Originally published in Blakes Bulletin on White Collar
Crime, May 2010
In an effort to deter and punish white collar crime, the
Government of Canada has re-introduced legislation that will
provide for tougher sentences for convictions involving fraud. Bill
C-21: An Act to Amend the Criminal Code (Sentencing for
Fraud) was introduced on May 3, 2010 (to view Bill C-21, House
of Commons, First Reading, May 3, 2010 online, click here). Bill C-21 is a re-introduction of Bill
C-52: An Act to Amend the Criminal Code (Sentencing for
Fraud), which did not become law before the prior session of
Parliament ended on December 30, 2009.
The re-introduced legislation again proposes significant changes
to white collar criminal sentencing involving sentencing length,
sentencing factors, and a requirement to consider restitution.
According to Statistics Canada, there were 10,001 cases of fraud
across Canada between 2006 and 2007 in which the accused was found
guilty. (For further information see Statistics Canada, CANSIM,
Table 252-0046, "Adult criminal court survey, number of guilty
cases, by type of sentence, annual." A footnote to the table
explains that because "[c]ases can have more than one sentence
... sanctions ... will not add to 100%". Data in CANSIM is
derived from the Adult Criminal Court Survey.) A recent guilty plea
by former Montréal investment advisor Earl Jones and an
alleged C$100-million Ponzi scheme in Calgary have again brought
increased public awareness of fraud in Canada.
A key component of Bill C-21 is that it proposes mandatory jail
sentences of at least two years for fraud involving more than
C$1-million. In addition, where there are multiple fraud
convictions, each for less than C$1-million but totalling in
aggregate more than C$1-million, the minimum sentence is still to
At present, section 380.1(1) of the Criminal Code of
Canada (the Criminal Code) provides for a number of
aggravating circumstances that a judge must consider when
determining a sentence for fraud. Through Bill C-21, the government
proposes to add additional sentencing factors that a judge must
consider in determining a sentence for fraud (for a description of
current sentencing factors, please see
Sentencing Options for White Collar Criminal Offences). The new
aggravated factors to be added to the existing aggravating
circumstances presently in section 380.1(1) include:
the financial and psychological impact of the fraud on the
victim, given the victim's particular circumstances, including
their age, health and financial situation;
the offender's failure to comply with applicable licensing
rules or professional standards; and
the magnitude, complexity, and duration of the fraud and the
degree of planning that went into it (to view Department of
Justice, "Government of Canada Introduces Legislation to Stand
Up for Victims of White-Collar Crime" (May 3, 2010) online,
As a consequence of the proposed new aggravated factors, judges
will have an increased ability to impose stiffer sentences for
white collar criminals. Examples include:
where a fraud was perpetrated against elderly investors without
the means to regain their former income;
where a fraud was purported by an individual who did not follow
professional licensing rules or professional standards (for
example, a securities broker, lawyer or accountant); and
where a large fraud transpired or one that occurred over a
substantial period of time.
Under section 740 of the Criminal Code, judges have a
discretionary ability to order that restitution be paid to a
victim. If passed, Bill C-21 would require that the judge consider
a restitution order. Moreover, Bill C-21 would require the court to
ask the prosecutor whether victims were given an opportunity to
indicate whether they were seeking restitution. In addition, if a
restitution order was not made, Bill C-21 would amend the
Criminal Code to impose an obligation on judges to give
reasons that are to be stated in the record as to why a restitution
order was not imposed. As a result, if successfully enacted, Bill
C-21 is likely to have the effect of increasing the frequency of
restitution orders in Canadian fraud convictions.
Bill C-21 will still need to go through Second Reading, a
Committee Report and Third Reading before it will become law.
Bill C-21 is an important development in the area of white
collar crime. Historically, Canada has lagged behind the United
States in both enforcement and sentencing of white collar crime.
With the May 3, 2010 re-introduction of proposed amendments to the
Criminal Code, the government has signaled its clear
intention to strengthen the public's protection against white
collar crime and to move closer towards the U.S. sentencing
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