere with privacy interests and may engage section 8 of the Charter. The following considerations support the consistency of these amendments with section 8.

The proposed amendments are administrative in nature and would apply in a context where privacy expectations are generally reduced. The purpose of the existing provisions that would be re-enacted is to ensure that taxpayer information can be used for purposes closely related to the purposes for which the information was provided, that is, for the administration and enforcement of the Income Tax Act, as well as the Canada Pension Plan and Employment Insurance Act. Both of these Acts require taxpayer information for purposes such as determining eligibility for benefits. The purpose of the proposed amendments related to clean economy tax credits is to provide transparency regarding the use of tax dollars to provide subsidies, in the form of refundable tax credits, in support of investments in clean technology. The information that may be publicly disclosed is limited to the name of the entity and relevant partnership of which it was a member that claimed or received the tax credit, the type of tax credit received and the relevant period. The Ministers’ authority to communicate this information is discretionary and would be exercised in accordance with the Charter.

Administrative Monetary Penalties

Part 1 would create an administrative monetary penalty for failure to file a compliance report for a clean hydrogen project for which a clean hydrogen tax credit was claimed. Given the possibility of substantial monetary penalties, this amendment could potentially be perceived as impacting s. 11 Charter rights.

The following considerations support the consistency of the amendment with the Charter. The process leading to the imposition of a monetary penalty would be administrative in nature. The purpose of imposing a penalty would be to promote conduct that complies with the purposes of the relevant portions of the Act, that is to say the timely filing of compliance reports that are used in assessing the continued eligibility for the tax credit. Each administrative monetary penalty would be calculated by a formula based on the amounts of tax credits claimed, and the number of days during which the failure continues, and would be capped at a maximum of the total of all clean hydrogen tax credits claimed by the taxpayer in respect of the project. The proposed penalty provision would closely follow the example of existing administrative monetary penalty provisions in other tax statutes. In this context, the imposition of a penalty would not give rise to “true penal consequences” for the purpose of section 11 of the Charter.

Part 2

Part 2 would enact the Global Minimum Tax Act to implement a global minimum tax regime, under which large multinational corporations are subject to a minimum effective tax rate of 15% on profits generated in any jurisdiction in which they operate. The tax would apply to multinational enterprise groups with consolidated annual revenue of at least €750,000,000, calculated in Euros to reflect international practices. The Act would set rules for determining liability for the tax as well as reporting and filing requirements. As found in other taxation statutes, to promote compliance with its provisions the Act would include administration and enforcement provisions. This Part also makes consequential amendments to other statutes.

Powers to Collect, Disclose and Use Information

The Global Minimum Tax Act would enact powers to collect, disclose and/or use information. The Minister of National Revenue would be authorized to require any person to provide information or records for a purpose related to the administration or enforcement of the Act. The Act would also empower the Minister to require a person resident in Canada or non-resident person that carries on business in Canada to provide any foreign-based information or record. The term “foreign-based information or record” would be defined as any information or record that is available or located outside Canada and that may be relevant to the administration or enforcement of the Act. In addition, information collected under the Act would be confidential, with disclosure and use of confidential information allowed only in specified circumstances. The measures to collect, disclose and/or use information potentially engage section 8 of the Charter.

The following considerations support the consistency of these measures with section 8. Privacy interests are generally diminished in the regulatory and administrative contexts, and the standard to authorize a privacy intrusion for administrative and regulatory purposes is generally lower than the Charter standards that apply for the purpose of investigating offences. The Act would not prohibit disclosure and use of confidential information in the context of criminal proceedings after charges are laid, for example to facilitate disclosure of third-party records, or for the purpose of administration or enforcement of the Act or other tax statutes.

The powers to collect information are intended to support the proper administration of the regime by allowing the Canada Revenue Agency to obtain information required to accurately assess global minimum tax liability. The collection powers include measures to safeguard privacy interests, such as a requirement for judicial authorization to compel information about unnamed persons or for more intrusive collection.

The powers allowing disclosure of information would serve the purpose of ensuring consistency among such authorities in federal tax and related statutes administered and enforced by the Canada Revenue Agency so that they interact seamlessly with the confidentiality obligations contained in each of the several statutes. The disclosure authorities need to align with those in the other statutes in order to avoid the Act’s confidentiality obligations frustrating the operation of the other statutes. The powers safeguard privacy interests by limiting allowable disclosure to specified purposes in specified circumstances. The information that would be liable to disclosure would have already been disclosed to the government and so privacy expectations would be reduced in relation to other government uses. The Act also protects any privacy interest in the relevant information by prohibiting its unauthorized disclosure and making it an offence punishable by a fine up to $5,000 or a maximum term of imprisonment of 12 months or both.

Administrative monetary penalties

The Global Minimum Tax Act would establish administrative monetary penalties where a person fails to fulfill certain requirements of the Act. Such penalties may be imposed by the Minister of National Revenue in the following circumstances under the Act: failure to file a return when required; making false statements or omissions; failure to provide information or records when required; pursuing an unreasonable appeal to defer the payment of an amount payable; and tax avoidance planning. Given the possibility of substantial monetary penalties, the new provisions could potentially be perceived as impacting section 11 Charter rights.

