The latest version of C-52 and C-6. The re-introduced Canada Consumer Product Safety Act’. It contains the same language and the same unconstitutional principles. It addresses a problem which does not exist, the safety of consumer products has always been adequately covered by existing laws. However now it has passed it sets a precedent which will be difficult to oppose for a reintroduced version of C-51.
Draft Discussion Paper on Bill C-36
Prepared by Shawn Buckley, president of the Natural Health Products Protection Associationon June 15, 2010.
CLICK HERE TO DOWNLOAD THE PAPER IN PRINTABLE PDF FORM
TABLE OF CONTENTS:
- Summary of Points Discussed In This Paper
- Importance of the Rule of Law
- Relevance to the Natural Health Community
- Real example of how Bill C-36 will enable Health Canada to totally destroy a business
- The property and Privacy Rights Affected by the Bill are Broad in Scope
- Context for the New Law – is it necessary to take away freedoms to protect us?
- The Hazardous Products Act
- The Criminal Code Criminal Negligence Provisions
- Civil Penalties
- The Abolition of the Law of Trespass
- The Right to Seize Property Without a Court Order, Without Reporting the Seizure to a Court, and for an Indefinite Period
- The Private Home Problem
- The State can Assume Control over the Movement of Private Property without a Court Order and Without a Safety Concern
- The State can Assume Control of Private Property, Including Land, Without a Court Order and Without a Safety Concern
- The Move Away from the “Significant Risk” Test
- The abolition of the Independent Review Board
- Are the Powers to take Control of Businesses and to Seize Private Property for Alleged Contraventions Legal?
- The Creation of Administrative Offences
- Is there a Conflict of Interest: property and administrative fines
- Either the Minister has to find you guilty of an administrative offence or the Bill is poorly drafted
- We are Responsible for the Costs of Seizures and
Detentions Regardless of Whether the Seizures or Detentions were Justified
- Additional Costs and Responsibilities for Small Businesses
- Are many Consumer Products Banned?
- Orders to Test, Research and provide Documents without any indication of risk
- The 6 year Document Burden
- The Reporting to the Minister Burden
- The disclosure of confidential business information
- Retailers and distributors become responsible for ensuring instructions and
labeling are sufficient
- The Corporate shield is removed and Directors and Officers are liable for Company Offences
- Subjecting Directors, Officers and Managers to multi-million dollar fines and imprisonment without the right to cross-examine the accusers
- Officers, directors, managers and employees could be very surprised with debts owing to Health Canada years after they have left the company
- Allowing Trade Agreements to become law without Parliamentary review
- The Gross Encroachment into Provincial Jurisdiction
- Secrecy: hidden orders exempted from the Statutory Instruments Act
- Assessing the Act without the regulations – what will the burden and costs really be?
- The difficulty with “safety”
On June 9, 2010, Bill C-36 was introduced for first reading in the House of Commons.
A copy of the Bill can be found at:
Bill C-36 is almost identical to Bill C-52 which had been introduced into the 39th Parliament on April 8, 2008, and to Bill C-6 which had been introduced into the 40th Parliament on January 29, 2009.
Summary of Points Discussed In This Paper
- The rule of law is the fundamental underpinning of a free society. Sacrificing the rule of law always leads to tyranny and loss of freedom.
- The Bill represents an unprecedented change in the powers of the state vis-à-vis the citizen. The rule of law and private property rights are all but extinguished in the area of consumer products.
- Although not applicable to natural health products, the Bill still poses a threat. The Bill gives Health Canada inspectors the very powers that concerned citizens in Bill C-51.
- Bill C-36 is being promoted as necessary to protect our families. However, under the existing law the State can already:
- ban or restrict any consumer product under threat of million dollar fines and two year jail sentences under the Hazardous Products Act;
- make immediate orders banning or restricting any consumer product if there is a significant risk to health or safety. In addition to fines and imprisonment for non-compliance, the State can apply to the Court for an injunction which brings police enforcement of the order;
- obtain a search warrant and seize non-compliant products, and
- prosecute for criminal negligence or homicide under the Criminal Code. In some cases this can result in penalties of life imprisonment.
- The real change brought about by Bill C-36 is not that it protects consumers, as the current law already grants the State significant powers to protect safety. Rather the real change is the abolition of procedural safeguards citizens currently enjoy.
- Bill C-36 abolishes the law of trespass thus allowing the State access onto private property without any legal recourse.
- Bill C-36 for the first time in Canadian history allows warrants to be issued to search private homes without evidence of criminal wrong doing.
- Bill C-36 allows the State to seize property without a Court order, without reporting the seizure to a Court, and for an indefinite period.
- Bill C-36 allows the State to assume control over the movement of private property without a Court order and without a safety concern.
- The search and seizure powers in Bill C-36 are probably unconstitutional for violating the right found in section 8 of the Canadian Charter of Rights and Freedoms to be free from unreasonable search and seizure.
- Persons can be fined and have property forfeited to the State for administrative violations. Persons so charged have no right to have a Court determine their guilt or innocence. Guilt is determined by the Minister. There is no defence of due diligence or of honest but mistaken belief. There does not have to be a safety risk to be charged with an administrative offence. The Minister who determines your guilt or innocence can keep seized property if he/she finds you guilty.
- Directors, officers and managers are personally liable for violations by their company. Despite the possibility of multi-million dollar fines and long prison sentences, there is no right to cross-examine key witnesses.
- Directors, officers and managers can be saddled with debt years after they have left the company.
- Orders for recall or which take control of private property are exempted from the procedural safeguards of (1) review and (2) publication found in the Statutory Instruments Act.
- All businesses manufacturing, selling or distributing consumer products are saddled with additional red tape and expense regardless of whether or not there is a safety concern.
- Retailers and distributors of consumer products become liable for product labelling and instructions.
- There may be a significant conflict of interest. Health Canada may benefit financially from fines and the seizure of private property.
- Some consumer products such as sporting goods may have to be removed from the market for violating the safety provisions of the Bill.
- The Provinces are allowing the Federal Government to regulate in the Provincial area of property and civil rights. This represents a significant transfer of power from the Provinces to the Federal Government.
- The federal cabinet can incorporate documents from foreign governments or organizations as law by referring to them in regulations. This will remove Parliamentary scrutiny on issues that could fundamentally change the ground rules for the consumer product industry.
- Trade agreements and foreign laws can be adopted without Parliamentary scrutiny.
Discussion Paper Only
This is a discussion paper only and does not necessarily reflect the position of the NHPPA or of the NHPPA Advisory Board. The thoughts and comments are those of the author, Mr. Shawn Buckley and are intended to encourage Canadians to read Bill C-36 and to foster discussion.
This is an initial discussion paper only. The author expects that as feedback is received and further study of the Bill is undertaken, that the opinion of the author will broaden.
The NHPPA is inviting comments on this discussion paper. Feedback and comments can be forwarded to the attention of Shawn Buckley at email@example.com.
For media enquiries only, contact the Natural Health Products Protection Association at 250-377-4930.
Importance of the Rule of Law
As Canadians we are not accustomed to discussing our rights or concepts such as the rule of law. This is, I believe, because for most of our lives we could take our rights for granted. Our governments and courts protected our rights which enabled most of us to ignore such issues.
Gone are the days, however, when we can continue to take our rights for granted. I never expected to see in my lifetime laws such as Bills C-51 and now Bill C-36 introduced into the House of Commons, let alone passed (Bill C-36 under the name of Bill C-6 passed the House of Commons with the support of all four parties in 2009). Bill C-6 did not become law only because some courageous Senators woke up and advocated for our basic rights and freedoms. I would encourage all Canadians to read the Senate debates on Bill C-6.
To understand the significance of Bill C-36 it is necessary to understand the rule of law. The rule of law requires the courts to supervise any state interference with our person or our property.
To illustrate the importance of the rule of law, imagine living in past times when there was no rule of law. If the ruler wanted to kill or imprison you, the soldiers came and dragged you into the dungeon. If the ruler wanted your family or your property, the soldiers came and took what the ruler/state wanted. From the citizen’s perspective, this was absolute tyranny. The ruler/state had arbitrary control over your person, your family and your property. The state made the laws, enforced the laws and heard all appeals against its decisions.
Throughout history significant blood has been shed to establish the rule of law under which the state cannot act as both the police and the courts. Under the rule of law if the state wants to kill or imprison you, it can only do so under the supervision of independent courts. Under the rule of law if the state wants to seize your property, they can only do so with court supervision. Courts only permit interference with our person or our property according to valid laws and established legal principles.
The rule of law is the fundamental underpinning of a free society. Sacrificing the rule of law always leads to tyranny and loss of freedom. It is difficult to imagine any situation in which Canadians should be willing to permit the rule of law to be undermined. Unfortunately, in the area of consumer products, Canadians are being asked to sacrifice the rule of law.
This raises the question as to whether consumer products have suddenly posed such a threat to Canadians that it is necessary to sacrifice fundamental rights and freedoms in order to protect ourselves.
It would be helpful to learn if there have been any credible risk analyses done by Health Canada or the Government of Canada to show:
- the actual risks we are suddenly facing posed by consumer products;
- if these risks are new or have suddenly developed;
- how the sacrificing of fundamental freedoms, including the rule of law, is necessary to address any actual risks.
Canadians should know if they are being asked to sacrifice fundamental freedoms as a result of credible risk analyses, or whether the provisions of Bill C-36 are based on other factors such as speculation and/or bureaucratic wish lists.
Relevance to the Natural Health Community
Bill C-36 does not cover Natural Health Products (“NHPs”). Passage of the Bill will not have a “direct” effect on the natural health community. Subsection 4(3) makes it clear the Bill does not apply to NHPs.
It would be a mistake, however, to then assume that Bill C-36 does not pose an indirect and significant threat to the natural health community.
Bill C-36 was first introduced in the 39th Parliament as Bill C-52. It was introduced at the same time as Bill C-51. Bill C-51 and C-52 (now Bill C-36) are sister Bills. They were both written by Health Canada. They both gave Health Canada inspectors sweeping new powers. They both undermined the rule of law and removed fundamental freedoms. The enforcement provisions were so identical, that in many cases the wording was the same.
The main difference between the two Bills was that Bill C-51 applied to food and drugs (including natural health products) whereas Bill C-52 (now C-36) applied to consumer products.
Citizens rebelled against Bill C-51 because it was clear that Health Canada could absolutely crush those in the natural health community that were not in full compliance with the Food and Drugs Act and Regulations. That rebellion has been “temporarily” successful. As of today, the Government has not re-introduced Bill C-51. Rather, they have only re-introduced the companion Bill, C-36.
If Bill C-36 passes, Health Canada inspectors will be given the very powers over consumer products that citizens fought against them getting for natural health products. If Bill C-36 passes, and the government then re-introduces Bill C-51, it will be difficult to oppose. How can citizens credibly complain about Bill C-51 giving powers to Health Canada inspectors that the inspectors already have over consumer products? As a group drugs carry a higher risk profile than consumer products. Health Canada will simply respond that it makes sense for their inspectors to have a single group of powers that apply to all products. In this scenario, Bill C-51 will not be granting them new powers, it will simply be harmonizing their powers.
