Chatterjee v. Ontario (Attorney General)

Chatterjee v. Ontario (Attorney General)
Collection
Supreme Court Judgments
Date
2009-04-17
Neutral citation
2009 SCC 19
Report
[2009] 1 SCR 624
Case number
32204
Judges
McLachlin, Beverley; Binnie, William Ian Corneil; LeBel, Louis; Deschamps, Marie; Fish, Morris J.; Abella, Rosalie Silberman; Rothstein, Marshall
On appeal from
Ontario
Subjects
Constitutional law
Notes
SCC Case Information: 32204
Decision Content
SUPREME COURT OF CANADA
Citation: Chatterjee v. Ontario (Attorney General),
2009 SCC 19, [2009] 1 S.C.R. 624
Date: 20090417
Docket: 32204
Between:
Robin Chatterjee
Appellant
and
Attorney General of Ontario
Respondent
‑ and ‑
Attorney General of Canada, Attorney General of Quebec,
Attorney General of Nova Scotia, Attorney General of Manitoba,
Attorney General of British Columbia, Attorney General of Saskatchewan,
Attorney General of Alberta, Attorney General of Newfoundland and Labrador,
Criminal Lawyers’ Association (Ontario), Canadian Civil Liberties Association
and British Columbia Civil Liberties Assosiation
Interveners
Coram: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella and Rothstein JJ.
Reasons for Judgment:
(paras. 1 to 55)
Binnie J. (McLachlin C.J. and LeBel, Deschamps, Fish, Abella and Rothstein JJ. concurring)
______________________________
Chatterjee v. Ontario (Attorney General), 2009 SCC 19, [2009] 1 S.C.R. 624
Robin Chatterjee Appellant
v.
Attorney General of Ontario Respondent
and
Attorney General of Canada,
Attorney General of Quebec,
Attorney General of Nova Scotia,
Attorney General of Manitoba,
Attorney General of British Columbia,
Attorney General for Saskatchewan,
Attorney General of Alberta,
Attorney General of Newfoundland and Labrador,
Criminal Lawyers’ Association (Ontario),
Canadian Civil Liberties Association and
British Columbia Civil Liberties Association Interveners
Indexed as: Chatterjee v. Ontario (Attorney General)
Neutral citation: 2009 SCC 19.
File No.: 32204.
2008: November 12; 2009: April 17.
Present: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella and Rothstein JJ.
on appeal from the court of appeal for ontario
Constitutional law — Division of powers — Property and civil rights — Criminal law — Provincial law providing for forfeiture of proceeds of unlawful activity — Whether provincial law in pith and substance criminal law and ultra vires province — Whether provincial law inoperative by reason of operational conflict with forfeiture or sentencing provisions of Criminal Code — Constitution Act, 1867, ss. 91(27) , 92(13) — Remedies for Organized Crime and Other Unlawful Activities Act, 2001, S.O. 2001, c. 28, ss. 1, 2, 3, 6 — Criminal Code, R.S.C. 1985, c. C‑46, s. 462.37 .
The police arrested C for breach of probation and, in a search of his car incidental to the arrest, discovered cash and items that not only were associated with the illicit drug trade but also smelled of marijuana but found no drugs. C was never charged with any offence in relation to the money, items, or with any drug related activity. The Attorney General of Ontario was granted an order under the Civil Remedies Act, 2001 (“CRA”) preserving the seized money and equipment. He then applied under ss. 3 and 8 of the CRA for forfeiture of the seized money as proceeds of unlawful activity. In response, C challenged the CRA’s constitutionality, arguing that the CRA’s forfeiture provisions were ultra vires the province because they encroach on the federal criminal law power. Both the applications judge and the Court of Appeal concluded that the CRA is a valid provincial legislation.
Held: The appeal should be dismissed. The CRA’s forfeiture provisions are constitutional.