The following considerations support the consistency of the provisions with the Charter. The process leading to the imposition of a monetary penalty would be administrative in nature. The purpose of imposing a penalty would be to promote conduct that complies with the purposes of the relevant portions of the Act. Each administrative monetary penalty would be calculated by a formula based on the nature of the violation and other factors, such as the duration of a non-compliance. The proposed penalty provisions would closely follow the example of existing administrative monetary penalty provisions in other tax statutes. In this context, the imposition of a penalty would not give rise to “true penal consequences” for the purpose of section 11 of the Charter.

Offences and Punishment

The Global Minimum Tax Act would establish offences that sanction, among other things, the failure to file a return or to comply with an obligation or order, making or participating in the making of false or deceptive statements, and intentionally failing to pay tax as required under the provisions. A general offence provision would also be created to promote compliance with the new tax scheme as a whole. Punishment under the new offence provisions could be a fine or imprisonment or both. While there are mandatory minimum fines there is no mandatory minimum term of imprisonment. For instance, failing to file a return or comply with an obligation or order has a mandatory minimum fine of $2000, with a maximum fine of $40,000 or imprisonment up to 12 months or both; making a false or deceptive statement has a mandatory minimum fine of 50% of the amount payable, with a maximum fine of 200% of the amount payable, imprisonment up to five years, or both.

Because the offence provisions could lead to a term of imprisonment, they have the potential to engage the liberty interest under section 7 of the Charter, and so must accord with the principles of fundamental justice.

In reviewing the offence provisions, the Minister has not identified any potential inconsistencies of the provisions with the principles of fundamental justice under section 7. The scope of the offences are tailored to the legislative objectives, such as ensuring returns are filed when required, promoting accuracy in returns, statements, and records, and furthering the overall goal of compliance with the Act. Finally, upon conviction a judge will have discretion to impose a fit and appropriate sentence.

Because the fines have mandatory minimum amounts and would be imposed as punishment for an offence, they have the potential to engage section 12 of the Charter.

The following factors support the consistency of the mandatory minimum fines with section 12. The potential offenders are corporate entities with annual revenue of at least €750,000,000, or their officers and directors. A corporate entity does not benefit from the protection of section 12. With respect to individuals, including officers and directors, the mandatory minimum fine amounts would not be excessive considering the scale of the business activities to which the new provisions would apply.

Inspection, Requirement and Search Powers

The Global Minimum Tax Act would grant powers similar to those in other tax statutes. A person authorized by the Minister of National Revenue would be allowed to inspect the records, processes, property or premises of a person that may be relevant to determining tax obligations, and to verify compliance with the new provisions. Authorized persons would have the ability to require a person to give all reasonable assistance in the context of the inspection including by answering all proper questions related to the administration or enforcement of the new provisions. The provisions would also permit authorized persons to search any building or place by way of a warrant for any record or thing that may provide evidence of the commission of an offence under the new provisions, and to seize any such record or thing. The proposed measures described above potentially engage the protection against unreasonable search or seizure under section 8 of the Charter.

The following considerations support the consistency of the measures with section 8. The inspection and requirement powers would not be available to further a penal investigation. Rather, they would be available for regulatory purposes, such as to determine tax obligations and to verify compliance with the new provisions. In these circumstances, privacy expectations are reduced. In the case of a place occupied as a residence where privacy interests are heightened, inspectors would only be authorized to enter with the consent of the occupant or with a warrant issued by a judge. A warrant would also be required to search and seize records or things that are expected to provide evidence of the commission of an offence under the new provisions. Warrants issued under the new provisions would be obtained through judicial authorization, meaning a judge would be satisfied there are reasonable grounds to believe the relevant record or thing will likely be found in the premises and afford evidence of the offence, thus meeting the requirements under section 8 for a search or seizure to be reasonable.

Inquiry Powers of a Hearing Officer

The Global Minimum Tax Act would allow a hearing officer authorized by the Minister of National Revenue to make an inquiry necessary for any purpose related to the administration and enforcement of the Act. The hearing officer would have the power to summon any witnesses to the inquiry, and to require them to give oral or written evidence under oath or produce relevant documents or things. Any person who gives evidence or whose affairs are being investigated in the course of an inquiry would be entitled to be represented by a lawyer.

The power to compel an individual to attend at a specified place for oral examination under oath potentially engages the liberty interest under section 7 of the Charter, which includes residual protections against self-incrimination.

The following considerations support the consistency of these powers with section 7. The power to compel testimony serves an important purpose, namely the administration and enforcement of a statute that imposes a tax on revenue from commercial services; it is not available for the predominant purpose of furthering a prosecution against the witness. In addition, any incriminating evidence compelled during an inquiry may not be used in another proceeding if such use would violate the principle against self-incrimination. Further, subjects of an inquiry and any witnesses would have the right to be represented by a lawyer.

The power to compel production of documents or things at an inquiry potentially engages privacy interests protected by section 8 of the Charter.

The following considerations support the consistency of this power with section 8. The type of documents or things that may be required to be provided must be relevant to the administration and enforcement of a tax statute in a context where privacy expectations are reduced. Further, an order to produce a document or thing is not particularly intrusive, as it does not involve entry into a taxpayer’s private property to conduct a search or seizure. Similar inquiry powers that exist in other tax statutes have been upheld by the courts.