I recognize that the Canadian Health Food Association (the “CHFA”) has adopted the position that Bill C-36 does not pose a threat to natural health products. I am mindful, however, that the CHFA did not directly oppose Bill C-51 which posed a tremendous threat to the natural health community. Considering the tremendous negative precedent posed by Bill C-36, one wonders if it is worth the risk to allow it to be passed, thus creating an enforcement power precedent for Health Canada inspectors that many in the natural health community could not survive.
There is no downside for the natural health community to opposing Bill C-36. Indeed, the Bill represents such a threat to fundamental principles such as the rule of law, that there would be benefit in opposing it even if it was not the sister Bill to Bill C-51, and even if it did not apply to Health Canada inspectors.
There is certainly a risky downside in appeasing Health Canada by sitting on the side-lines while Bill C-36 was passed. If Bill C-36 passes, a precedent is set. It is completely unrealistic to assume that similar enforcement provisions and penalties would not be applied to drugs and Natural Health Products. As discussed below, Bill C-36 provides Health Canada with dramatically expanded powers to:
a) search private property without a warrant;
b) seize private property without Court supervision;
c) destroy private property without Court supervision;
d) take control of businesses without Court supervision;
e) in some circumstances to keep seized private property without a Court order;
f) impose penalties that manufacturers, distributors and retailers in the natural health community could not survive.
If Bill C-36 becomes law, then Health Canada inspectors will have two sets of powers. One set for foods, drugs, medical devices and cosmetics, and another set for consumer products. Their powers concerning consumer products will be dramatically more powerful than their tools for foods, drugs medical devices and cosmetics. Since it is beyond question that drugs carry a much higher risk profile than consumer products, Health Canada can credibly argue that they need the same powers for “drugs”. From a public policy perspective it would make no sense for Health Canada to have less power to protect public safety for drugs than they have for less risky consumer products.
The danger of Bill C-36 is that it will act as the Trojan Horse through which Health Canada inspectors will first be granted the powers Canadian Citizens recently rebelled against.
Although Bill C-36 does not apply to natural health products as a group, specific things such as plants or plant extracts could be prohibited and hence subject to the Bill C-36 powers. This could be done by simply adding a plant or an extract to Schedule 2 by passing a regulation.
Real example of how Bill C-36 will enable Health Canada to totally destroy a business
Under the current law, businesses can usually survive Health Canada attacks where the State is wrong. We are protected by Court and Review Board supervision. Bill C-36 removes this supervision requirement and creates a situation where small businesses are unlikely to survive misguided Health Canada attacks.
Before reading in this Discussion Paper about specific concerns with Bill C-36, it might be helpful to illustrate how the Bill would actually impact a specific business.
In my law practice, I regularly advise persons and companies dealing with Health Canada. I have asked for, and received, consent to share the Warm Buddy situation to illustrate how Bill C-36 will operate to enable Health Canada to totally destroy a business.
The following facts are current. The Warm Buddy Company is currently facing Health Canada enforcement activities.
- The Warm Buddy Company is a small company started by a former nurse, to provide comforting stuffed animals;
- The stuffed animals are typical except that there is a slot at the back. In the slot is a heating pack with a small amount of rice. The heating pack is put into the micro-wave, heated, and put back into the slot. This warms up the stuffed animal making it comforting to hold onto;
- The rice in the pack is normal household rice typically eaten in most homes;
- Warm Buddy has tried a number of other substances, none of which work as well as common household rice. For whatever reason rice is really effective at transferring heat through the stuffed animal. There is currently no obvious substitute for Warm Buddy to turn to;
- Warm Buddy has been selling the stuffed animals for 13 years. For two years prior to that they used rice products such as shoulder wraps. The stuffed animals are made by a company that specializes in making stuffed animals. Warm Buddy sews the heating packs itself. It has never had a report of a pack opening which would enable the normal household rice to escape;
- For a period of time Warm Buddy had a medical device license from Health Canada for the stuffed animals. Health Canada later advised that a device licence was not required as the stuffed animals are not medical devices (i.e. they do not treat or prevent medical conditions);
- The Hazardous Products Act prohibits the sale of childrens’ toys that “contain plant seeds as stuffing material” (section 10(c) of Part 1 of Schedule 1);
- The Hazardous Products Act does not prohibit the use of “chemical” heating packs in childrens’ toys. Nor does it prohibit the use of organic material. If it was effective, Warm Buddy could use things similar to rice such as ground up coconut. The prohibition is only against the use of seeds;
- In the past Warm Buddy was contacted by Health Canada and told that it cannot put rice into the packs because rice is a seed. Warm Buddy responded by informing Health Canada that normal household rice is not a seed. It will not germinate. One cannot grow rice from it. This appeared to satisfy Health Canada as contact stopped;
- On March 8, 2010 Health Canada drafted a policy paper which concludes that rice is a seed, and that stuffed animals cannot contain rice. The supposed danger includes (reproduced verbatim from the policy paper):
- the seeds could be toxic;
- the seeds could be treated with a toxic pesticide;
- the seeds could be an allergen to some individuals;
- the seeds could become lodged in a child’s nose or ears;
- the seeds could be aspirated into the lungs;
- medical professionals will have difficulty locating seeds that have entered the body because plant material is not x-ray opaque;
- seeds that remain in the lungs for extended periods of time may fester and become a cause of bronchitis or pneumonia;
- seeds that have entered the body (with the presence of body moisture) may swell and germinate and become excessively difficult to remove; and
- the seeds could contain larvae or insect eggs which could develop (with heat and moisture) into an infestation of vermin;
- Armed with this policy paper Health Canada demanded that Warm Buddy recall all of the stuffed animals that it has sold for its 13 years of existence. Health Canada inspectors visited retailers to force the stuffed animals from the market. This included travelling to a city in Saskatchewan and seizing stuffed animals from a retailer. At least one home business was also visited;
- Health Canada received a complaint of a rice pack burning after being heated. In the 13 years of using rice packs, Warm Buddy has done extensive testing and has never had any problem with packs heated several times longer than is indicated clearly on the pack instructions. This is one consumer complaint in 15 years of business;
- Needless to say anything meant to be heated in a micro-wave, whether a heat pack or food, can be over-done if heated for excessive periods. Health Canada is not asking for all microwave food, including microwave food containing rice, to be recalled from the market;
- I advised Warm Buddy that I believed Health Canada was wrong in law. First, I agree with Warm Buddy that rice is not a seed. Seed is not defined in the Act, and so the trade or ordinary meaning will apply. Both meanings refer to things that germinate. This also accords with other federal legislation such as the Seeds Act which does not consider rice to be a seed. Second, I do not believe that the heating packs are stuffing. The Act does not define “stuffing” so the trade or ordinary meanings will apply.
Stuffing generally refers to the material that makes such toys full – in this case usual stuffed animal stuffing. My kids had an Elmo stuffed animal that if squeezed shook and giggled. There was a device inside that could be removed to change batteries. That device would not be considered stuffing. Third, the prohibition against seeds in childrens’ toys only covers children. Warm Buddy also sold for adults, and so even if Health Canada was right on the seed and stuffing issue, Warm Buddy should be able to sell to adults. It is not the law in Canada that adults cannot buy stuffed animals with rice heating packs;
- I wrote to Health Canada about my concerns set out above. They have not budged and want a full recall of all stuffed animals ever sold. Although “child” is not defined, they are advising that it means up to age 14. Apparently Parliament meant to protect 14 year olds from chewing through stuffed animals and inhaling seeds;
- If Warm Buddy does what Health Canada is asking, they will go bankrupt. The employees that have not already been laid off following the demand for a recall will be let go. All Canadians will be unable to purchase stuffed animals with rice heating packs.
The “risk” involved
The rice heat packs, like anything meant to be heated in a microwave, or oven for that matter, can be over-done. Instructions need to be followed and common-sense exercised. This is a risk that most Canadians take for granted and are comfortable with. The law does not prohibit the use of heating packs for stuffed animals. Any manufacturer can use chemical heating packs or packs with other organic material in full compliance with the law. These packs would, of course, carry the same over-heating risk if overdone.
The Health Canada policy document outlining the dangers of seeds is curious. The law does not prohibit the use of organic material as stuffing. Nor does it prohibit the use of things like plastic beads which would carry the same aspiration risk as seeds.
At the end of the day, Warm Buddy is being told to take action that will put them out of business over common household rice. It is probable that every Canadian home has rice. It is probable that all parents feed infants and young children rice on a regular basis. It is probable that all homes have rice in the cupboard that is easily accessible by children, from crawling age up.
This is not imaginary it is real. For anyone who has built a business, and for all families that rely on a family business, please imagine being asked to cease your business, and to become bankrupt, over the risk of rice.
The situation under the current law
Under the current law both the public and Warm Buddy are protected.
If Health Canada believes that common household rice is presenting a significant danger to Canadians, the Minister can make an order prohibiting rice heating packs (sections 5.1 and 27.1 of the Hazardous Products Act). Health Canada could also apply for an injunction prohibiting Warm Buddy from selling contrary to the Act. Both of these actions would serve to immediately protect us from the danger of household rice.
Health Canada also has the option of applying for a search warrant under the Criminal Code to seize all of Warm Buddy’s stock. Health Canada could then remove all of the stock from Warm Buddy.
Although less immediate, Health Canada could also charge Warm Buddy with violating the Act.
Warm Buddy is protected as orders under the Hazardous Products Act expire after 14 days unless approved by the Governor in Counsel. The order must also be tabled in Parliament for review. Finally, if the order is confirmed Warm Buddy can apply to an independent Review Board to contest the order.
If Health Canada applied for an injunction, Warm Buddy would be able to present its case to the Court, with all of the procedural safe-guards that are built into the Court system.
If Health Canada obtained a search warrant and seized Warm Buddy’s stock, the seizure would have to be immediately reported to a Justice of the Peace. Health Canada could only retain the stock with a Court order. Health Canada would have to quickly start Court proceedings for either a prosecution or for forfeiture or a Court would order the return of the stock.
If Warm Buddy is charged, a Court will adjudicate on the seed, stuffing and age issues in a fair manner.
Under the current law, Health Canada can take immediate steps to protect against any real health concern. At the same time, Warm Buddy is protected with procedural safe-guards, including independent review by a review board or a court.
Health Canada is unlikely to seek a ministerial order that has to be tabled in Parliament. Similarly, Health Canada is unlikely to apply for a Court injunction. It would be embarrassing to be publically seen pursuing orders over common house-hold rice.
Because Health Canada is unlikely to seek a ministerial order or an injunction for common household rice, Warm Buddy can survive while attempting to have the seed, stuffing and age issues determined, by a court if need be.
The current law does not fail to protect Canadians. Indeed, it is difficult to conceive of what other powers Health Canada would need to address a “real” threat.
If at the end of the day a Court following charges finds that Warm Buddy was wrong not to order a recall so that even adults could not have rice-packs, Warm Buddy can be duly punished with million dollar fines and/or imprisonment (for directors).
The situation under Bill C-36
The situation under Bill C-36 is very different than under the current law.
Remember, Health Canada is demanding a full recall of all Warm Buddies sold over 13 years. This is certain bankruptcy for Warm Buddy.
Under Bill C-36, instead of demanding that Warm Buddy recalls every stuffed animal sold over 13 years, Health Canada will order a recall under section 31.