The argument that the CRA is ultra vires is based on an exaggerated view of the immunity of federal jurisdiction in relation to matters of criminal law that may, in another aspect, be the subject of provincial legislation. Resort to a federalist concept of proliferating jurisdictional enclaves (or “interjurisdictional immunities”) was recently discouraged by this Court’s decisions in Canadian Western Bank v. Alberta and British Columbia (Attorney General) v. Lafarge Canada Inc. and should not now be given a new lease on life. A court should favour, where possible, the ordinary operation of statutes enacted by both levels of government. [2]
The evident purposes of the CRA are to make crime in general unprofitable, to capture resources tainted by crime so as to make them unavailable to fund future crime and to help compensate private individuals and public institutions for the costs of past crime. The practical (and intended) effect is to take the profit out of crime and to deter its present and would‑be perpetrators. These are valid provincial objects. Crime creates costs to victims and to the public that would otherwise fall on the provincial treasury including health, policing resources, community stability and family welfare. It would be out of step with modern realities to conclude that a province must shoulder the costs to the community of criminal behaviour but cannot take legislative steps to suppress it. [3‑4] [18] [23]
Where there is a degree of overlap between measures enacted pursuant to the provincial power and measures taken pursuant to the federal power, it is necessary to identify the “dominant feature” of an impugned measure. If the dominant feature of the provincial enactment is in relation to provincial objects, as it is here, the law will be valid, and if the enactments of both levels of government can generally function without operational conflict they will be permitted to do so. In factual situations where operational conflict does occur, the conflict will be resolved by the doctrine of federal paramountcy. [29] [36]
The CRA is an enactment “in relation to” property and civil rights, and as such its provisions may incidentally “affect” criminal law and procedure without doing violence to the division of powers. The fact the CRA aims to deter federal offences as well as provincial offences and indeed offences committed outside Canada, is not fatal to its validity. On the contrary, the very generality of the CRA shows that the province is concerned about the effects of crime as a generic source of social ill and provincial expense, and not with supplementing federal criminal law as part of the sentencing process. While it is true that forfeiture may have de facto punitive effects in some cases, the CRA does not require an allegation or proof that any particular person committed any particular crime. Property may be forfeited under the CRA if, on a balance of probabilities, it is demonstrated that the property constituted the proceeds of crime in general without further specificity. [4] [30] [41] [46‑47]
C argues that the provisions of the CRA introduce an interference with the administration of the Criminal Code forfeiture provisions. If such operational interference were demonstrated, or if it were shown that the CRA frustrated the federal purpose underlying the forfeiture provisions of the Criminal Code , the doctrine of federal paramountcy would render inoperative the CRA to the extent of the conflict or interference. However, this is not the case. Where forfeiture is sought and refused in the criminal process, the various doctrines of res judicata, the issue estoppel and abuse of process are available to prevent the Crown from re‑litigating the sentencing issue. Given the flexibility of these remedies there is no necessary operational conflict between the Criminal Code and the CRA such as to render the latter inoperative in relation to federal offences generally. If in particular circumstances there arises a conflict between the forfeiture provisions of the Criminal Code and the CRA then to the extent that dual compliance is impossible the doctrine of paramountcy would render the CRA inoperable to the extent of that conflict, but only to that extent. [42] [49-53]
Cases Cited
Applied: Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3; British Columbia (Attorney General) v. Lafarge Canada Inc., 2007 SCC 23, [2007] 2 S.C.R. 86; distinguished: Johnson v. Attorney General of Alberta, [1954] S.C.R. 127; considered: Bédard v. Dawson, [1923] S.C.R. 681; Switzman v. Elbling, [1957] S.C.R. 285; Attorney General for Canada and Dupond v. City of Montreal, [1978] 2 S.C.R. 770; Industrial Acceptance Corp. v. The Queen, [1953] 2 S.C.R. 273; R. v. Zelensky, [1978] 2 S.C.R. 940 rev’g in part (1976), 73 D.L.R. (3d) 596; referred to: Reference re Firearms Act (Can.), 2000 SCC 31, [2000] 1 S.C.R. 783; Starr v. Houlden, [1990] 1 S.C.R. 1366; Scowby v. Glendinning, [1986] 2 S.C.R. 226; R. v. Morgentaler, [1993] 3 S.C.R. 463; Reference re Adoption Act, [1938] S.C.R. 398; Di Iorio v. Warden of the Montreal Jail, [1978] 1 S.C.R. 152; Martineau v. M.N.R., 2004 SCC 81, [2004] 3 S.C.R. 737; General Motors of Canada Ltd. v. City National Leasing, [1989] 1 S.C.R. 641; Reference re Validity of the Combines Investigation Act and of s. 498 of the Criminal Code, [1929] S.C.R. 409; Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161; Rio Hotel Ltd. v. New Brunswick (Liquor Licensing Board), [1987] 2 S.C.R. 59; M & D Farm Ltd. v. Manitoba Agricultural Credit Corp., [1999] 2 S.C.R. 961; Provincial Secretary of Prince Edward Island v. Egan, [1941] S.C.R. 396; Ross v. Registrar of Motor Vehicles, [1975] 1 S.C.R. 5; Ontario (Attorney General) v. Cole‑Watson, [2007] O.J. No. 1742 (QL); Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77.