Part 3

Division 3
Underused Housing Tax Act

Division 3 proposes clarifying amendments with respect to the existing incorporation into the Underused Housing Tax Act (the Act) of provisions from the Excise Act, 2001 to authorize the disclosure in specified circumstances of information collected in the course of administering and enforcing the Act (e.g., the name and address of a person subject to the Act, their citizenship status and their ownership percentage of residential property located in Canada). The disclosure of the relevant information has the potential to engage section 8 of the Charter.

The following considerations support the consistency of these measures with section 8. The purpose of the proposed amendment is to ensure the consistency of the disclosure authorities in the federal tax and related statutes administered and enforced by the Canada Revenue Agency so that they interact seamlessly with the confidentiality obligations contained in each of the several statutes. The disclosure authorities under the Act need to align with the disclosure authorities in the other statutes in order to avoid the Act’s confidentiality obligations frustrating the operation of the other statutes. The degree of privacy that can be reasonably expected in regulatory and administrative contexts is generally lower. The information that would be liable to disclosure would have already been disclosed to the government and so privacy expectations would be reduced in relation to other government uses. Only information that would be relevant to the specified purpose would be authorized to be disclosed. The standard that needs to be met to authorize invasions of privacy for administrative and regulatory purposes is generally lower than the Charter standards that generally apply to authorize invasions of privacy for the purpose of investigating offences. The Act otherwise protects any privacy interest in the relevant information by prohibiting its unauthorized disclosure and use, punishable by up to 12 months imprisonment and/or a fine of up to $5000.

Division 4
Greenhouse Gas Pollution Pricing Act

Disclosure of information – provincial governments

Proposed amendments to the Greenhouse Gas Pollution Pricing Act (the Act) would enable the disclosure of information related to provincial governments’ and their agents’ activities that are regulated under Part 1 of the Act, as well as their compliance or non-compliance with Part 1 of the Act. Part 1 of the Act imposes a fuel charge that applies to persons including producers, distributors and importers of various types of carbon-based fuels and combustible waste. Under Part 1 of the Act, confidential information is broadly defined as information of any kind that is obtained by or on behalf of the Minister of National Revenue for the purposes of the Act. This information in relation to a provincial government or their agent could be disclosed within the federal government when a provincial government or their agent is not complying with obligations under Part 1 of the Act or have stated an intention not to comply, solely for the purposes of the evaluation or formulation of a response. Further, certain enumerated types of that information (such as registration status under Part 1 of the Act, data about fuel types and quantities used, amounts of fuel charge outstanding, and enforcement steps that are contemplated to be taken by the Minister of National Revenue) could be disclosed publicly when a provincial government or their agent is not complying with obligations under Part 1 of the Act or have publicly stated an intention not to comply. The disclosure of the relevant information, which could include information that may be commercially sensitive, has the potential to interfere with a reasonable expectation of privacy so as to engage section 8 of the Charter.

The following considerations support the consistency of these measures with section 8. To the extent that the information in question is that of a provincial government or its agent, they are not rights-holders under the Charter. Generally, governments must respect rights and freedoms; they are not protected by them. To the extent that any other person may have a reasonable expectation of privacy in the relevant information, the degree of privacy that can be reasonably expected in regulatory and administrative contexts is generally lower. The proposed disclosure authorities would enable the transparency that is essential to public understanding and accountability in relation to non-compliance by another level of government with legal obligations under Part 1 of the Act. The Act otherwise protects any privacy interest in the relevant information by prohibiting its unauthorized disclosure and making it an offence subject to a potential penalty of up to 12 months imprisonment and/or a fine of up to $5000.

Disclosure of information - general

Division 4 also proposes clarifying amendments with respect to the existing incorporation into the Act of provisions from the Excise Act, 2001. The incorporation of these provisions into the Act has the effect of authorizing the disclosure in specified circumstances of information collected in the course of administering and enforcing Part 1 of the Act. The disclosure of the relevant information, which could include information that may be commercially sensitive, has the potential to engage section 8 of the Charter.

The following considerations support the consistency of these measures with section 8. The purpose of the proposed amendment is to ensure the consistency of the disclosure authorities in the federal tax and related statutes administered and enforced by the Canada Revenue Agency so that they interact seamlessly with the confidentiality obligations contained in each of the several statutes. The disclosure authorities under Part 1 of the Act need to align with the disclosure authorities in the other statutes in order to avoid the Act’s confidentiality obligations frustrating the operation of the other statutes. The degree of privacy that can be reasonably expected in regulatory and administrative contexts is generally lower. The information that would be liable to disclosure would have already been disclosed to the government and so privacy expectations would be reduced in relation to other government uses. Only information that would be relevant to the specified purpose would be authorized to be disclosed. The standard that needs to be met to authorize invasions of privacy for administrative and regulatory purposes is generally lower than the Charter standards that generally apply to authorize invasions of privacy for the purpose of investigating offences. The Act otherwise protects any privacy interest in the relevant information by prohibiting its unauthorized disclosure and making it an offence subject to a potential penalty of up to 12 months imprisonment and/or a fine of up to $5000.

