OHSA & Other Regulatory Offences: Do Increased Statutory Maximums Translate Into Higher Fines?
In December 2017, the Ontario legislature increased the maximum fines for offences contrary to the OHSA from $25,000 (individuals) and $500,000 (corporations) to $100,000 and $1.5 million, respectively. With an operative one-year limitation period, the new maximums will increasingly be applicable in OHSA prosecutions. One may think that the effect of the higher maximums will be to increase the fines levied by sentencing courts. But a recent Saskatchewan decision suggests caution in reaching that conclusion.
In HMQ v. Carrier Forest Products Inc. (2018 SKPC 007 (CanLII), aff’d 2019 SKQB 84 (CanLII)), an uncertified millwright, Jonathan Jonasson, was tragically killed while conducting maintenance on a wood-chipping machine that, inexplicably, had not been locked out. The employer had written lock out procedures that all employees, including Mr. Jonasson, were required to read and understand. On two previous occasions, the employer’s spot check procedures recorded that he conducted maintenance on machinery after properly locking it out. Earlier on the accident date, he had conducted maintenance on the same wood-chipping machine after it had been locked out.
In 2014, the Saskatchewan legislature amended the Saskatchewan Employment Act, increasing the maximum fines from $300,000 to $1.5 million applicable in cases where breaches of the OHS regulations made under it caused death or serious injury to an employee. The fines are exclusive of the automatic 40 per cent victim surcharge.
In the contested sentencing hearing before Lane J. following the employer’s plea of guilty to failing to effectively safeguard a dangerous moving part, the Crown sought a fine of $500,000 exclusive of the surcharge. In support, it relied, in part, on R. v. Shercom Industries Inc. (2018 SKPC 3 (CanLII)), a 2018 fatality prosecution in which a corporation smaller than Carrier was fined $300,000, exclusive of the surcharge. In it the sentencing justice found that in increasing the maximum fines, the legislature signalled to the courts that penalties are to be increased to address an unacceptable level of workplace injuries and deaths occurring in Saskatchewan. He found support in R. v. Cotton Felts Ltd. (1982 ONCA 3698 (CanLII), and the court’s reference at page 19 to statutory maximums being one factor determinative of the amount of fines. Implicitly, therefore, he rejected the defendant’s submission that higher fines are intended for large, multinational corporations.
The Crown also argued that the fines levied in cases prior to the increase in statutory maximums, a number of which were before the court, should be considered in light of the amendment.
Lane J. did not explicitly reject the approach taken in Shercom, instead distinguishing it on the basis that a number of aggravating factors therein were not present in the case before him. He took judicial notice that the defendant was the largest employer in the Big River community and that its business had been damaged by the ongoing softwood trade dispute with the United States. He accepted financial evidence filed on consent that established the precarious financial health of the defendant, finding that, although, the primary function of the Court in a sentencing like this is to provide specific and general deterrence, this case before him was unique in that it had the potential to collapse the entire economy in the community. In the result, he imposed a $62,500 fine exclusive of the surcharge.
In its appeal to the Court of Queen’s Bench, the Crown relied on Shercom supporting its submission that the 2014 amended maximums were a signal from the legislature that higher penalties were required. Meschishnick J. rejected this submission. Although increased maximums are certainly a factor to consider when crafting a fit sentence, he found at paragraphs 35 and 36:
When, in a legislative amendment, the minimum sentence is not changed or a range provided but the maximum fine is increased the better conclusion to be drawn is that there was a need to ensure that fines for the largest corporations that are the worst offenders could be large enough to ensure that the fine would not be simply a cost of doing business.
It does not follow that all sentences for infractions after the amendment are to increase which in turn means that sentences for infractions prior to the amendment can be considered on the questions of parity and fitness.
Carrier, as described by Lane. J., is a unique case. But its uniqueness is fact based. Importantly, Meschishnick J. did not restrict or tie the foregoing finding to its facts.
There are two other noteworthy aspects to Carrier. First, the Court of Appeal for Ontario (R. v. Dofasco Inc., 2007 ONCA 769 (CanLII)) has held that employers are strictly liable for employee injury and death arising from the employee’s carelessness. But there is little guidance as to the relevance of employee carelessness in sentencing the employer. In his reasons, Lane J. distinguished Shercom and other cases finding that the defendant’s culpability was at a lower level because Mr. Jonasson’s actions were contrary to his training and company procedures and a contributing factor to the accident. Meschishnick J. did not interfere with this finding, concluding that there was ample evidence to support it.
Second, there is nothing new in the courts considering the size and financial health of corporate defendants when crafting an appropriate disposition. But, in the absence of statutory minimum fines, this case stands out as a rare, strong judicial statement pushing back against substantial maximum fines, which if imposed, may do more public harm than good. In that sense it exhibits some the very concerns that are driving the ongoing SNC-Lavalin debate and caused the Quebec Court of Appeal to recently find that corporations may have recourse against substantial minimums fines on the basis of s.12 of the Charter of Rights and Freedoms (9147-0732 Quebec Inc. c. Directeur des poursuites criminelles et penals, 2019 QCCA 373 (CanLII)).
Carrier is not binding outside of Saskatchewan but is certainly of persuasive authority.