Statutes and Regulations Cited
Canadian Charter of Rights and Freedoms .
Constitution Act, 1867, ss. 91(27) , 92(13) , (14) , (15) , (16) , 93 , 94A , 95 .
Criminal Code, R.S.C. 1985, c. C‑46, ss. 11 , 462.37 , Part XII.2.
Remedies for Organized Crime and Other Unlawful Activities Act, 2001, S.O. 2001, c. 28 (now Civil Remedies Act, 2001), ss. 1, 2 “legitimate owner”, “proceeds of unlawful activity”, “property”, “unlawful activity”, 3, 4, 6, 8, 9, 15.5, 15.6.
Authors Cited
Gallant, Michelle. “Ontario (Attorney General) v. $29,020 in Canadian Currency: A Comment on Proceeds of Crime and Provincial Forfeiture Laws” (2006), 52 Crim. L.Q. 64.
Ontario. Ministry of the Attorney General. Civil Forfeiture in Ontario 2007: An Update on the Civil Remedies Act, 2001, 2007.
APPEAL from a judgment of the Ontario Court of Appeal (Labrosse, Sharpe and Rouleau JJ.A.), 2007 ONCA 406, 86 O.R. (3d) 168, 282 D.L.R. (4th) 298, 225 O.A.C. 40, 221 C.C.C. (3d) 350, 156 C.R.R. (2d) 94, [2007] O.J. No. 2102 (QL), 2007 CarswellOnt 3290, upholding a decision by Loukidelis J. (2005), 138 C.R.R. (2d) 1, [2005] O.J. No. 2820 (QL) (both sub nom. Ontario (Attorney General) v. $29,020 in Canada Currency), 2005 CarswellOnt 3008. Appeal dismissed.
Richard Macklin and James F. Diamond, for the appellant.
Robin K. Basu and James McKeachie, for the respondent.
Cheryl J. Tobias and Ginette Gobeil, for the intervener the Attorney General of Canada.
Jean‑Vincent Lacroix, for the intervener the Attorney General of Quebec.
Written submissions only by Edward A. Gores, Q.C., for the intervener the Attorney General of Nova Scotia.
Michael Conner, for the intervener the Attorney General of Manitoba.
J. Gareth Morley and Bryant A. Mackey, for the intervener the Attorney General of British Columbia.
Graeme G. Mitchell, Q.C., for the intervener the Attorney General for Saskatchewan.
Roderick Wiltshire and Donald Padget, for the intervener the Attorney General of Alberta.
Thomas G. Mills, for the intervener the Attorney General of Newfoundland and Labrador.
Paul Burstein and Louis P. Strezos, for the intervener the Criminal Lawyers’ Association (Ontario).
Bradley E. Berg and Allison A. Thornton, for the intervener the Canadian Civil Liberties Association.
David G. Butcher and Anthony D. Price, for the intervener the British Columbia Civil Liberties Association.
The judgment of the Court was delivered by
[1] Binnie J. — The question raised on this appeal is whether the Ontario Remedies for Organized Crime and Other Unlawful Activities Act, 2001, S.O. 2001, c. 28 (otherwise known as Civil Remedies Act, 2001 or CRA), which authorizes the forfeiture of proceeds of unlawful activity, is ultra vires Ontario because it encroaches on the federal criminal law power. In my view, the CRA is valid provincial legislation.
[2] The argument that the CRA is ultra vires is based in this case on an exaggerated view of the immunity of federal jurisdiction in relation to matters that may, in another aspect, be the subject of provincial legislation. Resort to a federalist concept of proliferating jurisdictional enclaves (or “interjurisdictional immunities”) was discouraged by this Court’s decisions in Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3, and British Columbia (Attorney General) v. Lafarge Canada Inc., 2007 SCC 23, [2007] 2 S.C.R. 86, and should not now be given a new lease on life. As stated in Canadian Western Bank, “a court should favour, where possible, the ordinary operation of statutes enacted by both levels of government” (para. 37 (emphasis in original)).