Offence

Division 4 would amend the offence of knowingly using confidential information for a purpose other than the one for which it has been disclosed, which carries a potential penalty of up to 12 months imprisonment and/or a fine of up to $5000. Section 7 of the Charter protects against the deprivation of an individual’s right to life, liberty and security of the person, unless done in accordance with the principles of fundamental justice. Offences that can be punished by a term of imprisonment deprive the right to liberty and so must accord with the principles of fundamental justice. The scope of the offence is tailored to capture conduct linked to the legislative purpose of protecting confidential information under the Act from unauthorized use or access. In reviewing the relevant provisions, the Minister has not identified any potential inconsistencies with the principles of fundamental justice, including the principles against arbitrariness, overbreadth and gross disproportionality.

Part 4

Division 16
Consumer-Driven Banking Framework

Division 16 would enact a new Consumer-Driven Banking Act to establish a framework to allow consumers to securely share their financial data with participating entities of their choice. This Division would also amend the Financial Consumer Agency of Canada Act to enable the Financial Consumer Agency of Canada to oversee and administer the functions relating to this framework.

Powers related to personal information

This Division would amend the Financial Consumer Agency of Canada Act to allow the Senior Deputy Commissioner to collect any personal information necessary to further the objects of the Financial Consumer Agency of Canada. This includes the objectives to determine compliance with the Act and relevant terms and conditions, monitor and evaluate trends and emerging issues relating to consumer-driven banking, and to foster participation in and understanding of consumer-driven banking among consumers. Information collected under this power would be treated as confidential. The Senior Deputy Commissioner would be able to disclose this information to bodies that regulate and/or supervise financial institutions or participating entities on a public registry maintained by the Financial Consumer Agency or the Governor of the Bank of Canada for purposes relating to that regulation or supervision. The Senior Deputy Commissioner would also be able to disclose this information to the Deputy Minister of Finance or authorized officers of the Department of Finance for policy analysis relating to the regulation of financial institutions or participating entities. The Senior Deputy Commissioner may only disclose this information if satisfied that the receiving body will treat it as confidential. Since these provisions govern the collection and disclosure of information that could attract a reasonable expectation of privacy, they could have potential effects under section 8 of the Charter.

The following considerations support the consistency of these provisions with section 8 of the Charter. Information collected would be limited to information that would be relevant for performance of the Senior Deputy Commissioner’s duties and functions under the Act relating to the objects of the Financial Consumer Agency of Canada, including determining compliance with the Act and its relevant terms and conditions. There is also an obligation to keep the information collected confidential. Disclosure of this information is only permitted for narrow purposes relating to the regulation or supervision of financial institutions or participating entities. Furthermore, privacy interests are diminished in regulatory or administrative contexts, where the potential intrusion is for regulatory or administrative purposes such as ensuring compliance with a statute, rather than for the purpose of investigating offences. In reviewing the relevant provisions, the Minister has not identified any potential effects that could constitute an unreasonable interference with privacy as protected by section 8.

Administrative Monetary Penalties

This Division also proposes to update provisions relating to the existing administrative monetary penalties regime in the Financial Consumer Agency of Canada Act to include references to the Senior Deputy Commissioner and the proposed Consumer-Driven Banking Act and its regulations. Under this administrative monetary penalty regime, the Commissioner or Senior Deputy Commissioner would be empowered to issue notices of violation and proposed penalty, based on reasonable grounds that a person has committed a violation. Recipients of a notice of violation and penalty would have a right to pay the penalty or make representations with respect to the violation and proposed penalty. If representations are made, the Commissioner or Senior Deputy Commissioner would determine on a balance of probabilities whether the person has committed the violation, and whether to impose the penalty proposed, a lesser penalty, or no penalty. The Governor in Council would be empowered to make regulations fixing the penalties at up to $1,000,000 for violations by a natural person and $5,000,000 for participating entities.

The following considerations support the consistency of the above provisions with the Charter. The amendments to the existing administrative monetary penalty regime under the Act would not involve criminal charges, prosecution, or sentencing, nor would they provide for imprisonment. The purpose of the penalty would be to promote compliance with the Act or relevant agreements or terms and conditions under the Act, rather than to punish, as that concept is defined for the purpose of section 11 of the Charter. There is no minimum prescribed penalty. In this statutory context, these provisions would not authorize the imposition of a penalty that would have “true penal consequences” for the purpose of section 11.

Offences – Conflicts of Interest

This Division would amend existing offences relating to conflicts of interest under section 16(2) of the Financial Consumer Agency of Canada Act to add participating entities or the technical standards body among those who may not make a grant or gratuity to the Commissioner, Senior Deputy Commissioner, or a Deputy Commissioner, or their employees. This provision states that those guilty of this offence are liable on summary conviction to a fine of up to $2000 or to imprisonment up to six months, or on conviction on indictment, a fine up to $10,000 or imprisonment up to five years.

The offence provisions would be punishable by imprisonment, and so would engage the right to liberty under section 7 of the Charter. In reviewing the relevant measures, the Minister of Justice has not identified any potential inconsistencies of the offence provisions with the principles of fundamental justice under section 7. The scope of the offences is tailored to only capture conduct linked to the objectives of preserving the integrity of the Financial Consumer Agency of Canada in its supervisory role, specifically by avoiding conflicts of interest and prohibiting attempts to influence the activities of the Agency through bribes or other similar means. Upon conviction, a judge will have discretion to impose a fit and appropriate sentence.

