A proposal by Justin Trudeau’s government to allow companies to escape serious criminal charges in certain cases of wrongdoing is being panned by critics who say it will weaken corporate accountability in Canada.
Buried near the end of the Liberal government’s 582-page budget legislation is an amendment to the Criminal Code that would allow prosecutors to seek what is referred to as a “remediation agreement” with a company that has broken the law.
Under the agreement, companies can escape criminal charges, like bribery, corruption and insider trading, if the organization comes forward to self-report corporate crimes. Prosecutors would consider whether a company has admitted responsibility, paid fines or taken disciplinary action against the employee involved in breaking the law.
Duff Conacher, co-founder of Democracy Watch, said while there should be a plan for companies to come forward and self-report crimes, they should not escape prosecution entirely.
“It amounts to letting them off the hook,” he said. “Corporate executives will not think about committing crimes as much because they will be able to escape penalty.
Conacher said that companies who have been prosecuted criminally can be barred from bidding on World Bank projects and Canadian government contracts.
“That standard for the World Bank is there for a reason, to discourage corporate crime,” he said. “If they make this change, they are removing a key incentive for corporations to comply with laws.”
Penelope Simons, a professor of law at the University of Ottawa, said it would be “very problematic” if those who escaped sanctions for economic crimes were allowed to compete for public contracts.
“We already don’t sanction corporations sufficiently and this plays into that,” she said. “It certainly doesn’t send a good message.”
The proposed change in law caught some federal lawmakers by surprise, including Liberal members, who are studying the broader budget bill as part of a parliamentary committee.
“I do have some serious questions about this,” said Liberal MP Greg Fergus who told a House of Commons Committee last week he said the deferred prosecution provision amounted to a “slap on the wrist.”
“It seems we’re letting those with the means have an easier time of it than those who don’t have the means.”
David Taylor, a spokesman for Justice Minister Jody Wilson-Raybould, said the agreement was created to protect “innocent third parties” like employees, suppliers, pensioners and investors who can be affected when a company is prosecuted for breaking the law.
“Our Government introduced legislation that will give prosecutors one more tool – a made-in-Canada remediation agreement regime – to use at their discretion to address corporate crime, which includes ensuring victims are compensated for the harm caused,” Taylor said in an email.
Conacher also took issue with the transparency of this change which was mentioned on page 528 of the nearly 600-page document.
“It shows the power of the big business lobby over the federal Liberals. Not only did they win this change, they won it, essentially, secretly buried in the budget bill,” Conacher said. “It also shows how much the Liberals want to avoid being seen in the pocket of big business lobbyists.
*With files from The Canadian Press