[3] The present appeal provides an opportunity to apply the principles of federalism affirmed in those recent cases. The CRA was enacted to deter crime and to compensate its victims. The former purpose is broad enough that both the federal government (in relation to criminal law) and the provincial governments (in relation to property and civil rights) can validly pursue it. The latter purpose falls squarely within provincial competence. Crime imposes substantial costs on provincial treasuries. Those costs impact many provincial interests, including health, policing resources, community stability and family welfare. It would be out of step with modern realities to conclude that a province must shoulder the costs to the community of criminal behaviour but cannot use deterrence to suppress it.
[4] Moreover, the CRA method of attack on crime is to authorize in rem forfeiture of its proceeds and differs from both the traditional criminal law which ordinarily couples a prohibition with a penalty (see Reference re Firearms Act (Can.), 2000 SCC 31, [2000] 1 S.C.R. 783) and criminal procedure which in general refers to the means by which an allegation of a particular criminal offence is proven against a particular offender. The appellant’s answer, however, is that the effect of the CRA in rem remedy just adds to the penalties available in the criminal process, and as such the CRA invalidly interferes with the sentencing regime established by Parliament. It is true that forfeiture may have de facto punitive effects in some cases, but its dominant purpose is to make crime in general unprofitable, to capture resources tainted by crime so as to make them unavailable to fund future crime and to help compensate private individuals and public institutions for the costs of past crime. These are valid provincial objects. There is no operational conflict between the forfeiture provisions of the Criminal Code, R.S.C. 1985, c. C-46 , and the CRA. It cannot reasonably be said that the CRA amounts to colourable criminal legislation. Accordingly, I would dismiss the appeal.
I. Facts
[5] The appellant was stopped by York Regional Police on March 27, 2003, because his car had no front licence plate. A computer search showed the police that he was in breach of his recognizance, which required him to reside in Ottawa, some 400 kilometres away. When the appellant acknowledged that he was then living in Thornhill, just north of Toronto, the officers arrested him and, incidental to the arrest, searched his car. They discovered $29,020 in cash, as well as an exhaust fan, a light ballast and a light socket. According to police, all of these items smelled of marijuana, although no marijuana was found.
[6] The appellant was never charged with any offence in relation to the money, items, or any drug related activity. However, on May 13, 2003, the Attorney General of Ontario brought an interlocutory motion under ss. 4 and 9 of the CRA to preserve the seized money and equipment. A preservation order was granted.
[7] On May 16, 2003, the Attorney General brought an application under ss. 3 and 8 of the CRA for forfeiture of the seized money as proceeds of unlawful activity and of the items as instruments of unlawful activity. In response, the appellant challenged the CRA’s constitutionality: that challenge eventually led to this appeal.
II. Relevant Statutory Provisions
[8] Remedies for Organized Crime and Other Unlawful Activities Act, 2001, S.O. 2001, c. 28 (now Civil Remedies Act, 2001)
PART I
PURPOSE
Purpose
1. The purpose of this Act is to provide civil remedies that will assist in,
(a) compensating persons who suffer pecuniary or non‑pecuniary losses as a result of unlawful activities;
(b) preventing persons who engage in unlawful activities and others from keeping property that was acquired as a result of unlawful activities;
(c) preventing property, including vehicles as defined in Part III.1, from being used to engage in certain unlawful activities [added S.O. 2007, c. 13, s. 26]; and
(d) preventing injury to the public that may result from conspiracies to engage in unlawful activities.
PART II
PROCEEDS OF UNLAWFUL ACTIVITY
Definitions
2. In this Part,
. . .
“legitimate owner” means, with respect to property that is proceeds of unlawful activity, a person who did not, directly or indirectly, acquire the property as a result of unlawful activity committed by the person, and who,
(a) was the rightful owner of the property before the unlawful activity occurred and was deprived of possession or control of the property by means of the unlawful activity,
(b) acquired the property for fair value after the unlawful activity occurred and did not know and could not reasonably have known at the time of the acquisition that the property was proceeds of unlawful activity, or
(c) acquired the property from a person mentioned in clause (a) or (b);
“proceeds of unlawful activity” means property acquired, directly or indirectly, in whole or in part, as a result of unlawful activity, whether the property was acquired before or after this Act came into force, but does not include proceeds of a contract for recounting crime within the meaning of the Prohibiting Profiting from Recounting Crimes Act, 2002;
“property” means real or personal property, and includes any interest in property;
“unlawful activity” means an act or omission that,
(a) is an offence under an Act of Canada, Ontario or another province or territory of Canada, or
(b) is an offence under an Act of a jurisdiction outside Canada, if a similar act or omission would be an offence under an Act of Canada or Ontario if it were committed in Ontario,
whether the act or omission occurred before or after this Part came into force.