Offences – False and misleading representations and information

The proposed Consumer-Directed Banking Act would include a number of prohibitions aimed at preventing persons who are not participating entities from holding themselves out to be participating entities and would also prohibit persons from providing false or misleading information in relation to their participation under the Act. As these prohibitions would be punishable by imprisonment, they would engage the right to liberty protected under section 7 of the Charter.

The following considerations support the consistency of these provisions with section 7. The prohibitions that relate to falsely claiming to be a participating entity serve the Act’s objectives by preventing entities from misleading customers as to whether the entities are subject to the various requirements that the eventual framework would include. These could include technical, privacy and consumer-protection requirements that would be key to a consumer’s decision to do business with a participating entity. The prohibition against providing false or misleading information also serves the Act’s objectives by ensuring that individuals, participating entities and those involved in the administration of the Act are able to act on accurate information when making decisions with respect to a potential participating entity. It also ensures that any entities whose status has been suspended or revoked do not provide false or misleading information regarding their status under the Act. This would help ensure the proper functioning of the scheme.

Division 20
Canada Business Corporations Act

Division 20 would make a number of amendments to the Canada Business Corporations Act.

Offences and punishment

Division 20 would re-enact and amend section 21.4(5) of the Act, which sets out the punishment for offences in sections 21.4(1) to (4) applicable to directors, officers and shareholders of a corporation who knowingly contravene obligations under the Act in respect of the preparation, maintenance and disclosure of beneficial ownership information. The proposed amendment would re-enact the punishment provisions as a hybrid offence. On indictment, the maximum penalty would remain a fine of up to $1,000,000 or a maximum term of imprisonment of 5 years or both. On summary conviction, the maximum penalty would be a fine of up to $200,000 or a maximum term of imprisonment of two years or both. Because section 21.4(5) of the Act includes the possibility of imprisonment, it engages the right to liberty protected by section 7 of the Charter.

The following considerations support the consistency of the proposed amendment with section 7. The Minister has not identified any potential inconsistencies with the principles of fundamental justice. The amended provision is tailored to the legislative objectives, such as ensuring compliance with the obligation to maintain accurate beneficial ownership information, providing such information to the Director and investigative bodies, and furthering the overall goal of making public certain information about individuals with significant control over a corporation. Finally, the proposed amendment would preserve judicial discretion to impose a fit and appropriate sentence in each case.

Division 21
Canada Labour Code (Improving Access to Protections for Employees)

The proposed amendments to the Canada Labour Code in this Division would create a new prohibition on the misclassification of employees and would be subject to the various offence provisions that currently exist in the Code. Certain offences could be punishable by imprisonment, and as such could engage the right to liberty protected by section 7 of the Charter.

The following considerations support the consistency of the proposed amendments with section 7. The Minister has not identified any potential inconsistencies with the principles of fundamental justice. The offences are tailored to capture only conduct that relates to the purpose of the proposed prohibition of misclassification of employees under the Canada Labour Code. The offences are not subject to any minimum punishment, and the maximum term of imprisonment of two years would only apply to an offence related to Part II of the Canada Labour Code dealing with occupational health and safety.

Division 31
Food and Drugs Act

Division 31 would amend the Food and Drugs Act (FDA) to give the Minister of Health the power to make orders based on three new authorities and to expand the power of the Governor in Council to make regulations.

The first authority would allow the Minister of Health to make an order, applicable to a person or a class of persons, if the Minister believes that the unintended use of a therapeutic product may present a risk of injury to health or the use of a drug intended for animals may present a risk of adverse effects for humans, animals or the environment. The authority would allow the Minister of Health to establish rules, including in relation to the sale, conditions of sale, advertising, packaging, labelling, and testing of the therapeutic product or the drug, in order to prevent, manage or control the risk of injury to health or the adverse effects of the unintended use of the product. The authority also allows for rules for the purpose of preventing promotion or appeal of a therapeutic product for an unintended use.

The second authority would allow the Minister of Health to make orders to exempt foods, therapeutic products or activities, other than in relation to cosmetics, from specified provisions of the FDA and its regulations, for a health or safety purpose or a purpose that is otherwise in the public interest.

The third authority would allow the Minister of Health to make an order to rely on a document, information or a decision of a foreign regulatory authority with respect to a therapeutic product or food, by deeming that the document, information or decision satisfies the requirements of the FDA or its regulations with respect to the therapeutic product or food.

The amendments to the FDA would also allow the Governor in Council to make regulations to prevent or alleviate a shortage in Canada of food for a special dietary purpose in order to protect human health.

An order for the purpose of preventing the promotion or appeal of the unintended use of a therapeutic product, such as with respect to the product’s advertising, packaging or labelling, has the potential to engage the right to freedom of expression under section 2(b) of the Charter.

Section 2(b) protects freedom of expression and generally extends to advertising and other expression that is done for commercial purposes, including commercial expression by corporations and individuals. The following considerations would support the consistency of the provision with section 2(b) of the Charter. The order is aimed at preventing the promotion or appeal of the unintended use of a therapeutic product and would be made for the purpose of preventing, managing or controlling the risk of injury to a person’s health. This type of commercial expression has a lower value compared to other forms of protected expression, because it generally lies further from the core of the right, which includes the search for political, artistic and scientific truth, the protection of individual autonomy and self-development, and the promotion of public participation in the democratic process. The fact that the expression is commercial in nature is a relevant factor in determining whether any limits on that expression are justifiable under the Charter.