Because Health Canada wants every stuffed animal sold for 13 years recalled, in addition to the recall order under section 31, the Minister under section 32 also orders Warm Buddy to take out national ads in both the Globe and Mail and the National Post. These ads are to be no smaller than half-page ads. The ads are to run for two weeks and are to start immediately. Warm Buddy is also ordered to post the recall on the entire home page of their website. Finally, Warm Buddy is ordered to stop manufacturing.
These orders are delivered to Warm Buddy at 2 p.m. on Day 1.
Under sections 41, 42 and 44:
- it is an offence not to follow the recall order. It is an offence not to follow the advertising order;
- every single day the orders are not followed is a separate offence;
- the directors, officers and managers involved in not ensuring the orders are followed are all personally liable for the offence of not following the orders;
- the penalties include:
- fines of $5,000,000 per offence (every day the orders were not followed would be two separate offences) or higher figure if set by the Court, and
- up to five years in prison per offence (every day the orders were not followed would be two separate offences).
The fact that national advertising would destroy the brand would be of no consequence. Nor would the fact that the risk is common household rice.
For certain Warm Buddy, and her directors and officers commit the offence of not following the orders. The orders are dropped off at 2 p.m. on Day 1. They are fairly certain that the orders will result in the bankruptcy of the company. They are worried about bankrupting the company. They want to seek legal advice which cannot occur on Day 1. Indeed, realistically it cannot occur for several days.
Warm Buddy stops selling on Day 1. Warm Buddy has not followed either order and has committed two offences on Day 1.
On Day 2, while still waiting for proper legal advice, Warm Buddy begins a recall but it is not to Health Canada’s satisfaction. No ads are placed and the website home page is not changed. Warm Buddy has committed at least 1 offence, perhaps 2 on Day 2.
On Day 3 while still waiting for proper legal advice, Health Canada steps in. Because Warm Buddy did not recall to Health Canada’s satisfaction, Health Canada steps in under section 33 and conducts the recall. This involves the national advertising. It involves setting up specific numbers for consumers to call, and the hiring of persons to manage the recall. All of these expenses are then sent to Warm Buddy which is responsible for them under section 33.
On Day 3 Health Canada inspectors also seize the Warm Buddy premises and all of their stock under section 21. They are able to do this without a warrant. They do not ever report this seizure to a Court, as they are not required to do so. Health Canada has the stock moved to a secure storage facility to prevent Warm Buddy from accessing the stock.
Under section 24 Health Canada bills Warm Buddy for the expense of moving the stock to a secure location. Health Canada bills Warm Buddy monthly for the cost of storage. There is no time limit on storage. I am aware of one seizure that is going on over seven years under the Food and Drugs Act.
Warm Buddy will not survive the recall, let alone the expenses for seizure and storage.
Because Warm Buddy did not fully comply with the recall or advertising order, when seizing the stock and premises on Day 3, the inspector issues a violation ticket under sections 49 and 52. There is only a single violation for not following the recall order on Day 1. Although there could also be violations for not following the advertising order on Day 1, and for not following both orders on Day 2, or on Day 3 (as it is no excuse that Health Canada has stepped in to do the recall and advertising), the inspector decides to limit the violations to 1.
Remember the orders were not followed on Day 1 or fully on Day 2 as the directors and managers feared they meant bankruptcy and wanted to obtain legal advice before committing the company to bankruptcy. Likely their fiduciary duty to the shareholders required this.
Warm Buddy asks for a review of the violation under section 53(2). Warm Buddy cannot appeal whether the orders should have been made. The only issue under the review is whether the recall order was violated. Warm Buddy does not have the right of a Court hearing. Indeed, the Bill is clear, the appeal is in writing only, heard by another inspector designated to hear reviews by the Minister. The review predictably fails. The company and directors are liable for the administrative penalty on the violation ticket.
Because the company committed an administrative offence, the Minister elects under section 64 to keep the seized property (the Warm Buddy premises and stock). The Minister does not apply to a Court to obtain the seized property, as this is not required. Warm Buddy can later be billed by the Minister under s. 64 for the expense of destroying the stock.
Warm Buddy’s premises and stock are seized, forfeited to the State, and the stock is destroyed, all without any Court supervision of any kind.
Warm Buddy and its directors, officers and managers are later charged criminally with each of the following charges:
- selling on Day 1 a product subject to a recall order contrary to section 7;
- advertising on Day 1 a product subject to a recall order (website is still up) contrary to section 8;
- violating the advertising order on Day 1 contrary to section 41;
- advertising on Day 2 a product subject to a recall order contrary to section 8 (website is still up);
- violating the advertising order on Day 2 contrary to section 41;
- violating the recall order on Day 2 contrary to section 41;
- advertising on Day 3 a product subject to a recall order contrary to section 8 (website still up);
- violating the advertising order on Day 3 contrary to section 41;
- violating the recall order on Day 3 contrary to section 41.
Warm Buddy, its directors, officers and managers are each convicted of all of these offences and are subject to large fines. Warm Buddy is bankrupt and cannot pay the fines. The directors, officers and managers that were charged and are liable under section 42 are each bankrupted by the fines.
A small viable business built up over 13 years with hard work and perseverance is destroyed. The persons who took pride in building up the company and providing quality “Warm Buddies” enjoyed by many are personally destroyed and because of age will never recover. They and their families are impoverished.
Canadians are protected from having Warm Buddies with common household rice. Those involved get a first hand education in what it is like to live under Bill C-36 where the rule of law concerning consumer products is eliminated.
This all occurs for our “safety” but those involved realize that trading fundamental freedoms like the rule of law for safety does not lead to “safety”.
Canadians learn of the convictions but never learn how Warm Buddy was bankrupted. The orders issued by the inspectors are exempted from the normal review and publication safeguards found in the Statutory Instruments Act.
Change in legal advice
As outlined in the Warm Buddy example, if Bill C-36 passes, there is a sea-change in how the State will interact with the citizen in the area of consumer products. This will require a radical change in advice that lawyers such as myself will have to give to persons subject to Health Canada scrutiny.
Under the current law, where courts or review boards supervise Health Canada activity, when approached by a client such as Warm Buddy, I first determine if there is a real risk, I analyze the law, and I give my opinion to the client.
In a case such as the Warm Buddy case where I am of the opinion that Health Canada is simply wrong, and where it is clear the risk is really low, the company has the opportunity to try to have the law determined while at the same time surviving.
If Bill C-36 passes, and a company like Warm Buddy calls me after receiving orders to recall and advertise, not only will I advise them to immediately do everything Health Canada asks. I will also have to advise them of the advantages of destroying their business quickly, such as immediately destroying all stock and recalled items, so that the storage and destruction costs are minimized. There will be no point in resisting Health Canada, even where, as here, I am of the opinion that they are wrong in their interpretation of the law, and even where, as here, I think their supposed risk is simply silly. My professional obligation is to offer the best advice possible to protect the client. Under Bill C-36 there is no surviving for a company such as Warm Buddy facing orders to recall and advertise. The best that can be hoped for is that some of the directors, officers and managers can avoid prosecution and personal bankruptcy.
The Property and Privacy Rights Affected by the Bill are Broad in Scope
The Bill has a very wide application. Section 2 of the Act contains the following definitions:
“consumer product” means a product, including its components, parts or accessories, that can reasonably be expected to be obtained by an individual to be used for non-commercial purposes, including for domestic, recreational and sports purposes, and includes its packaging.
“article to which this Act or the regulations apply” means
a) a consumer product;
b) anything used in the manufacturing, importation, packaging, storing, advertising, selling, labelling, testing or transportation of a consumer product; and
c) a document that is related to any of those activities or a consumer product.
“Consumer product” covers anything from start to finish that makes its way into the hands of consumers, even if it is just a part of a consumer product. A product remains a “consumer product” after it is purchased by the consumer. The definition is not limited to apply only to consumer products prior to sale to consumers.
“Article to which this Act or regulations apply” covers all consumer products and all property including equipment, buildings, vehicles, media outlets, and labs that are used in the manufacturing, importation, packaging, storing, advertising, selling, labelling, testing or transportation of a consumer product.
In discussing the broad powers the new law gives the State to seize and destroy property without any compensation, it is important for Canadians to realize that the new law applies to:
- most items purchased by consumers regardless of cost to the consumer, and
- a very wide range of commercial property including buildings, media outlets and vehicles that are not themselves “consumer products” and which pose no risk to the consumer.
Consumers are not being told that as the new law is currently written, products they purchased may be subject to seizure without compensation.
Business owners are not being told that the new law gives the State sweeping powers to control and seize their property without a warrant and without having to report to a Court.
Context for the New Law – is it necessary to take away freedoms to protect us?
New laws are supposed to serve a public purpose. In this case the State is communicating that the new law is necessary to protect our families from dangerous consumer products.
This raises the question: are we so unsafe without the new law that we legitimately need the new law to protect us?
For citizens to form a realistic opinion on this, it is necessary to understand the powers the State currently has to protect consumers from dangerous products. As outlined below the State currently can:
- ban or restrict any consumer product under threat of million dollar fines and two year jail sentences under the Hazardous Products Act;
- make immediate orders banning or restricting a consumer product if there is a significant risk to health or safety. In addition to fines and imprisonment for non-compliance, the State can apply to the Court for an injunction which brings police enforcement of the order;
- obtain Criminal Code search warrants and seize non-compliant products, and
- prosecute for criminal negligence or homicide under the Criminal Code. In some cases this can result in penalties of life imprisonment.
With these tools already in place, the question arises as to what “other” powers are necessary to protect us?
Bill C-36 adds new powers. However, the real significance is that it allows the State to control and destroy private property without the review and supervision of the Courts or of other independent review boards. This raises another question: considering the sweeping powers the State already has to “protect” us, is it necessary to take away the independent supervision of the Courts that we have traditionally relied upon to “protect” citizens from the State?
Put another way: if the State already has all the powers necessary to ensure that consumer products are safe, how are we protected by allowing the State to control, seize and destroy private property without the independent supervision of the Courts that citizens currently enjoy?
These are questions of fundamental importance that need to be addressed as people read and consider the need for the sweeping State powers found in Bill C-36. We look forward to input on these questions as we try to formulate answers.
The Hazardous Products Act
This Act can be found at http://laws.justice.gc.ca/en/H-3/FullText.html. on the Department of Justice site.
The Hazardous Products Act (the “HPA”) currently gives the State significant powers to protect consumers. Under this Act the State can:
- prohibit the advertising, sale or importation of a consumer product;
- put restrictions on the advertising, sale or importation of a consumer product;
- if there is a significant risk to health or safety, make an order prohibiting or restricting the advertising, sale or importation of a consumer product, and
- demand any information from a manufacturer to determine the safety of a product.
Although the State has broad powers to make immediate orders to stop the sale of any hazardous product, the HPA also protects the property owner by having procedural safeguards that comply with the rule of law. These include provisions that:
- orders made for safety reasons expire after 14 days unless they are approved by the Governor in Council (i.e. the Federal Cabinet). This gives the State 14 days to determine if there really is a health risk in the situation where an order was made as a precaution;
- the order must be tabled in Parliament for review, and
- if the order is confirmed the property owner can apply to an independent Review Board to contest the order. In this way the rule of law is respected. The State cannot affect property rights without an independent review.