Forfeiture order
3. (1) In a proceeding commenced by the Attorney General, the Superior Court of Justice shall, subject to subsection (3) and except where it would clearly not be in the interests of justice, make an order forfeiting property that is in Ontario to the Crown in right of Ontario if the court finds that the property is proceeds of unlawful activity.
. . .
Legitimate owners
(3) If the court finds that property is proceeds of unlawful activity and a party to the proceeding proves that he, she or it is a legitimate owner of the property, the court, except where it would clearly not be in the interests of justice, shall make such order as it considers necessary to protect the legitimate owner’s interest in the property.
. . .
Special purpose account
6. . . .
Other payments out of account
(3) Subject to the regulations made under this Act and after making the payments, if any, out of the account under subsection (2.1) [regarding payments for the Crown’s costs], the Minister of Finance may make payments out of the account described in subsection (1) for the following purposes:
1. To compensate persons who suffered pecuniary or non‑pecuniary losses, including losses recoverable under Part V of the Family Law Act, as a result of the unlawful activity.
2. To assist victims of unlawful activities or to prevent unlawful activities that result in victimization.
3. To compensate the Crown in right of Ontario for pecuniary losses suffered as a result of the unlawful activity, other than the costs described in subsection (2.1), but including costs incurred in remedying the effects of the unlawful activity.
4. To compensate a municipal corporation or a public body that belongs to a class prescribed by the regulations made under this Act for pecuniary losses that were suffered as a result of the unlawful activity and that are costs incurred in remedying the effects of the unlawful activity.
5. If, according to the criteria prescribed by the regulations made under this Act, the amount of money in the account is more than is required for the purposes referred to in paragraphs 1 to 4, such other purposes as are prescribed by the regulations.
Criminal Code, R.S.C. 1985, c. C-46
Forfeiture of Proceeds of Crime
462.37 (1) [Order of forfeiture of property on conviction] Subject to this section and sections 462.39 to 462.41, where an offender is convicted, or discharged under section 730, of a designated offence and the court imposing sentence on the offender, on application of the Attorney General, is satisfied, on a balance of probabilities, that any property is proceeds of crime and that the designated offence was committed in relation to that property, the court shall order that the property be forfeited to Her Majesty to be disposed of as the Attorney General directs or otherwise dealt with in accordance with the law.
(2) [Proceeds of crime derived from other offences] Where the evidence does not establish to the satisfaction of the court that the designated offence of which the offender is convicted, or discharged under section 730, was committed in relation to property in respect of which an order of forfeiture would otherwise be made under subsection (1) but the court is satisfied, beyond a reasonable doubt, that that property is proceeds of crime, the court may make an order of forfeiture under subsection (1) in relation to that property.
. . .
(2.1) [Property outside Canada] An order may be issued under this section in respect of property situated outside Canada, with any modifications that the circumstances require.
Constitution Act, 1867
91. . . . [T]he exclusive Legislative Authority of the Parliament of Canada extends to all Matters coming within the Classes of Subjects next herein-after enumerated; that is to say, —
. . .
27. The Criminal Law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters.
. . .
92. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next herein-after enumerated; that is to say, —
. . .
13. Property and Civil Rights in the Province.
14. The Administration of Justice in the Province, including the Constitution, Maintenance, and Organization of Provincial Courts, both of Civil and of Criminal Jurisdiction, and including Procedure in Civil Matters in those Courts.
15. The Imposition of Punishment by Fine, Penalty, or Imprisonment for enforcing any Law of the Province made in relation to any Matter coming within any of the Classes of Subjects enumerated in this Section.
16. Generally all Matters of a merely local or private Nature in the Province.
III. Judicial History
A. Superior Court of Justice (2005), 138 C.R.R. (2d) 1
[9] The application judge declined to permit the appellant to challenge Part III of the CRA dealing with instruments of crime because, although some of the seized items were alleged to be instruments of crime, Mr. Chatterjee disclaimed ownership of them. Loukidelis J. also rejected a challenge under the Canadian Charter of Rights and Freedoms . Neither issue is pursued in this Court.