A contravention of an order or the regulations would constitute an offence under the FDA. The new order-making powers can also be used to affect the scope of conduct that would constitute an offence under the FDA. As the penalty for an offence includes a term of imprisonment, the amendment has the potential to engage the right to liberty under section 7 of the Charter. The Minister of Justice has not identified any potential inconsistencies with the principles of fundamental justice under s. 7. The order and regulation authorities are tailored to the objectives of ensuring the health and safety of Canadians, and in particular, the health and safety of Canadians who may be at risk, such as vulnerable populations.

A person to whom an order or a regulation applies would be subject to the inspection provisions in the FDA. The power to require documents or information to be provided has the potential to engage s. 8 of the Charter which protects against unreasonable search or seizure. The following considerations support the consistency of this power with respect to section 8. Privacy interests are diminished in the regulatory and administrative contexts. Statutory powers to require relevant information to be provided for regulatory or administrative purposes, rather than for the purpose of investigating criminal offences, have been upheld as reasonable under section 8. The Minister of Justice has not identified any potential effects that could constitute an unreasonable interference with privacy as protected by section 8.

Division 32
Tobacco and Vaping Products Act

Division 32 amends the Tobacco and Vaping Products Act (TVPA). It would add a new provision to the TVPA requiring the Minister of Public Safety and Emergency Preparedness to provide customs information collected under the Customs Act to the Minister responsible for the administration and enforcement of the TVPA on request. This Division also amends the TVPA to authorize the discretionary disclosure of information collected under the TVPA to other federal ministers for certain related purposes. It would authorize the disclosure of this information to any federal minister for the purpose of verifying compliance with other federal legislation that also applies to tobacco products, tobacco product-related activities, vaping products or vaping product-related activities. Because the Division deals with disclosure of information, it has the potential to interfere with a reasonable expectation of privacy and so engage section 8 of the Charter, which protects against unreasonable search and seizure.

The following considerations support the consistency of these measures with the Charter. The new powers to collect customs information and to disclose information collected under the TVPA would be available for regulatory, not penal, purposes of verifying compliance with legal requirements that apply to tobacco and vaping products. As such, the measures are broadly equivalent to powers that have been upheld in other regulatory contexts where privacy interests are diminished. Importantly, the authority to disclose information to other federal ministers would be discretionary and this discretion would have to be exercised in accordance with the Charter. In addition, the current rules in the Customs Act protecting customs information would continue to apply.

Division 33
Criminal Code (Criminal Interest Rate)

Division 33 would amend the criminal interest rate offence in section 347 of the Criminal Code, which prohibits receiving interest or entering into an agreement or arrangement to receive interest at a criminal rate – that is, an interest rate above a certain percentage. Under amendments introduced in Bill C-47 in 2023 that have not yet come into force, the criminal rate would be set at an annual percentage rate above 35%. The amendments proposed in this bill would expand the offence in section 347 of the Criminal Code to include offering or advertising a loan at a criminal interest rate.

The potential penalties for offering or advertising a loan at a criminal interest rate would include imprisonment. As a result, the amendments engage the right to liberty under section 7 of the Charter.

The following considerations support the consistency of the amended criminal interest rate offence with section 7. The expanded offence would have the objective of preventing predatory lending that takes advantage of economically vulnerable people in Canada. It would allow for criminal sanctions for offering or advertising consumer loans charging interest well above standard acceptable rates. In addition, amendments introduced in Bill C-47, not yet in force, would allow for further tailoring of the scope of the offence through regulation – for example, to exempt certain types of credit agreements and arrangements from criminal liability.

The proposed amendments would potentially engage section 2(b) of the Charter since they would impose restrictions on advertising – a form of expressive activity.

The following considerations support the consistency of the proposed amendments with section 2(b). The amendments would prohibit advertising a service that is already illegal. The proposed amendments would provide greater clarity and ensure that conduct involved in attracting borrowers to an unlawful lending scheme is an offence under the Criminal Code. Imposing restrictions on commercial advertising of an illegal activity lies further away from the core values that underlie the protection of freedom of expression, such as democratic participation. Such restrictions may be viewed as a proportionate response to the important objective of protecting consumers against exploitative lending practices.

Division 34
Money Laundering, Terrorist Financing, Sanctions Evasion and Other Measures

Subdivision A – Proceeds of Crime, Money Laundering and Terrorist Financing Act

Subdivision A would make a number of amendments to the Proceeds of Crime, Money Laundering and Terrorist Financing Act (PCMLTFA).

Transporters of currency and other monetary instruments and cheque cashing businesses

Subdivision A would re-enact, with minor changes to ensure the internal consistency of the Act, amendments made by Bill C-30 in 2021 that are not yet in force. The amendments would subject transporters of currency and other monetary instruments to various requirements under the PCMLTFA that apply to Money Services Businesses. It would also extend these requirements to cheque cashing businesses. As these requirements involve the collection of personal information and its disclosure to the Financial Reports and Transactions Analysis Centre of Canada (FINTRAC) in certain circumstances, they have the potential to interfere with a reasonable expectation of privacy and therefore engage section 8 of the Charter.