It is an offence under the HPA to ignore an interim order. Penalties include fines of up to a million dollars and/or imprisonment of up to two years for each violation.
Although there are significant penalties under the HPA to ensure compliance with orders made to protect consumer safety, it needs to also be kept in mind that the State can apply to the Federal Court for an injunction if an order is ignored. This can be done quickly.
It enables police intervention to enforce the Court’s order. The property owner is protected as the Court will consider all of the evidence concerning safety and can compensate the property owner if it is eventually determined that there was not a safety risk.
For the purposes of this Discussion Paper I should add that I am not certain that the Board of Review provisions would apply to an interim order under the HPA. There is some ambiguity in the wording of that Act. I have only done cursory research and have not found a case to resolve that ambiguity. It is my current opinion based on the wording of the HPA that the Board of Review provisions apply to interim orders. I look forward to feedback on this issue.
The Criminal Code Criminal Negligence Provisions
Under section 219 of the Criminal Code, a person or company commits criminal negligence if they do anything or fail to do anything it is their duty to do which “shows wanton or reckless disregard for the lives or safety of other persons.” This means that if a person or company sold a consumer product which they knew was not safe or which they should have known was unsafe, they are committing a criminal offence and are subject to the penalties for criminal negligence found in the Criminal Code.
The penalties for criminal negligence vary depending upon the harm caused. If bodily harm is caused the maximum penalty is imprisonment for 10 years. If death is caused the maximum penalty is imprisonment for life. Persons who cause death by criminal negligence can also be charged with homicide under section 222(5)(b) of the Criminal Code. The penalties for homicide vary depending upon whether the homicide is characterized as murder, manslaughter or infanticide. If the criminal negligence is characterized as murder, the minimum penalty is life imprisonment.
The Criminal Code penalty of life imprisonment for criminal negligence and murder is the most severe penalty permitted in our Justice System.
Anyone harmed by a consumer product can sue for damages. Arguably it is the threat of bankruptcy posed by law suits that have historically ensured that consumer products are safe. Any person or company that sells a dangerous product faces bankruptcy regardless of whether they knew the product was unsafe.
The positive effect of civil penalties on consumer product safety is unlikely to be exaggerated.
The Abolition of the Law of Trespass
As a British Colony we inherited the British Common Law on trespass. Indeed, it has been one of the foundations of our right to own and enjoy property that no-one, including the police, can come onto our property or interfere with our property. We consider this to be such a fundamental freedom that when suing for trespass upon our land, we do not even have to prove we suffered any damage or loss. The law has traditionally held the right to private enjoyment of our land to be so significant, that the mere trespass upon it is enough to get a civil judgment.
Our right to enjoy property free of trespass is not limited to land. We have the right to enjoy our personal property without interference. Anyone who interferes with our personal property commits trespass.
We hold the right to the private enjoyment of property as so important, that we have placed specific provisions in the Criminal Code to protect it. These include:
- section 177 which makes it a criminal offence to trespass near a private home at night;
- section 38 which makes it an offence to take away our personal property. It also allows us to prevent a trespasser from taking our personal property without worrying about being charged with assault;
- section 39 which protects us from criminal prosecution for defending our personal property;
- section 40 which enables us to use as much force as is necessary to prevent trespassers from entering our homes, and
- section 41 which deem trespassers to commit assault if they resist attempts to remove them from a house or land. This section also allows persons to use force to remove persons from their homes or land.
Bill C-36 abolishes the law of trespass. Subsection 21(4) provides:
An inspector who is carrying out their functions or any person accompanying them may enter on or pass through or over private property.
Note that under subsection 21(4), an inspector is not limited to investigating the property owner. An inspector or any person accompanying an inspector can trespass on your property if investigating another person’s property and you have no recourse.
It should be noted that the wording of subsection 21(4) is different than the wording for the similar provision in Bill C-6. Under Bill C-6 the wording was:
An inspector who is carrying out their functions or any person accompanying them may enter on or pass through or over private property, and they are not liable for doing so.
The words “and they are not liable for doing so” have been removed in Bill C-36. This does not, in my opinion, change the meaning. A person is not guilty of trespass if they have the right or authority to be on private property without permission. It is for this reason that officers with search warrants or owner permission cannot be found liable for trespass. Indeed, Blacks’s Law Dictionary, Fourth Edition defines “Trespasser” as:
One who has committed trespass. One who intentionally and without consent or privilege enters another’s property. Fitzgerald v. Montgomery County Bd. Of Ed., 25 Md.App. 709, 336 A.2d 795, 797. A person who enters on the property of another without any right, lawful authority or an express or implied invitation or license. Morris v. Atchison, T. & S.F.Ry. Co., 198 Kan. 147, 422 P.2d 920, 927, 928.
Subsection 21(4) clearly gives Health Canada inspectors “lawful authority” to trespass on private property. This serves to abolish the law of trespass. The change of wording from Bill C-6 does not affect this.
One of the significant criticisms of Bill C-6 was the abolition of the law of trespass. It is curious that Health Canada would drop words that made it obvious a fundamental right was being taken away, without actually changing the meaning so as to protect that right.
Currently consumer safety is protected under the Hazardous Products Act, the Criminal Code and Civil Law while respecting the law of trespass. This raises the question as to whether it is necessary to abolish fundamental property rights under the justification of “consumer protection”. I look forward to comments on this question.
The Right to Seize Property Without a Court Order, Without Reporting the Seizure to a Court, and for an Indefinite Period
Section 21 provides in part:
21(1) Subject to subsection 22(1), an inspector may, for the purpose of verifying compliance or preventing non-compliance with this Act or the regulations, at any reasonable time enter a place, including a conveyance, in which they have reasonable grounds to believe that a consumer product is manufactured, imported, packaged, stored, advertised, sold, labelled, tested or transported, or a document relating to the administration of this Act or the regulations is located.
21(2) The inspector may for the purpose referred to in subsection (1),
(a) examine or test anything – and take samples free of charge of an article to which this Act or the regulations apply – that is found in the place;
(d) seize and detain for any time that may be necessary
i) an article to which this Act or the regulations apply that is found in that place, or
ii) the conveyance;
Please note that these sections do not allow an inspector to enter into your home. To enter a private home an inspector has to apply for a warrant (see section 22).
Bill C-36 also has an important addition not found in Bill C-6 that makes it clear that these inspection powers are not to be directed at consumers who store consumer goods for their own use. This is through the addition in section 2 of the following definition:
“storing” does not include the storing of a consumer product by an individual for their personal use.
Section 21 provide that, with the exceptions of a private home or personal consumer goods, inspectors can enter on any property in which the inspector believes a consumer product is manufactured, imported, packaged, stored, advertised, sold, labelled, tested or transported. This would include:
- all media outlets that accept advertising of consumer products;
- private property (excluding homes) in which a consumer product is stored (unless the consumer product is owned and stored by the consumer for the consumer’s personal use);
- all commercial property which is in any way connected with consumer products or parts of consumer products, and
- conveyances such as trains and trucks.
Subparagraph 21(2)(a) permits the seizure of samples for testing. This means that subparagraph 21(2)(d) is not referring to the taking of samples for testing.
Under subparagraph 21(2)(d) there is no limit to:
- how much property can be seized, and
- how long the property can be seized.
There is also:
- no requirement for a warrant prior to seizure;
- no requirement to report the seizure to a Court;
- no mechanism to have the seizure and on-going detention reviewed by a Court or independent review board (as in the Hazardous Products Act), and most importantly
- THERE DOES NOT HAVE TO BE A HEALTH RISK BEFORE THERE IS A SEIZURE AND DETENTION. All that is required is that the seizure be for the purpose of verifying compliance or preventing non-compliance.
Considering that the stated purpose of the Act is to protect our safety, it is curious that there does not have to be a health risk for there to be a seizure. If we are being asked to surrender our property rights in the name of safety, we should consider when analysing this Bill whether there should be a safety requirement for there to be a seizure and unlimited detention.
Under the Hazardous Products Act which Bill C-36 replaces, property owners have the right to apply to Court for the return of seized property. This raises the question as to why
Bill C-36 takes away the rights of property owners to apply to Court for the return of seized property. Does Health Canada believe that Courts cannot be trusted to protect consumer safety?
The Private Home Problem
Bill C-36 represents a startling removal of our freedom from State intrusions into our private homes.
The right to be free from State Agents coming into our private homes uninvited has been a fundamental right for all of Canada’s history. Presently, the police or Health Canada Inspectors, can only get search warrants to enter our private homes if they have some evidence of criminal wrong doing.
Currently a Health Canada Inspector who wants to search your private home has to abide by the same rules as the regular police. The Inspector has to apply for a search warrant under s. 487 of the Criminal Code. Section 487 includes:
487(1) A justice who is satisfied by information on oath in Form 1 that there are reasonable grounds to believe that there is in a building, receptacle or place
(a) anything on or in respect of which any offence against this Act or any other Act of Parliament has been or is suspected to have been committed,
(b) anything that there are reasonable grounds to believe will afford evidence with respect to the commission of an offence, or will reveal the whereabouts of a person who is believed to have committed an offence, against this Act or any other Act of Parliament,
(c) anything that there are reasonable grounds to believe is intended to be used for the purpose of committing any offence against the person for which a person may be arrested without warrant, or
(c.1) any offence related property,
May at any time issue a warrant…
Our current law strikes a balance between our need to be free from police intrusion into our private homes, and the State’s interest in investigating crime. This balance is struck by only allowing the search of our private homes when there is evidence placed before a justice of criminal wrong doing.
Bill C-36 represents an astonishing removal of our right to be free from the police searching our homes unless there is evidence of criminal wrong doing. Subsection 22(2) of the Bill allows a justice of the peace to grant Health Canada Inspectors warrants to enter our homes if:
(a) the inspector has reasonable grounds to believe a consumer product is imported, packaged, stored, advertised, sold, labelled or tested in the home, or a document relating to the administration of Bill C-36 or of the regulations to Bill C-36 is located in the home;
(b) Entry into the home is necessary for the Inspector to verify compliance or prevent non-compliance with the Act or regulations, and
(c) Entry into the home was refused or there are reasonable grounds to believe that it will be refused or to believe that consent to entry cannot be obtained from the occupant.
Allowing Inspectors the right to enter our private homes without having evidence of criminal wrong doing, is a significant departure from the right to privacy we currently enjoy. Before this is given up, we should ask:
- should Health Canada Inspectors have more power to enter our private homes than the police which investigate much more serious matters under the Criminal Code and other Federal Laws?
- are we in such danger that we need to give up what has traditionally been held as a fundamental freedom?
- what is wrong with the current power Health Canada Inspectors share with other law enforcement persons under s. 487 of the Criminal Code. Are there examples where that rather broad power was insufficient for an investigation?
In answering these questions, it may be helpful to keep in mind that Bill C-36 was written by Health Canada, the very State Bureaucracy which will benefit from the new powers. We do not allow the police to write the Criminal Code for much the same reason we do not allow taxpayers to write the tax laws.