[10] Loukidelis J. concluded that the CRA had two purposes, namely, compensating the victims of unlawful activities and suppressing the conditions that lead to unlawful activities by removing incentives. The in rem nature of CRA proceedings distinguished them from criminal proceedings. The CRA does not create any criminal prohibitions, it simply refers to prohibitions created by other legislation. Further, he rejected the argument of a conflict between the CRA and the Criminal Code forfeiture provisions. The latter require a conviction and are part of the sentencing process. In his view, it would be ultra vires the federal Parliament to enact a forfeiture regime not tied to conviction and sentencing. Accordingly, the CRA relates almost entirely to property and civil rights in the province. To the extent that any of the impugned provisions fall outside the heading of property and civil rights, they fall under the administration of justice in the province, or are matters of local or private concern. The CRA, in his view, was accordingly intra vires and valid.
B. Court of Appeal (Labrosse, Sharpe and Rouleau JJ.A.), 2007 ONCA 406, 86 O.R. (3d) 168
[11] In joint reasons the court upheld the judgment below including the exercise of the applications judge’s discretion not to deal with Part III of the CRA (“instruments of unlawful activity”). The court noted that civil forfeiture schemes appear in several Canadian provinces as well as foreign states. Such schemes often co-exist with conviction-based forfeiture regimes within the criminal law. CRA proceedings do not involve an allegation that a named individual has committed an offence. The CRA does not define or create any offence. It is not tied to the identification, charging, prosecution, conviction, or punishment of an offender. It does not seek to impose a penalty, fine, or other punishment, and does not provide for imprisonment.
[12] In the court’s view, the pith and substance of the CRA is to require the disgorgement of financial gains from unlawful activity, to compensate victims, and to suppress conditions leading to unlawful activity by removing financial incentives. The CRA therefore falls within the province’s power to legislate in relation to property and civil rights in the province and matters of a merely local or private nature in the province. Provincial civil remedies for criminal offences do not conflict with the Criminal Code , because Parliament expressly preserved such remedies in s. 11 of the Criminal Code . Further, suppression of conditions likely to favour the commission of crimes falls within provincial competence.
[13] The subject of forfeiture of the proceeds of crime has both a federal criminal aspect and a provincial aspect. The CRA approaches that subject from an area of valid provincial competence — disgorgement of wrongful gains, compensation and crime suppression. The CRA is valid provincial legislation. The appeal was therefore dismissed.
IV. Issue
[14] The Chief Justice stated the following constitutional question:
Are ss. 1 to 6 and ss. 16 to 17 of the Remedies for Organized Crime and Other Unlawful Activities Act, 2001, S.O. 2001, c. 28, ultra vires the Province of Ontario on the ground that they relate to a subject matter which is within the exclusive jurisdiction of the Parliament of Canada under s. 91(27) of the Constitution Act, 1867 ?
On the hearing of the appeal the appellant narrowed his challenge to argue that the CRA is ultra vires to the extent it provides for forfeiture of the proceeds of federal offences because to that extent the CRA is in pith and substance criminal law.
V. Analysis
[15] Crime imposes significant costs at every level of government: federal, provincial and municipal. Impaired driving is a Criminal Code offence but carnage on the roads touches numerous matters within provincial jurisdiction including health, highways, automobile insurance and property damage. The cost associated with drug abuse is another example. Each level of government bears a portion of the costs of criminality and each level of government therefore has an interest in its suppression. The appellant’s argument is, however, that the CRA adopts a method of fighting crime and compensating its victims that is not constitutionally permissible in relation to federal offences. The forfeiture of property tainted by crime in relation to federal offences, he says, “encroaches directly on the federal government’s exclusive jurisdiction over criminal law and is ultra vires” (A.F., at para. 4). It is apparent that provincial objectives can become so entangled in the enforcement of criminal law as to be declared ultra vires. In Starr v. Houlden, [1990] 1 S.C.R. 1366 (the Patti Starr Inquiry), for example, it was held that provincial terms of reference for a judicial inquiry into a provincial fundraising scandal were ultra vires as constituting a substitute police investigation and preliminary inquiry in which the targets were made compellable witnesses. See also Scowby v. Glendinning, [1986] 2 S.C.R. 226. The appellant’s contention that the CRA is an invalid attempt to increase the penalty for federal offences therefore requires careful scrutiny.