The following considerations support the consistency of these amendments with section 8. Transporters of currency and other monetary instruments, as well as cheque cashing businesses. present a money laundering risk similar to other Money Services Businesses, as they play a role in the conduct of financial transactions on behalf of third parties. The numerous privacy protections in the PCMLTFA that currently apply to Money Services Businesses and their clients would apply equally to transporters of currency and other monetary instruments, as well as cheque cashing businesses.

Disclosure of information to the Department of Citizenship and Immigration

Amendments would require FINTRAC to disclose designated information to the Department of Citizenship and Immigration where FINTRAC has reasonable grounds to suspect that the information would be relevant to investigating or prosecuting a money laundering or terrorist financing offence, or that it is relevant to threats to the security of Canada. FINTRAC would also be required to determine that the designated information is relevant to determining whether someone is a person described in subsections 10(1) or 19(2), or section 22 of the Citizenship Act –that is, someone who has engaged in fraud in the context of a citizenship application, someone who constitutes a threat to the security of Canada or who has engaged in organized crime, or someone otherwise prohibited from obtaining citizenship. As these amendments require the disclosure of information to a government agency, they have the potential to engage section 8 of the Charter, which guarantees the right to be secure against unreasonable search and seizure.

The following considerations support the consistency of these amendments with section 8 of the Charter. Disclosure is only authorized where FINTRAC has already developed reasonable grounds to suspect that the information would be relevant to the investigation of a money laundering or terrorist financing offence, or threats to national security, and so would already be obligated to disclose it to the appropriate police force and other agencies. Disclosure to the Department of Citizenship and Immigration would be incidental and would reflect the reality that information related to money laundering, terrorist financing and threats to national security can reveal information relevant to eligibility for citizenship and citizenship fraud – including, for example, where an individual is involved in threats to the security of Canada, or organized crime. The disclosure power would not extend FINTRAC’s mandate beyond money laundering and terrorist financing, but would allow incidental disclosure of information that is already being disclosed to police.

Disclosure of information to provincial and territorial civil asset forfeiture agencies

The amendments would require FINTRAC to disclose designated information to provincial and territorial civil forfeiture agencies where FINTRAC has reasonable grounds to suspect both that the information would be relevant to investigating or prosecuting a money laundering or terrorist financing offence, and that the information would be relevant to civil forfeiture proceedings. As these amendments require the disclosure of information to a government agency, they have the potential to engage section 8 of the Charter, which guarantees the right to be secure against unreasonable search and seizure.

The following considerations support the consistency of these amendments with section 8 of the Charter. Disclosure is only authorized where FINTRAC has already developed reasonable grounds to suspect that the information would be relevant to the investigation of a money laundering or terrorist financing offence, and so would already be obligated to disclose it to the appropriate police force. Disclosure to provincial and territorial civil asset forfeiture agencies would be incidental and would contribute to the PCMLTFA’s statutory objective of depriving criminals of the proceeds of their criminal activity.

Offence - Verifications and reviews

Amendments would create an offence for contravening sections 9.92 and 9.93 of the PCMLTFA, which were introduced in Bill C-47 in 2023 but are not yet in force. Sections 9.92 and 9.93 impose obligations on Money Services Businesses to engage in due diligence before engaging an agent or mandatary, with a view to ensuring that they are not hiring an agent or mandatary who is ineligible for registration as a Money Services Business. Since the proposed amendments create a criminal offence subject to imprisonment, they engage the right to liberty guaranteed under section 7 of the Charter.

The following considerations support the consistency of the amendments with section 7 of the Charter. The Minister has not identified any potential inconsistencies with the principles of fundamental justice. The new offences would help ensure compliance with the new due-diligence obligations under the PCMLFTA and would capture only conduct inconsistent with those obligations. These obligations are rationally connected to the goal of the statute, in that they help ensure that those found ineligible to register as a Money Services Business cannot avoid the consequences of this ineligibility by acting on behalf of a registered Money Services Business. This in turn serves the goal of combating money laundering and terrorist financing, as it prevents persons and entities from engaging in activities that attract a risk of money laundering if they have been convicted of certain money-laundering and terrorist financing offences, as well as offences known to be associated with money laundering and terrorist financing, such as certain drug and terrorism offences.

Subdivision C – Criminal Code

Subdivision C would amend the Criminal Code to create two new orders. In addition to a “keep open account” order, it would create a new “repeating production order” power. On an ex parte application from a peace officer or a public officer, a justice or judge would be able to order a person to produce a document or data that is in their possession or control on the dates specified in the order. Before issuing such an order, the justice or judge would have to be satisfied that there were reasonable grounds to believe that an offence has been or will be committed under an Act of Parliament, and that if the document or data is in the person’s control on the dates specified, it will provide evidence of the offence. In addition, the order could require the person to produce copies of reports made under the PCMLTFA during the period that the order is in existence. Since an order could include documents or data where there is a reasonable expectation of privacy, it has the potential to engage section 8 of the Charter.