I do not expect that a search warrant of a private home issued under Bill C-36 would stand up to a challenge in Court under s. 8 of our Charter of Rights and Freedoms. Section 8 reads: “Everyone has the right to be free from unreasonable search and seizure”. My expectation based on having made many s. 8 challenges in Court, is that the Courts will not allow our private homes to be searched without evidence of criminal wrong doing. However, this is no protection for those of us who may have our private homes searched under Bill C-36 and who cannot afford to make costly constitutional arguments in Court. Our best protection against unconstitutional laws is to ensure that our elected representatives to not pass them.
The State can Assume Control over the Movement of Private Property Without a Court Order and Without a Safety Concern
Paragraph 21(2) includes:
(2) The inspector may, for the purpose referred to in subsection (1),
(e) order the owner or person having possession, care or control of an article to which this Act or the regulations apply that is found in the place – or of the conveyance – to move it or, for any time that may be necessary, not to move it or to restrict its movement;
Section 25 of the Bill reads:
25. An inspector who seizes a thing under this Act shall release it if they are satisfied that the provisions of this Act and the regulations with respect to it have been complied with.
The purpose set out in subsection 21(1) is “the purpose of verifying compliance or preventing non-compliance with this Act or the regulations”.
As outlined above an “article to which this Act or the regulations apply” includes all consumer products and all property including equipment, buildings, vehicles, media outlets, and labs that are used in the manufacturing, importation, packaging, storing, advertising, selling, labelling, testing or transportation of a consumer product.
This means that an inspector can tell property owners to not move private property to check compliance or to prevent non-compliance regardless of how trivial the compliance issue is and regardless of whether or not there is a health risk. I would expect that property owners would be surprised that the movement of their property can be restricted without the presence of even an imagined health risk.
The State can Assume Control of Private Property, Including Land, Without a Court Order and Without a Safety Concern
Bill C-36 enables the State to shut down businesses and to control public property for non-health reasons such as over a testing disagreement with the State or if the State believes there is a contravention of the Act or Regulations. The “contravention” does not have to be one that creates a health risk.
For greater clarity, these new powers permit the State to take control of business and of private property for trivial violations of the Act or Regulations even if those violations do not in any way pose a safety problem. Currently the State has to apply to a Court for a warrant to gain control of private property for alleged offences. The property owner is currently protected as the Court will only issue a warrant on evidence under oath that meets a legal test. Property seized under a warrant has to be promptly reported to the Court. The Court then supervises the holding of the property to ensure it is returned if proper to do so. Bill C-36 removes these fundamental safeguards. In effect, Bill C-36 moves us away from the rule of law. The sections to review are:
31. (1) If the Minister believes on reasonable grounds that a consumer product is a danger to human health or safety, he or she may order a person who manufactures, imports or sells the product for commercial purposes to recall it.
(2) The order shall be provided in the form of a written notice and must include
(a) a statement of the reasons for the recall; and
(b) the time and manner in which the recall is to be carried out.
32. (1) The Minister may order a person who manufactures, imports, advertises or sells a consumer product to take any measure referred to in subsection (2) if
(a) that person does not comply with an order made under section 12 [section 12 concerns orders by the Minister for testing and/or the production of documents] with respect to the product;
(b) the Minister has made an order under section 31 with respect to the product;
(c) the Minister believes on reasonable grounds that the product is the subject of a measure or recall undertaken voluntarily by the manufacturer or importer; or
(d) the Minister believes on reasonable grounds that there is a contravention of this Act or the regulations in relation to the product.
(2) The measures include
(a) stopping the manufacturing, importation, packaging, storing, advertising, selling, labelling, testing or transportation of the consumer product or causing any of those activities to be stopped; and
(b) any measure that the Minister considers necessary to remedy a non-compliance with this Act or the regulations, including any measure that relates to the product that the Minister considers necessary in order for the product to meet the requirements of the regulations or to address or prevent a danger to human health or safety that the product poses.
(3) The order shall be provided in the form of a written notice and must include
(a) a statement of the reasons for the measure; and
(b) the time and manner in which the measure is to be carried out.
33. If a person does not comply with an order made under section 31 or 32 in the time specified, the Minister may, on his or her own initiative and at that person’s expense, carry out the recall or measure required.
The Move Away from the “Significant Risk” Test
As outlined immediately above, sections 31 to 33 permit the State to take control over businesses and private property. This can be to address a “danger to human health or safety” or “to prevent a danger to human health or safety”.
At first this sounds reasonable as the entire purpose is to protect safety. One concern may be, however, that “danger” is not qualified. Many consumer products inherently pose a danger, some sporting equipment being obvious examples. As written the State can take control of businesses and private property for any danger, however trivial. This raises the question as to whether or not the State should be able to override private property rights for trivial safety concerns.
Under the current Hazardous Products Act, the State cannot make orders unless there is a “significant risk, direct or indirect, to health or safety”. By requiring the risk to be “significant”, the Hazardous Products Act protects property owners by ensuring that the State can only override their property rights when there is a “significant” danger. In analysing Bill C-36 the question needs to be addressed as to: whether the State should be allowed to take control of private property without there being a significant risk, as is currently the case.
In considering whether inspectors should have the power to control private property without a “significant” risk, it should be kept in mind that Bill C-36 permits the Minister to make the same interim orders that can be made under the Hazardous Products Act if there is a “significant” risk.
It is curious that under Bill C-36 the Minister is given two sets of order-making powers. The Minister can make orders for any suspected violations whether or not they create any health risk. These orders have no time limit. Business owners can be destroyed by fines for non-compliance. At the same time, the Minister can also make orders if there is a “significant danger”. However, the Minister’s orders for “significant danger” cease after 14 days unless approved by the Governor in Counsel. In addition, these “significant danger” orders must be tabled in the House of Commons within 15 days to ensure they can be scrutinized by Parliament.
Bill C-36 creates the unusual anomaly that the Minister can take absolute control over businesses and property for trivial violations without any supervision of any kind. At the same time, orders for “significant danger” have procedural safeguards and are scrutinized. If this is an exercise in public safety, why does the Minister have sweeping powers where there is not a “significant danger”, but have procedural safeguards and parliamentary scrutiny when a “significant danger” order is made. The rule of law should never be sacrificed for “safety”, yet the way Bill C-36 is written, it is sacrificed where there may not be a safety concern, and is preserved when the “significant danger” power is used.
What I guess has occurred is that the drafters of the Bill copied the Minister’s “significant danger” powers from the Hazardous Products Act. They then also added the powers wish list from Health Canada inspectors. This is why in the first two versions of the Bill (Bills C-52 and C-6), the “Minister” was limited to the “significant danger” power, whereas “inspectors” had the powers now listed in sections 31-33 of Bill C-36. In our earlier Discussion Paper on Bill C-6 we made the following criticism:
It is curious that under Bill C-6 inspectors can make orders for trivial suspected violations that do not create any health risk. These orders have no time limit. Business owners can be destroyed by fines for non-compliance. At the same time, the Minister can only make orders if there is a “significant danger”. Further, the Minister’s orders cease after 14 days unless approved by the Governor in Counsel. In addition, the Minister’s orders must be tabled in the House of Commons within 15 days to ensure they can be scrutinized by Parliament.
Bill C-6 creates the unusual anomaly that the Minister’s servants, the inspectors, have more power than their master, the Minister. This type of anomaly may serve to explain why we generally do not allow the police to write their own laws.
Faced with this anomaly, Bill C-36 has been amended so that the powers in sections 31-33 now read “Minister” instead of inspector. It will of course be inspectors acting for the Minister who exercise these powers so for those with the misfortune to be subject to these unchecked powers, there will be no practical difference. The prior wording simply supports the probability that the sweeping powers came from an inspector wish list without regard to our fundamental freedoms.
The Abolition of the Independent Review Board
Under the Hazardous Products Act, State actions and orders affecting private property can be appealed to a Board of Review (see section 8 and 9 of that Act).
An appeal to the Board of Review under the Hazardous Products Act is like an appeal to a Court. The Board of Review has the power to:
- compel witnesses to attend before the Board of Review;
- compel persons to produce documents;
- compel witnesses to testify under oath;
- hire experts to assist it to make a fair determination, and
- employ clerks and court reporters as necessary to ensure a proper hearing.
It is clear that under the Hazardous Products Act property owners are protected by having an independent Board of Review which acts like an independent Court to adjudicate between the State and the property owner. In this way the current system upholds the rule of law.
Bill C-36 does not have the Board of Review procedural safeguard. As outlined in the preceding section, there are two types of orders under Bill C-36 (see ss. 31, 32, and 40). The section 40 orders are a repetition of the power to make orders found in the Hazardous Products Act. However, unlike the Hazardous Products Act, there is no Board of Review.
Under Bill C-36 property owners can ask for a review of inspector’s orders. However, that review is not conducted by an independent Board of Review with Court powers to ensure a fair hearing. Rather, reviews are to be done by “review officers”. Subsection 35(5) suggests that “review officers” will be inspectors other than the inspector who made the original order. This is like asking one police officer to review the order of another police officer in the same department.
The review officer does not have any of the powers the Board of Review has under the Hazardous Products Act. They cannot compel witnesses to testify. They cannot compel the production of documents. They cannot take evidence under oath. They are not given the authority to hire experts.
There is also a very short time limitation in Bill C-36 which may prevent property owners from fairly stating their case. Under the current Hazardous Products Act a person has 60 days to ask for a review. They can ask for a review sooner. However, if they need 60 days to get the necessary evidence together, they can take that time. Under Bill C-36, property owners now only have a maximum of 7 days to put their case together or “any shorter period that may be specified in the order” (see s. 35(2)). Seven days or less is a very short period of time for which to gather and submit evidence for review of decisions that can destroy a business and which can involve the seizure of private property. It is almost guaranteed that this is not sufficient time to obtain and then provide independent testing to challenge an order.
Considering that Health Canada has the discretion to have orders continue in effect while a review is pending, one has to wonder why there is such a limited time in which to ask for a review. What is the downside to the State by a period such as that set out in the Hazardous Products Act?
In assessing the removal of the Board of Review safeguard that we currently enjoy, the question needs to be asked as to: whether it is necessary to restrict property owners to 7 days or less to request a review?
It is also germane to determine why the Review Board safeguard should be removed so that business persons whose businesses may be seized cannot apply to an independent body for a review.
Are the Powers to Take Control of Businesses and to Seize Private Property for Alleged Contraventions Legal?
Section 8 of the Canadian Charter of Rights and Freedoms gives us the right to be free from unreasonable searches and seizures. These rights apply to both individuals and to businesses.
In determining whether State rights to seize property are “reasonable”, Courts have drawn a distinction between administrative and criminal seizures. Administrative seizures are seizures that are necessary for the State to check to see if the rules are being followed. So for example, the taking of samples for testing is generally considered to be a legitimate administrative seizure.
For administrative seizures the State is not taking control of business premises or stock. Rather, small samples are taken to check for compliance. Courts generally do not require search warrants for administrative seizures.
Criminal seizures are seizures made by the State when the State believes that an offence has occurred or is occurring. Criminal seizures usually involve the taking control of private property for evidence and/or to prevent the continuation of an offence. Criminal seizures are by nature intrusive.