A. Determination of the Pith and Substance
[16] The first step in a constitutional challenge is to determine “the matter” (to track the language of the Constitution Act, 1867 ) in relation to which the impugned law is enacted. What is the essence of what the law does and how does it do it? “[T]wo aspects of the law must be examined: the purpose of the enacting body, and the legal effect of the law” (Reference re Firearms Act, at para. 16). This exercise is traditionally known as determining the law’s “pith and substance”. It may include not only the impugned Act but also external material surrounding its passage, including Hansard. In principle this assessment should be made without regard to the head(s) of legislative competence, which are to be looked at only once the “pith and substance” of the impugned law is determined. Unless the two steps are kept distinct there is a danger that the whole exercise will become blurred and overly oriented towards results.
[17] As its name suggests, the Civil Remedies Act, 2001, enacts civil remedies in relation to property tainted by crime. Its purpose, as stated in s. 1:
The purpose of this Act is to provide civil remedies that will assist in,
(a) compensating persons who suffer pecuniary or non-pecuniary losses as a result of unlawful activities;
(b) preventing persons who engage in unlawful activities and others from keeping property that was acquired as a result of unlawful activities;
(c) preventing property, including vehicles as defined in Part III.1, from being used to engage in certain unlawful activities [added in 2007, c. 13, s. 26]; and
(d) preventing injury to the public that may result from conspiracies to engage in unlawful activities.
While the Court is not bound by a purpose clause when considering the constitutional validity of an enactment, a statement of legislative intent is often a useful tool, particularly where it is apparent, as in this case, that the machinery created by the CRA corresponds to what is required to achieve the stated purposes. Purposes (a) and (b) contemplate the re-distribution of property tainted by crime. (Purpose (c) relates to the instruments of crime and is not before us.) Purpose (d) is directed to the prevention of crime-related injuries. It is suggested that the reference to “conspiracies” in (d) indicates a focus on combatting organized crime, and the appellant cites some extracts from Hansard to that effect. This, he says, entangles the CRA in criminal law. However, the province has good reason to deter organized crime, provided it stays within areas of provincial competence. There is nothing in the provisions of the CRA that are before us on this appeal that go beyond the redistribution of property tainted by crime, including federal crimes of all descriptions.
[18] The internal evidence of purpose thus suggests a credible intent to recover from the proceeds of crime found in Ontario the costs to victims and to the public of criminality that would otherwise fall on the provincial treasury. Forfeiture is the transfer of property from the owner to the Crown. Forfeiture does not result in the conviction of anybody for any offence. On its face, therefore, the CRA targets property rights.
[19] In terms of the effects of the CRA, the Court in determining its pith and substance will look at “how the legislation as a whole affects the rights and liabilities of those subject to its terms” (R. v. Morgentaler, [1993] 3 S.C.R. 463, at p. 482). When appropriate, as well, a reviewing court will look beyond the legal effect — beyond the statute’s “four corners” — to examine “the actual or predicted practical effect of the legislation in operation” (Morgentaler, at p. 483). The record shows that as of August 2007 approximately $3.6 million in property has been ordered forfeited under the CRA of which approximately $1 million had been paid out to direct victims, $900,000 had been paid in grants to various bodies on victims’ issues, including the Peel Police Internet Child Exploitation Unit, leaving $1.7 million in special CRA accounts. Forfeited property included approximately $500,000 in property involved in marijuana grow operations, a Hamilton crack house (the ownership of which was then transferred to the City), vehicles involved in street racing contrary to the Highway Traffic Act, R.S.O. 1990, c. H.8, and approximately $1 million in cash involved in fraud or money laundering: Civil Forfeiture in Ontario 2007: An Update on the Civil Remedies Act, 2001 (2007).
[20] Criminal “taint” of property has many sources. Section 2 of the CRA defines “unlawful activity” as “an act or omission that . . . is an offence under an Act of Canada, Ontario or another province or territory”. The definition also extends to offences in jurisdictions outside Canada provided the conduct there would be an offence if committed in Ontario. It is significant that the CRA throws its “crime” net so widely. There is no singling out of offences in any particular jurisdiction, including federal offences in Canada. This suggests the province was concerned with the deleterious effects of crime in general rather than attempting in a colourable way to tack a penalty onto the federal criminal sentencing process.
[21] Proceeds of crime are defined as “property acquired, directly or indirectly, in whole or in part, as a result of unlawful activity” (s. 2). The forfeiture proceedings are initiated by an application or action under the ordinary civil rules of the province. Proceedings are taken in rem against the property itself and can be initiated without joining the owners or possessors as defendants (who of course may be added as parties at a later date — see now ss. 15.5 and 15.6). The Attorney General as applicant is not required to prove any particular offence against any particular offender. Initially these proceedings were styled Attorney General of Ontario v. $29,020 in Canada Currency, Exhaust Fan, Light Ballast, Light Socket (in Rem) and Robin Chatterjee, but Mr. Chatterjee was before the court as a property claimant, not as an accused.
