Penal Offences: a Minimum Fine Deemed Unconstitutional

On July 4, 2017, the Court of Québec rendered a judgment¹ declaring section 197.1 of the Building Act², which stipulates a minimum fine of $10,481 for acting as a building contractor without holding the appropriate licence³.

The Court’s analysis focused on whether a fine of such a magnitude was cruel and unusual for the purposes of section 12 of the Canadian Charter of Rights and Freedoms⁴. This is the first time a court in Quebec has so considered minimum fines, and the Court points out that it had found no decision from a Quebec court or court of appeal declaring that a mandatory minimum fine constituted cruel and unusual punishment⁵.

The applicable test for determining whether a punishment is “cruel and unusual” for the purposes of the Charter

The first step consists of determining, without reference to the stipulated minimum fine, what sanction would be fair and appropriate for the defendant in the prevailing circumstances. Then it must be determined if the mandatory minimum sanction is grossly disproportionate compared to the fair and appropriate sanction⁶. This step calls for the consideration of the following various factors, none of which is determinative in and of itself:

• the seriousness of the offence; 
• the individual characteristics of the offender;
• the specific circumstances of the matter;
• the palpable effect on the offender of the mandatory minimum sanction;
• the penological goals and the principles for determining appropriate penalties;
• whether there are viable alternatives to the prescribed penalty; 
• a comparison with prescribed penalties for similar offences⁷.

The facts

The defendant had recently started a project-management business. In the course of supervising the installation of a shower for a client, the defendant ordered that some changes be made to the installation as initially planned, and he took the initiative to purchase the required materials and lease the necessary equipment. He thereby acted as a building contractor, without holding the appropriate licence.

This is one of the most serious offences under the Building Act⁸. The primary goal of the mandatory minimum fines, which have increased nearly fifteen-fold since 2011, is to “prevent, combat and punish certain fraudulent practices in the construction industry”⁹. In theory, a statutory provision imposing a mandatory minimum fine leaves the Court no discretion to reduce the amount of the fine.

Without trivializing the offence committed by the defendant, the Court considered that an appropriate punishment would be one that censures the defendant’s illegal conduct and has a general dissuasive effect, determined in this case after taking into account the following factors:

• the defendant’s low level of participation in the performance of the work;
• the fact that public safety was not compromised;
• the absence of any harm flowing from the defendant’s actions;
• the negligible value of the contract involved (the price payable under the contract between the defendant and his client was $241.44, $100.00 of which was the defendant’s profit margin);
• the defendant was acting in good faith, notwithstanding the illegality of his actions;
• the defendant took steps to regularize the situation;
• the defendant had no fraudulent intent;   
• the defendant was not working “under the table”;
• the defendant had no criminal or penal record.¹⁰

The Court also noted that the parliamentary debates prior to the adoption of sections 46 and 197.1 of the Act suggest that all those prosecuted pursuant thereto would be contractors working under the table with the intent of defrauding the government¹¹. No distinction is made in the Act between instances of fraud and errors committed in good faith. In the case canvassed here, it is clear that the defendant’s situation does not come within the ambit of the criminal activity sought to be eliminated in the construction industry.

In the Court’s view, the mandatory minimum fine under s. 197.1 of the Act is completely disproportionate and excessive in cases where the behaviour at issue is at the bottom of the seriousness scale¹² and thus contravenes section 12 of the Canadian Charter. The judge substituted a fine of only $50!

Potential challenges inspired by the judgment

This is a groundbreaking decision where mandatory minimum fines under provincial legislation are concerned. This judgment should encourage litigators to evaluate the chances of success of such a constitutional argument. For example, the minimum fines provided for in certain other statutes, such as the Environment Quality Act¹³, have increased considerably over the last few years.

The authors would like to thank Virginie Beauchemin, a student-at-law at Langlois Lawyers, for her assistance in the preparation of this article.