Because criminal seizures encroach upon the property owner’s rights, Courts have found that to be “reasonable” criminal seizures can only occur if:
- there is a search warrant or other prior authorization for the search and seizure;
- the warrant or other prior authorization must be given by an independent person who is capable of acting judicially, and
- the issuance of the warrant or other authorization is based on an objective standard. Search warrants cannot be issued because an individual subjectively feels one should be issued.
The leading case on this point is Hunter v. Southam,  2 S.C.R. 145.
Because Bill C-36 allows the State to take control of businesses and to seize property when “the inspector believes on reasonable grounds that there is a contravention of this Act or the regulations in relation to the product”, it probably violates the Charter of Rights and Freedoms.
I suggest that Bill C-36 probably violates the Charter of Rights and Freedoms because it authorizes a criminal seizure without a warrant issued by an independent person based on an objective standard.
It is important to note that an almost identical seizure power was declared unconstitutional in the case of C.E. Jamieson & Co. (Dominion) v. Canada (Attorney General),  F.C.J. No. 826 (T.D.). This means that the Government is currently trying to pass a law giving the State authority to seize private property in a way that has been found to be unconstitutional. When reviewing Bill C-36 the question should be asked as to: why we would support a law which probably violates our right to be free from unreasonable search and seizure?
An ancillary question would be: is it necessary to give up the current protection we have whereby the State has to apply for a warrant prior to seizing our property. In considering this question, it is important to note that it is not difficult for the State to apply for warrants. Indeed, an inspector does not even have to go to Court. They can fax or phone in under what is called the telewarrant process. This process is designed to enable inspectors to act quickly, while at the same time maintaining the rule of law.
The Creation of Administrative Offences
Bill C-36 creates two types of offences: criminal and administrative.
The new administrative offences create some interesting ramifications for property owners.
Section 59 sets out that for administrative offences you cannot defend yourself by saying you exercised due diligence or were honestly and reasonably mistaken.
Due diligence is defined in Black’s Law Dictionary as:
“such a measure of prudence, activity, or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent man under the particularly circumstances”.
All of this means that you can be convicted of an administrative offence even if:
- you were doing everything that a responsible business person would be expected to do, and
- you honestly believed there was no violation of the Acts or Regulations.
Further, to convict you the State does not have to prove guilt on the usual standard of guilt beyond a reasonable doubt. Rather the standard is the lower civil standard of the balance of probabilities (see s. 60). In an obvious conflict of interest, it is the Minister who must prove guilt, adjudicated by another employee of the Minister.
Aside from being convicted and penalized:
- when acting responsibly;
- without knowledge of any wrongdoing, and
- on the lower civil standard of a balance of probabilities,
where the administrative penalties get interesting is that they allow the State to keep private property upon an administrative conviction. This is found at section 64 which provides:
64. Anything seized under this Act in relation to a violation is, at Her election, immediately forfeited to Her Majesty in right of Canada and may be disposed of, at the expense of its owner or the person who was entitled to possess it at the time of its seizure, if
(a) the person is deemed by this Act to have committed the violation; or
(b) the Minister, on the basis of a review under this Act, has determined that the person has committed a violation.
It is the Minister who determines if you are guilty of an administrative offence. Once you are served with a notice of violation you have to request a review by the Minister to contest the charges (see s. 53). You do not get to go to Court to have an impartial Judge determine whether or not you are guilty or innocent. Rather, the Minister makes the decision. Remember it is the Minister who can keep your property if he/she finds you guilty.
Under the administrative provisions you can be fined and have your property permanently taken by the State without a Court finding you guilty. Indeed, you have no right to a Court hearing.
This is in stark contrast to the current Hazardous Products Act under which Courts determine guilt or innocence and property issues.
Administrative violations relate to any violation of the Act or Regulations. There does not have to be a safety risk.
In assessing these administrative provisions there should be dialogue concerning whether the State should be allowed to fine property owners and keep property without determinations of guilt by a Court as is currently required.
Is there a Conflict of Interest: property and administrative fines
We would not tolerate a situation where Judges could personally benefit from property seized from persons in Court, or from the imposition of fines. We would not tolerate this, as it would create an incentive for Judges to seize property and to levy fines. This would remove the impartiality of Judges. It would create a conflict of interest that would not be for the benefit of the citizen. For this reason, we jealously guard judicial independence and impartiality.
It may be that Bill C-36 creates incentives for Health Canada to seize your property and to issue violation tickets.
As outlined above, if you commit an administrative offence, section 64 enables “Her Majesty” to elect to keep seized property connected to the violation. If you are issued a violation ticket and do nothing you are deemed to have committed the violation. If you ask for a review, the review is conducted by a Health Canada employee working for the Minister. If “Her Majesty” means Health Canada, this is a clear conflict of interest. Health Canada decides whether or not you are guilty. If they benefit in any way from a decision to keep property following a determination of guilt, there is a clear conflict of interest.
If you are charged criminally, any fines that are levied by the Court will be paid to the Court Registry (separate from the Judges). There is no benefit for Health Canada for Court fines. However, under Bill C-36 administrative penalties, become the property of “Her Majesty”. They will be paid to Health Canada. If there is not a requirement for this money to be paid into general revenue, completely apart from Health Canada’s budget, there will be a significant conflict of interest. Health Canada will become dependent upon fines to administer Bill C-36 which will pressure them to issue violation tickets to meet their budget. It may be that anticipated fine income has already been worked into internal Health Canada budget estimates.
Similarly, persons charged administratively can ask the Minister to enter into a compliance agreement (see sections 53 and 54). The Minister can require a security deposit as a condition of such an agreement. Under subsection 54(4), the Minister then has absolute discretion to decide whether or not the person has complied with the agreement. There is no appeal if the Minister decides an agreement has not been complied with. If the Minister decides an agreement has not been complied with:
- the security deposit is forfeited to Her Majesty, or
- a penalty of twice the penalty amount on the original violation ticket is owing.
The Minister gets to decide whether the security deposit is forfeited or whether to impose a penalty of twice the original fine amount.
If Health Canada is allowed to use forfeited security deposits or the double penalties which flow from the Minister deciding that an agreement was not followed, this would create a significant conflict of interest under which it would benefit the Minister to find that agreements have not been followed. Remember Bill C-36 does not provide for any review of this finding.
People and organizations eventually do what is in their interest. It is for this reason that Judges can never benefit from their judgements. Unless it is written into Bill C-36 that Health Canada can never benefit from or use seized property, administrative fines, or security deposits, there will be a conflict of interest under which the police (Health Canada) benefit from enforcement activity while at the same time acting as the judges.
Either the Minister has to find you guilty of an administrative offence or the Bill is poorly drafted
If you do not contest an administrative violation, you are deemed to be guilty and subject to the penalties set out in the Bill, including the forfeiture of property. If you do contest an administrative violation, then it is the Minister who conducts the review. This occurs under section 60.
Section 60 has some curious wording. It reads:
In every case where the facts of a violation are reviewed by the Minister, he or she must establish, on a balance of probabilities, that the person named in the notice of violation committed the violation identified in the notice.
This could be read as requiring the Minister to find persons who request reviews guilty. Indeed, that is what the plain language requires. The much more likely possibility is that the section requires the Minister to apply the standard of a balance of probabilities when determining guilt or innocence. It is very likely when read in context, such as with subsection 56(3), that this is the meaning that is intended. If that is the case, then the section should be drafted to prevent any mistake as to its meaning.
To complicate the wording which seems to suggest that all reviews of violations “must” end in a finding the person committed the violation, is the fact that the Bill does not set out what is to happen if a person is found innocent after a review of a violation. For example, section 56 sets out that:
- if after a review the Minister finds the person guilty but finds the monetary penalty on the violation ticket was not in accordance with the Regulations, the Minister is to set the correct penalty. The person is liable to pay the penalty;
- if only the penalty is appealed, the Minister can correct the penalty.
There is no explicit direction under the Bill concerning a finding of innocence.
In my opinion the section is meant to set the burden of proof that applies and that the drafting is simply not clear.
We are Responsible for the Costs of Seizures and Detentions Regardless of Whether the Seizures and Detentions were Justified
There is a long-standing principle in Canadian law that the State cannot take a citizen’s property without compensation. It is also unprecedented for the State to invoice citizens for the State’s cost in seizing our property. Bill C-36 moves away from this tradition with the following provisions:
- s. 21(2)(a) allows the State to take samples for testing “free of charge”;
- s. 24 makes the property owner responsible for the State’s cost in seizing, removing and storing the property owner’s property. Alternately, the State can direct the property owner to move and store the owner’s property at a place directed by an inspector at the owner’s expense;
- s. 26 makes the property owner responsible for the cost of destroying property that is forfeited to the State under that section;
- s. 27 makes the property owner responsible for the cost of destroying seized property following a conviction in court;
- s. 28 makes the property owner responsible for the cost of destroying property seized with consent under s. 28;
- s. 33 makes the property owner responsible for the State’s cost in forcing a recall or taking other measures such as taking control of business premises. This is the case even if it turns out that the State was wrong in forcing a recall or taking other measures, and
- s. 64 makes the property owner responsible for the cost of destroying property that is forfeited to the State following deemed guilt or a finding of guilt by the Minister for a violation.
When one considers that there is no limit to the amount or value of property seized, or for the length of time the State can hold the property, it is clear that the costs to the property owner could be significant. By placing the cost on the property owner, there is no incentive for the State to move quickly concerning stored property, as there is no expense to the State.
Aside from the significant financial damage that persons face if their property is seized and detained, these changes raise some interesting philosophical issues. Under the Hazardous Products Act the State does not currently have the power to charge citizens for the costs of seizing, storing and destroying private property. Are we currently facing such serious safety issues that it is necessary for us to give up the fundamental right we have to compensation if the State takes our property? I look forward to comments on this issue. I also look forward to comments on all of the other issues raised in this Discussion Paper.
Additional Costs and Responsibilities for Small Businesses
Bill C-36 will impose additional costs and responsibilities on small businesses. Unlike the Hazardous Products Act in which the responsibilities of businesses are clear, Bill C-36 introduces uncertainty.
The uncertainty begins with the following definition in section 2:
“danger to human health or safety” means any unreasonable hazard – existing or potential – that is posed by a consumer product during or as a result of its normal or foreseeable use and that may reasonably be expected to cause the death of an individual exposed to it or have an adverse effect on that individual’s health – including an injury – whether or not the death or adverse effect occurs immediately after the exposure to the hazard, and includes any exposure to a consumer product that may reasonably be expected to have a chronic adverse effect on human health.
This definition is crucial as it affects the responsibility of all businesses connected with consumer products.
Unfortunately, the definition is convoluted and unclear. To make it more manageable I think that it is fair to distil it as follows:
“danger to human health or safety” means:
any unreasonable hazard posed by a consumer product during normal use, which may reasonably be expected to:
cause death or an adverse effect on health, including injury, and
includes any exposure to a consumer product that may reasonably be expected to have a chronic adverse effect on human health.
The first problem with the definition is that it is unclear what “unreasonable” means. Read in the context of the definition it seems that an “unreasonable hazard” includes the hazard that over the life of a consumer product can be reasonably expected to cause an injury of any type. The definition includes the words “or have an adverse effect on that individual’s health – including an injury”. Injury is not qualified by words such as “serious” so it means any injury, however trivial.