[22] The rest of the statutory machinery may be briefly described. Forfeiture “shall” be ordered unless it is not in the interest of justice to do so or a legitimate owner comes forward (s. 3(3)). Legitimate owners may bring any claims to the property within a 15-year limitation period (s. 3(5)). The proceeds of the forfeiture are deposited into a separate provincial revenue account (s. 6(1)), out of which a court may order Crown’s costs to be paid (s. 6(2.1)). The money left in the account may be directed to compensate persons who have suffered losses as a result of the unlawful activity, victims of general unlawful activity, the Crown in right of Ontario, municipal corporations or other public bodies in respect of their losses flowing from the unlawful activity or (if there is money left over) for such other purpose as may be prescribed by regulation (s. 6(3)).
[23] In essence, therefore, the CRA creates a property-based authority to seize money and other things shown on a balance of probabilities to be tainted by crime and thereafter to allocate the proceeds to compensating victims of and remedying the societal effects of criminality. The practical (and intended) effect is also to take the profit out of crime and to deter its present and would-be perpetrators.
B. Assignment to Heads of Legislative Power
[24] Once the “pith and substance” is ascertained, it is necessary to classify that essential character of the law by reference to the provincial and federal “classes of subjects” listed in ss. 91 and 92 (or, in an appropriate case, ss. 93 , 94A and 95 ) to determine if the law comes within the jurisdiction of the enacting legislature. Clearly, the CRA relates to property but, of course, much of the Criminal Code is dedicated to offences involving property. To characterize a provincial law as being in pith and substance related to property is therefore just a starting point. A good deal of overlap in measures taken to suppress crime is inevitable:
Moreover, while, as subject matter of legislation, the criminal law is entrusted to the Dominion Parliament, responsibility for the administration of justice and, broadly speaking, for the policing of the country, the execution of the criminal law, the suppression of crime and disorder, has from the beginning of Confederation been recognized as the responsibility of the provinces . . . . [Emphasis added.]
(Reference re Adoption Act, [1938] S.C.R. 398, at p. 403 (per Duff C.J.). See also Di Iorio v. Warden of the Montreal Jail, [1978] 1 S.C.R. 152, at pp. 207 and 213 (per Dickson J.).)
C. The Provincial Aspect
[25] As stated, the CRA fits neatly into the provincial competence in relation to Property and Civil Rights in the Province (Constitution Act, 1867, s. 92(13) ) or Matters of a merely local or private Nature in the Province (s. 92(16)). The Attorneys General rely on Martineau v. M.N.R., 2004 SCC 81, [2004] 3 S.C.R. 737, for the proposition that “civil mechanisms include the seizure as forfeit of goods and conveyances” (para. 27).
[26] Our jurisprudence offers many examples of the interplay between provincial legislative jurisdiction over property and civil rights and federal legislative jurisdiction over criminal law and procedure. In Bédard v. Dawson, [1923] S.C.R. 681, for example, the Court upheld the validity of a provincial law that authorized a judge to close a “disorderly hous[e]” for up to one year. The Court held that the law was directed to the enjoyment of property rights not criminal law. Duff J. (later C.J.C.) held that “[t]he legislation impugned seems to be aimed at suppressing conditions calculated to favour the development of crime rather than at the punishment of crime” (p. 684). Idington J., in words relevant to the disposition of the present appeal, said that:
As to the argument addressed to us that the local legislatures cannot legislate to prevent crime, I cannot assent thereto for in a very wide sense it is the duty of the legislature to do the utmost it can within its power to anticipate and remove, so far as practicable, whatever is likely to tend to produce crime; . . . [Emphasis added; p. 684.]
[27] In Switzman v. Elbling, [1957] S.C.R. 285, this Court struck down a Quebec law providing for the closure of houses in which socialism or bolshevism were said to be propagated (known popularly as the “Padlock law”). Kerwin C.J. and Nolan and Cartwright JJ. distinguished Bédard. Unlike in Bédard, the impugned statute in Switzman was only superficially concerned with the control and enjoyment of property; in their view its dominant purpose was to criminalize and punish the propagation of communism. By contrast, the CRA does no