Bruce McMeekin Law

Corporations Are Not Entitled to the Charter Protection Against Cruel and Unusual Punishment

That is the November 5 finding of the Supreme Court of Canada (SCC) in Quebec (Attorney General) v. 9147-0732 Québec Inc., 2020 SCC 32, on appeal from the Quebec Court of Appeal (QCA).

In March 2019, the QCA concluded that fines levied against corporations could constitute cruel and unusual punishment, attracting for the corporation the protection of s.12 of the Charter of Rights and Freedoms:

Everyone has the right to protection from all cruel and unusual treatment or punishment.

In a split judgement the QCA followed the SCC decision in R. v. Boudreault, 2018 SCC 58, which confirmed (within the context of automatic victim surcharges) that fines levied against individuals can constitute cruel and unusual punishment if grossly disproportionate to what would otherwise be a fit sentence. Two of three justices took Boudreault one step further, finding that, although a corporation is an artificial construct, disproportionate fines levied against it can be cruel in the sense that its business can be destroyed with negative repercussions to the individuals behind it.

At trial, the defendant was convicted of a licensing offence contrary to the provincial Building Act. As a corporate offender, it was subject to the minimum fine of $30,843 prescribed at the time by the legislation. The trial justice rejected the defendant’s submission that, as a corporation, it was entitled to the protection of s.12, and to impose the prescribed minimum would constitute cruel and unusual punishment. On appeal, the Superior Court upheld the trial court’s decision.

Bélanger J.C.A., speaking for the majority, rejected what she described as the main argument that a corporation cannot benefit from the protection of s.12 because it is concerned with the protection of human dignity.  Although that is one concern, she found that s.12 is also engaged in protecting the human condition, meaning harm that is not physical such as stress, worry and depression. In her analysis, the context for the application of s.12 had matured from its historical concerns (corporal punishment and the death penalty), to include the human condition.

She found support in the 2004 expanded application of the Criminal Code to organizations, including both incorporated and un-incorporated entities, arguing that the notion of organization comes very close to the physical person. She also found that disproportionate fines that force businesses into bankruptcy and put their employees out of work do not serve the public interest. In the result, excessively disproportionate fines can be cruel to the corporation and impact the people (shareholders, directors and employees (the “stakeholders”)) behind it.

In dissent, Chamberland J.C.A. was not convinced that s.12 was concerned with anything more than the protection of human dignity, and for a sentence to be grossly disproportionate, it must be excessive to the point of being incompatible with it. As corporations are incapable of suffering an indignity, they are not protected by s.12.

He rejected the corporation’s submission that it could benefit from s.12 if the mandatory minimum fine constituted cruel and unusual punishment to the stakeholders standing behind the corporate entity. Such a finding would be contrary to the fundamental principle of corporate personality.

In the majority and two concurring opinions, the SCC was unanimous in its agreement with the dissenting reasons of Chamberland J.C.A., the majority finding them difficult to improve upon.

Apart from the result, what is interesting in this decision is the split in the Court as to the correct method of constitutional interpretation. The majority, led by Brown and Rowe JJ., was critical of the approach of Abella J. (supported by Karakatsanis and Martin JJ) which they saw as minimizing the primary importance of text in interpretation. While acknowledging that the interpretation of Charter provisions required a purposive analysis, the majority emphasized that “constitutional interpretation, being the interpretation of the text of the Constitution, must first and foremost have reference to, and be constrained by, that text.”  In a separate opinion, Kasirer J. refused to weigh in. This issue is not settled and one would expect it will be revisited when the opportunity arises.