The second problem with the definition involves the last part reading:
and includes any exposure to a consumer product that may reasonably be expected to have a chronic adverse effect on human health.
The word “chronic” is not defined leaving us with normal dictionary meanings such as constant or continuing over a long time. “Adverse effect on human health” is not defined or qualified. We are left with any adverse health effect whether great or small. The only qualifier is “chronic” so the injury must continue for a long time.
It appears that the words “danger to human health or safety” could include any injury, however small, caused by a consumer product over the expected life and use of the product.
Are many Consumer Products Banned?
Section 7 bans manufacturers or importers from manufacturing, importing, advertising or selling consumer products that are a “danger to human life or safety”
Section 8 prohibits anyone from advertising or selling a consumer product that they know is a “danger to human life or safety”. Selling includes distributing.
Because “danger to human life or safety” as defined by Bill C-36 probably includes any injury, however small, caused by a consumer product over the expected life and use of the product, it may be that many consumer products will have to be removed from the market. The most obvious examples are sports equipment. For example, I live near a ski hill and my family skis and snowboards. I can say from experience that exposure to skis and snowboards leads to injuries. Any admissions clerk at a hospital near a ski hill will tell you the same. Under the current definition of “danger to human life or safety”, the advertising and sale of snowboards is probably an offence.
It is unrealistic to think that the intent of Bill C-36 is to prohibit the manufacture, distribution, advertising and sale of sports equipment. However, that may be an unintended consequence caused by the convoluted definition of “danger to human health or safety” in section 2.
Orders to Test, Research and provide Documents without any indication of risk
Under section 12 the Minister can order any manufacturer or importer of a consumer product to conduct tests, compile information, and produce documents to verify compliance or prevent non-compliance with the Act or Regulations.
This could be a useful tool for the Minister to manage risk. It should be noted, however, this section allows the Minister to offload testing costs upon any manufacturer or importer. Further, the Minister can order any testing, even if the testing is not connected to safety, or will not address any safety concern. Finally, the Minister does not have to have any evidence of a safety concern before making an order. The concern is that small businesses targeted under this section could be financially crippled when there are no safety concerns.
Other sections of the Bill enable inspectors to attend at business premises, make inspections, copy documents, and take samples for testing. It may be that section 12 is not necessary, or in the very least should be amended so that its use is limited to where there is evidence of a concern which would require testing or the compiling of documentation.
The 6 Year Documentation Burden
Section 13 of the Bill requires anyone who manufactures, imports, advertises, sells or tests a consumer product to maintain documents.
For each consumer product retailers must keep:
- the name and address of the person from whom they obtained the product;
- the location where and the period during which they sold the product, and
- documents to be prescribed by the regulations yet to be introduced.
For each consumer product manufacturers, importers, advertisers or testers must keep:
- the name and address of the person from whom they obtained the product;
- the name and address of the person to whom they sold the product, and
- documents to be prescribed by the regulations yet to be introduced.
These documents must be keep at the place of business or any other place to be prescribed in the regulations.
These documents must be kept for a minimum of 6 years after the end of the year to which they relate, or to any other period that may be set out in the Regulations.
Bill C-36 is imposing documentation requirements on all businesses, small and large that deal with consumer products. The documentation requirements are imposed across the board with no exemption for small businesses or businesses in low risk areas.
One has to wonder why the government is imposing document requirements on extremely low risk businesses. Dollar stores for example are going to be saddled with large record requirements despite carrying low risk products.
The Reporting to the Minister Burden
Section 14 requires anyone who manufactures, imports or sells a consumer product to report to the Minister whenever there is an “incident”. An “incident” includes:
(a) an occurrence in Canada or elsewhere that resulted or may reasonably have been expected to result in an individual’s death or in serious adverse effects on their health, including a serious injury;
(b) a defect or characteristic that may reasonably be expected to result in an individual’s death or in serious adverse effects on their health, including a serious injury;
(c) incorrect or insufficient information on a label or in instructions – or the lack of a label or instructions – that may reasonably be expected to result in an individual’s death or in serious adverse effects on their health, including a serious injury, and
(d) a recall anywhere in the world ordered by a government or public body.
Using the ski and snowboard example, this would require the ski shop, the distributor, and the ski manufacturer, to report to the Minister every time they become aware of a serious injury caused by a ski or snowboard accident. This reporting obligation appears to apply even when the retailer, manufacturer, distributor or importer did not deal with the specific product subject to the incident. Dealing with the same type of product probably engages the reporting requirement.
Ski shops, distributors, and manufacturers will also be required as soon as Bill C-36 passes to report to the Minister concerning every snowboard. They all have edges which is a “characteristic that may reasonably be expected to result in…a serious injury”. Indeed, not only is this characteristic reasonably expected to result in a serious injury, but as any hospital admissions clerk will tell you, it regularly does.
Section 14 also requires manufacturers and importers following an incident to also report to the Minister concerning any products they manufacturer or import that could be involved in a similar incident. They also have to report “any measures they propose to take with respect to those products”. Staying with the snowboard example, this may require a snowboard manufacturer to identify for the Minister all of their snowboard models and “any measures they propose to take with respect to those products”. Presumably such measures will be measures that are sufficient to make snowboards safe.
The disclosure of confidential business information
Under section 16 the Minister is permitted to disclose confidential business information relating to a consumer product to any person or government that carries out functions relating to the protection of human health or safety or the environment. This includes corporations. The Minister does not need the consent of the person or business to whom the confidential business information relates. Nor does the Minister need to notify the person or business that the Minister has released their confidential information.
The only requirement on the Minister is that the recipient agrees in writing to keep the information confidential.
Note, there does not have to be a safety concern or issue before the Minister discloses confidential business information.
This is a departure from the Current Hazardous Products Act which prevents the Minister from disclosing confidential information that the Minister forces to be disclosed under that Act.
Section 17 permits the Minister to disclose confidential business information to anyone, including the public, about a consumer product that is a serious and imminent danger to health, safety or the environment, if the disclosure is essential to address the danger.
Retailers and distributors become responsible for ensuring instructions and labelling are sufficient
Section 14 requires anyone who manufactures, imports or sells a consumer product to report to the Minister whenever there is an “incident”. An “incident” includes:
incorrect or insufficient information on a label or in instructions – or the lack of a label or instructions – that may reasonably be expected to result in an individual’s death or in serious adverse effects on their health, including serious injury.
Section 14 requires persons who sell consumer products, including distributors, to report any “incident” to the Minister within two days after the day on which they become aware of the incident. Because the section places a positive obligation to report incidents, retailers and distributors may be ill-advised to try to avoid this requirement by being wilfully blind (i.e. not reading packaging and instructions).
Failure to report to the Minister incorrect or insufficient information on a label or instructions is an offence under section 41. Every day that goes by without reporting to the Minister is a separate offence (see section 44).
There does not seem to be any allowance for the fact that many retailers and distributors will not be qualified to assess whether the labelling or instructions on consumer products are sufficient.
I do not practice in the area of product liability and civil law, and cannot say whether the legal burden on retailers and distributors concerning the adequacy of labelling created by Bill C-36 could subject them to liability in civil suits.
The Corporate shield is removed and Directors and Officers are liable for Company Offences
Section 42 provides:
42 If a person other than an individual commits an offence under this Act, any of the person’s directors, officers, agents or mandataries who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to the offence and is liable on conviction to the punishment provided for by this Act, even if the person is not prosecuted for the offence.
Section 61 provides:
61 If a person other than an individual commits a violation under this Act, any of the person’s directors, officers, agents or mandataries who directed, authorized, assented to, acquiesced in or participated in the commission of the violation is a party to and liable for the violation whether or not the person who actually committed the violation is proceeded against in accordance with this Act.
- section 44 makes every day an offence continues to be a separate offence, and
- the penalties can exceed five million dollars for each offence,
the personal liability faced by directors, officers and agents is significant.
Subjecting Directors, Officers and Managers to multi-million dollar fines and imprisonment without the right to cross-examine the accusers
Depending on the charges and facts involved, penalties for convictions in Court can exceed five million dollars per offence, and/or up to five years of imprisonment per offence.
As outlined above, directors, officers and managers can be charged for offences committed by companies they work for.
As outlined in the Warm Buddy example, it will be very easy for directors, officers and managers to commit offences, simply by seeking to balance their fiduciary duties and by seeking legal advice before taking action.
As outlined above, every single day a violation takes place is a separate offence.
For criminal charges under Bill C-36, persons charged will be presumed to be innocent. They will have an impartial Court. The State will have to prove they are guilty beyond a reasonable doubt.
The change will be that they may not have the opportunity to challenge accusers, such as inspectors in Court with cross-examination.
Section 47 provides:
47(1) In proceedings for an offence under this Act, a declaration, certificate, report or other document of the Minister or an inspector, analyst or review officer purporting to have been signed by that person is admissible in evidence without proof of the signature or official character of the person appearing to have signed it and, in the absence of evidence to the contrary, is proof of the matters asserted in it.
Section 47 enables the State to present its entire case in writing. Every Health Canada person involved can put their evidence in writing and it is “proof of the matters asserted in it” unless there is evidence to the contrary. The scope of this is unprecedented. It is not uncommon for there to be evidentiary shortcuts for experts, such as analysts, so that they do not have to come to Court for things that are not contentious, such as the amount of alcohol in blood (to give a Criminal Code example). Evidentiary shortcuts in criminal matters almost always have a provision to enable a defendant to require the attendance of prosecution witnesses for cross-examination, if this is necessary for a fair defence. There is no such provision in Bill C-36.
Under Bill C-36, the State could enter into evidence assertions by Health Canada inspectors, which will be presumed to be true. Without any witnesses testifying, you could find yourself in a situation where without leading evidence to the contrary you could be ruined financially or imprisoned for long periods of time, without ever having the right to test the evidence with cross-examination. This is unprecedented.
I can think of no reason why this is necessary to address consumer safety.
Officers, directors, managers and employees could be very surprised with debts owing to Health Canada years after they have left the company
As indicated above, officers, directors, and managers are personally liable for conviction and administrative violation penalties. For court proceedings, charges can be laid up to two years after the Minister became aware of the violation in the case of charges proceeding summarily. For proceedings by indictment, there is no time limit.
Administrative violation proceedings can be commenced up to six months after the Minister became aware of the violation.
Fines and penalties are debts owing to the State (see section 57). The State can register the debts in the Federal Court, and take collection proceedings in the Federal Court (see section 58). The State has up to five years after a debt is incurred to start collection proceedings (see section 57).
Persons who were directors, officers or managers could find themselves facing collection proceedings for which there is no review (see section 57) years after they have left a company, and long after they are covered by any insurance for being a director, officer, or manager.
Allowing Trade Agreements to become law without Parliamentary Review
Section 2 includes following definition of “government”:
“government” means any of the following or their institutions:
the federal government;
(a) a corporation named in Schedule III of the Financial Administration Act,
(b) a provincial government or a public body established under an Act of the legislature of a province,
(c) an aboriginal government as defined in subsection 13(3) of the Access to Information Act,
(d) a government of a foreign state or of a subdivision of a foreign state, or
(e) an international organization of states.