The following considerations support the consistency of these amendments with section 8. The order would be judicially authorized on a “reasonable grounds to believe” standard, which is the default standard for criminal searches. This has been defined in jurisprudence as “the point where a credibly based probability replaces suspicion.” It requires the police to point to particularized evidence to support an objective basis for the belief which is based on compelling and credible information. The order would contain the following restrictions: a production could not be ordered more than once in a 72 hour period, and productions would be limited to documents that are copies of documents, or documents that contain data that came into the person’s possession or control during the period the order is in effect. In addition, the order would be valid for a maximum 60-day period and provide for a maximum of six identified dates on which documents or data would be required to be produced over the duration of the order. Any request for production of reports made under the PCMLTFA would have to meet the same “reasonable grounds to believe” standard as other documents or data requested. Orders would be renewable only if the justice or judge were satisfied that the conditions for granting the order still existed. The granting of such an order would not require the recipient to preserve any data on an ongoing basis, but only to produce data that is in their possession or control on the dates specified. In addition, these orders could not be directed at a person who is under investigation for the offence that is under investigation. The issuing justice or judge would be able to impose any conditions that they consider appropriate, including any measures to protect information subject to solicitor-client privilege or the professional secrecy of advocates or notaries. The recipient of the order would also be able to apply for review of the order by a judge .

Division 35
Criminal Code (Motor Vehicle Theft)

Division 35 would amend the Criminal Code by enacting new offences in relation to motor vehicle theft under section 333.1 and new offences concerning devices used to commit motor vehicle theft under the proposed section 333.2. The amendments would also add an offence in relation to laundering the proceeds of crime under section 462.31 and make consequential amendments to the Criminal Code and other statutes.

Subsection 333.1(1) currently prohibits motor vehicle theft, providing a hybrid offence where conviction on indictment is punishable by a maximum term of imprisonment of 10 years, and by a minimum of six months’ imprisonment on a third or subsequent conviction; on summary conviction the maximum punishment is a term of imprisonment of two years less a day. The amendments would add two indictable offences to section 333.1. The first would create an offence for motor vehicle theft in which violence is threatened or attempted during its commission; the second would create a motor vehicle theft offence committed for the benefit of, at the direction of, or in association with a criminal organization. Conviction for either offence would be punishable by the current maximum term of imprisonment of 14 years.

The amendments would create two new offences under section 333.2 involving the possession and distribution of devices used for the purpose of committing motor vehicle theft. The first would prohibit possession of an electronic device that can be used to commit motor vehicle theft, with the purpose of doing so. The second would prohibit, for example, making, selling, repairing, distributing, and importing/exporting such a device while knowing it has been or is intended to be used to commit motor vehicle theft, without a lawful reason. These would both be hybrid offences where conviction on indictment would be punishable by a maximum term of imprisonment of 10 years and on summary conviction would be punishable by a fine of not more than $5000 or a maximum term of imprisonment of two years less a day or both. In addition, on conviction the electronic device may be forfeited to the Crown.

The amendments would also add an indictable offence under section 462.31 of the Criminal Code for laundering the proceeds of crime for the benefit of, at the direction of, or in association with a criminal organization. The offence would be punishable by a maximum term of imprisonment of 14 years. Further, these new offences would all be added to the list of designated offences under section 183 of the Criminal Code, which allows investigators to seek judicial authorization to intercept private communications, and section 487.04, which provides, for example, taking bodily samples for the purpose of analysis under the forensic DNA analysis regime.

Because the amendments include the possibility of imprisonment, they have the potential to deprive an individual of liberty and so must accord with the principles of fundamental justice.

In reviewing the proposed provisions, the Minister has not identified any potential inconsistencies with the principles of fundamental justice under section 7. The scope of the offences are tailored to the legislative objectives, such as reducing motor vehicle theft by deterring the use of violence in its commission, prohibiting tools used in its commission, and countering the involvement of organized criminals and their ability to launder the proceeds of their crimes. The proposed section 333.2 includes a strong mens rea (guilty mind) element, applying only where the accused has a purpose of committing motor vehicle theft while in possession of an electronic device suitable for its commission, or where the accused, for example, makes, sells, or distributes such a device while knowing it has been or is intended to be used to commit motor vehicle theft, without lawful excuse. Finally, the proposed provisions preserve the discretion of trial judges to impose a fit and appropriate sentence in each case.

The proposed designation of the new offences within the interception of private communications regime and the forensic DNA analysis regime potentially engages the protection against unreasonable search or seizure under section 8 of the Charter.

The following considerations support the consistency of these inclusions with section 8. Existing protections contained in these regimes would continue to apply. This would include the requirement of obtaining judicial authorization before intercepting private communications or to take bodily samples for the purpose of forensic DNA analysis, thus meeting the requirements under section 8 of the Charter for a search or seizure to be reasonable.

Division 38
Immigration and Refugee Protection Act

Division 38 would amend, by re-enacting, paragraph 55(3.1)(b) of the Immigration and Refugee Protection Act, which requires an officer to arrest and detain without warrant, or issue a warrant for the arrest of, foreign nationals whose arrival has, after their arrival in Canada, been designated as an irregular arrival. This amendment would restrict the application of this provision to individuals who have not already been arrested and detained under this provision. Because the existing provision requires the arrest of individuals, it engages the liberty interest protected by section 7 of the Charter and must be consistent with the principles of fundamental justice in order to comply with section 7.

The following considerations support the consistency of this provision with section 7. The Minister has not identified any inconsistencies with the principles of fundamental justice. The provision’s impact on liberty is tailored to the statutory objectives, which include ensuring the examination of individuals who arrive in Canada as part of an irregular arrival. The amendment would restrict the breadth of this provision, as it would only be able to be used once in relation to a given individual.