Toronto, ON.—In an unfortunate setback for the Charter rights of Canadians, today the Supreme Court of Canada held section 163.2 of the Income Tax Act (ITA) constitutional. The section, which imposes what are known as administrative monetary penalties (AMPs), allows government to punish citizens without granting them the benefit of being presumed innocent until proven guilty beyond a reasonable doubt at a fair, public hearing, as guaranteed by subsection 11(d) of the Charter of Rights and Freedoms.
“The Supreme Court’s decision is a blow to all Canadians who simply want the right to constitutional safeguards if they are being hit with a potentially life-ruining fine,” said Marni Soupcoff, executive director of the Canadian Constitution Foundation (CCF). The CCF intervened in the case to argue that section 163.2 infringes section 11 of the Charter. “Canadians take it for granted that they will be presumed innocent unless and until their guilt is proven beyond a reasonable doubt before an independent judge, but the Supreme Court of Canada just took that right away in the context of AMPs.”
In 2008, the Minister of National Revenue imposed an AMP of $546,747 on Ottawa lawyer Julie Guindon for making false statements in the context of a charitable donation program. Ms. Guindon argued in Tax Court that this huge penalty was invalid because she had not been given the protections afforded to accused individuals under section 11 of the Charter. The lowest court agreed, but its decision was reversed on appeal, so Ms. Guindon appealed to the Supreme Court of Canada. The CCF obtained leave to intervene on the question of whether section 163.2 infringes section 11 of the Charter. In its submissions to the Supreme Court, the CCF asked that the Court look at the effect of an AMP, and argued that if it’s a big enough fine – for example, more than $10,000 for an individual – then the court should operate under the rebuttable presumption that section 11 rights apply.
Forty-eight AMPs were imposed under section 163.2 of the ITA between 2009 and 2013 and the median fine was $440,000.
According to the Supreme Court, section 163.2 of the ITA does not violate section 11 of the Charter, which states (among other things) that any person charged with an offence has the right “to be presumed innocent until proven guilty according to law [i.e. beyond a reasonable doubt] in a fair and public hearing by an independent and impartial tribunal.” The decision ignores the fact that people need to be shielded from punitive government action by having their rights respected when a significant liberty is at stake and that government can sidestep section 11 of the Charter simply by calling a penalty a deterrent rather than a punishment.
Moreover, “by allowing government to punish citizens without allowing those citizens the protection of section 11, the Supreme Court of Canada’s decision perpetuates the absurd situation that someone charged with a minor traffic infraction is entitled to more legal protection than someone accused of a regulatory violation that carries a $10,000 per day fine,” explained Soupcoff.
“The court’s decision means that Canadians accused of violations carrying huge penalties don’t get the protections guaranteed by the Canadian Charter of Rights and Freedoms,” said Soupcoff. “The government can sidestep section 11 of the Charter merely with the language it chooses. Among other things, this means that individuals hit with AMPS:
“In our submission to the court, we quoted Justice Frankfurter’s observation that ‘the history of liberty has largely been the history of observance of procedural safeguards,’” said Soupcoff. “While today’s decision is a setback, the CCF will continue to fight for Canadians’ section 11 rights. Bureaucrats should not be able to bankrupt a person without giving that person his day in court. When someone is put on the hook for a half a million dollars, it doesn’t matter what you call it; that person should have a right to a fair and public hearing by an independent and impartial tribunal, with guilt having to be established beyond a reasonable doubt.”
- have no right to be informed of their offence without unreasonable delay
- have no right to be tried within a reasonable time
- have no right against self-incrimination
- have no protection against laws that create offences retroactively
- have no protection against double jeopardy (being punished twice for the same offence).”