Defining “government” to include foreign states or international organizations of states such as the United Nations, is important because section 37 adds the following to the regulation making power of the federal government:
37(2) A regulation made under this Act may incorporate by reference documents produced by a person or body other than the Minister including by
(a) an organization established for the purpose of writing standards, including an organization accredited by the Standards Council of Canada;
(b) an industrial or trade organization; or
(c) a government.
37(4) A regulation made under this Act may incorporate by reference documents that the Minister produces jointly with another government for the purpose of harmonizing the regulation with other laws.
These additions allow the federal government to make documents prepared by foreign governments or bodies law in Canada by simply passing a regulation incorporating the document
Just so that everyone understands what this means I will explain the difference between Acts and Regulations. Acts are documents introduced into either the House of Commons or the Senate. They must pass three readings in both the House and the Senate before they can become law. This process ensures that Canadians and their representatives become aware of proposed changes, have them debated in Parliament, and have time to contest them.
Regulations on the other hand are simply published in the Canada Gazette twice and then can be signed into law. Parliament does not vote on regulations.
This change to allow the federal cabinet to incorporate documents from foreign governments or organizations as law by referring to them in regulations will remove Parliamentary scrutiny on issues that could fundamentally change the ground rules for the consumer product industry.
These sections are almost identical to corresponding sections in the former Bill
C-51. Clauses are not inserted into Bills by accident. Because these clauses were not added by accident, the questions are raised:
what purpose is served by removing Parliamentary scrutiny to the adoption of documents from foreign governments and institutions into Canadian Law, and
does the federal cabinet already have specific foreign documents or agreements in mind?
I look forward to feedback on this issue.
The Gross Encroachment into Provincial Jurisdiction
Our Constitution creates a federal system under which the federal and provincial governments have different areas within their jurisdiction. The Federal Government does not have jurisdiction over “consumer products”. Indeed, consumer products fall squarely within the jurisdiction of the provinces over “property and civil rights in the Province” (section 92 of the Constitution Act, 1867).
Bill C-36 is actually an exercise by the Federal Government of their criminal law power (section 91 of the Constitution Act, 1867). However, to be a valid exercise of the criminal law power, the law has to cover “criminal” matters. So for example, the parts of the Bill that prevent fraudulent labelling or advertising would probably be upheld as valid criminal matters, as courts have long held the prevention of “fraud” as a valid exercise of the criminal law power.
Bill C-36 does not focus on fraud. It is rather, an attempt by the Federal Government to manage all consumer products, regardless of risk. In effect, the Bill places a new structure on “all” consumer products regardless of risk. Unlike the Hazardous Products Act which only covers risky products, Bill C-36 covers all consumer products. In effect the Federal Government is imposing a new regulatory structure in an area that is clearly within provincial jurisdiction. The question is: is this constitutional?
For the Federal Government to regulate a class of goods, in this case all consumer products, under the federal criminal law power, the goods have to carry enough of a risk to be considered criminal. If there was not a significant risk threshold before the Federal Government could encroach upon the Provinces’ jurisdiction, then there would be no area of provincial jurisdiction that the Federal Government could not take over simply by classifying it as “criminal”.
For example, the Federal Government outlawed margarine saying it was necessary for public health. In reality, the law simply protected the dairy industry from competition. The Supreme Court of Canada had to determine whether the margarine ban was a valid exercise of the criminal law power (Reference re: Dairy Industry Act (Canada),  S.C.R. 1). In finding that the law was not valid, the Court commented on how it was not enough to simply declare something illegal. If the Federal Government could regulate in areas of provincial jurisdiction simply by declaring something to be illegal, then the Federal Government could encroach upon provincial jurisdiction where there was not really harm to be addressed. For example, Locke J. Held:
…The fact that Parliament has declared that the manufacture, importation and sale of a healthful, nutritious food is a crime, does not relieve us of the necessity of inquiring into the real nature of this legislation. The determination of that question does not turn on the language used by Parliament but on the provision of the Imperial Statute of 1867…It may be observed that if it is within the power of the Dominion [Federal Government] to prohibit the manufacture and sale of this valuable and harmless article of food in the provinces of Canada by simple expedient of declaring these acts to be criminal offences, Parliament might with equal force prohibit the production and sale of milk or the keeping of cattle or the growing of wheat or the manufacture of flour. In my opinion, this is not in pith and substance criminal legislation….
A more recent example of this “harm threshold” can be found in the case of R. v. Malmo-Levine; R. v. Caine,  S.C.J. No. 79. In that case the Supreme Court of Canada was asked to declare that the Federal Government did not have jurisdiction to declare the simple possession of marijuana to be illegal. It was argued that simple possession was in effect a victimless crime in which there was not enough harm for it to be illegal. The Court disagreed finding that vulnerable groups such as youths, schizophrenics and pregnant women were at risk from marijuana. In effect, marijuana carried enough of a risk to be considered a valid exercise of the criminal law power.
The problem with Bill C-36 is that it applies to “all” consumer products, regardless of the risk that they carry. It is not clear that the Federal Government has the jurisdiction to regulate non-risky consumer products under the criminal law power. Indeed, as drafted Bill C-36 poses a significant and intrusive encroachment into the Provinces’ jurisdiction over property and civil rights.
The contrast between Bill C-36 and the Act it is “updating”, the Hazardous Products Act (the “HPA”), could not be more clear. The HPA only applies to “hazardous” products. Under the HPA, the Minister can only do things like issue interim orders if there is a “significant” risk. The HPA is clearly written to make it clear that it is only covering consumer products that are hazardous. Because the HPA is written with a clear risk threshold, it is probably a valid exercise of the criminal law power.
By contrast Bill C-36 regulates “all” consumer products regardless of risk. Consumer products which clearly are not hazardous, are subject to its terms. Bill C-36 does not draw a distinction between hazardous and non-hazardous products in imposing obligations on manufacturers, distributors, and vendors. Bill C-36 sets a precedent which renders the Dairy Reference case meaningless.
If the provinces allow the Federal Government to control all consumer products, regardless of risk, then it begs the question what other areas of provincial jurisdiction the Federal Government will not be able to over-ride by passing a criminal law.
It may be that provinces that have traditionally fought for provincial rights such as Quebec and Alberta are no longer concerned about giving up provincial jurisdiction to the Federal Government. Citizens should, however, be aware Bill C-36 represents a significant and wide-spread assumption of power in the area of property and civil rights by Health Canada.
Secrecy: hidden orders exempted from the Statutory Instruments Act
The Statutory Instruments Act is meant to protect Canadians by making sure that orders such as those permitted by Bill C-36 are scrutinized and published. When sweeping powers such as those in Bill C-36 are given, two of the checks and balances built into our system through the Statutory Instruments Act are that orders:
- are reviewed to ensure they:
(a) do not constitute an usual or unexpected use of the power;
(b) do not trespass unduly on existing rights and freedoms, and are not inconsistent with the provisions of the Canadian Charter of Rights and Freedoms and the Canadian Bill of Rights, and
- are published in the Canada Gazette so that the public can scrutinize how the order making power is being used. If the exercise of power is done in secret, there can be no public scrutiny.
The powers in Bill C-36 to take control over unlimited private property without any Court supervision are unprecedented. If ever there was the need for the procedural safeguards of (1) review and (2) publication, it is for Bill C-36 Orders.
Unfortunately, section 68 of Bill C-36 exempts orders, except s. 40 orders (Ministerial Orders that must be tabled in Parliament), from the Statutory Instruments Act. Section 68 reads:
68. For greater certainty, orders made under this Act, except under section 40, are not statutory instruments within the meaning of the Statutory Instruments Act.
But for section 68, Bill C-36 orders for recalls, or the seizure and control over private property are statutory instruments covered by the procedural safeguards found in the Statutory Instruments Act.
As outlined in the Warm Buddy example above, Bill C-36 enables Health Canada to take control of a business, destroy its stock, and impose administrative violation penalties without any independent review by a Court or a Review Board. Section 68 ensures that this occurs without the public or Parliament being aware of the orders. They are not subject to review. They do not have to be published.
It may be that the more sweeping the power, the more important it is for it to be exercised in a public fashion to ensure it is not abused. I would appreciate feedback on this point, as I am having difficulty seeing how this exemption from the Statutory Instruments Act serves any safety purpose. We are dealing with orders under which the State takes control over private property without Court supervision and without any checks and balances. How does the exempting these orders from review and publication serve a safety interest?
Assessing the Act without the regulations – what will the burden and costs really be?
On the face of the Bill, it is clear that every person working with consumer products will have the added expense and burden of:
- the record keeping required by section 13 (records of who consumer products were obtained from, where and when they were sold, and documents to be prescribed by regulations yet to be introduced);
- reporting incidents to the Minister under section 14.
It is clear from the Bill, however, that there will be other requirements imposed by regulation. For example:
- section 6 prohibits any dealing with consumer products that do not “meet the requirements set out in the regulations”;
- section 9 prohibits packaging and labelling that is misleading “regarding its certification related to its safety”;
- section 13 refers to the keeping of “the prescribed documents” (i.e. documents to be revealed in the regulations);
- subparagraph 37(1)(f) enables the Minister to make regulations “respecting the designation or recognition of persons or classes of persons who would be authorized to certify that a consumer product or class of consumer products meets the applicable requirements and respecting their functions in relation to that certification”
- as outlined above, section 37 also enables the Federal Cabinet to adopt foreign laws or agreements as regulations that apply to consumer products.
Bill C-36 is clearly anticipating requirements set out in regulations that will:
- need to be followed for it to be legal to manufacture or sell a consumer product;
- require certification, either of Canadian or international standards;
- impose document requirements not set out in the Bill.
Because the Bill is clearly anticipating these things, the regulatory plan should be unveiled now, so that Parliament and the public can view the changes Bill C-36 will bring about in their entirety. As matters now stand, we cannot comment on the reasonableness or on the costs the undisclosed regulations will impose.
It is unknown if down the road Health Canada will seek some form of cost recovery from the industry for the costs of administering Bill C-36. It would be interesting to see their internal documents concerning funding for the administration of the Bill. Based upon my understanding of Health Canada, they will not be proceeding with this legislation without some expectation of cost recovery from the industry. It may be, as outlined above, that the cost recovery is to come from administrative penalties.
The difficulty with “safety”
When a Bill is presented as a “safety” Bill, it is difficult for MPs or the media to oppose the proposed law. It is probably safe to assume that MPs are reluctant to oppose “safety” legislation because it could look bad. How can MPs fail to support laws meant to protect vulnerable Canadians? How can the media criticize laws meant to protect us? The point is that it is difficult to oppose legislation being sold as “safety” legislation.
MPs back “safety” legislation because they believe that we want them to do all they can to protect us. Usually this is not a problem. The difficulty arises when a law such as Bill C-36 is being sold as a “safety” law, but the sweeping encroachment on our freedoms actually presents a danger in and of itself. Unless the citizens communicate that they want their rights protected, MPs may not protect them. Remember that Bill C-36, when called Bill C-6, passed the House of Commons with the support of all four parties.
Whereas there is always room to improve upon legislation such as the Hazardous Products Act, surely meaningful improvements can be made that respect the fundamental rights and freedoms that define us as a society. If we truly want to be safe, we must insist that our “safety” legislation respects our fundamental principles.