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CIVIL FORFEITURE IN CANADA
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Foreword
You may not know anything about “civil forfeiture laws.” And you may see no reason to change that. These laws sound like something that only affects criminals, and indeed that was how they were initially sold to the public: as a means for government to take criminals’ property and fight organized crime. Unfortunately, civil forfeiture laws allow provincial governments to seize property not only from criminals, but also from people who have never been charged with, or even suspected of, a crime. All the government has to show is that the property at issue was used by someone (anyone) as “an instrument of crime,” or was “the proceeds of crime” and they may take that property from its rightful owner with no compensation. These laws are not fair.
Canada’s provincial civil forfeiture laws were originally intended to deter crime and compensate victims. In Canada today, civil forfeiture is not exclusively used to satisfy these objectives. It has instead become a supplement or alternative to the criminal law. This transformation has had a profound impact on many of the most important rights enjoyed by Canadians. Revenues generated through successful forfeiture proceedings are returned to provincial governments and their law enforcement agencies. This incentivizes these authorities to seek the forfeiture of ever more property without regard to the original objectives of deterring crime and compensating victims. Forfeitures are now sought for the purpose of raising funds. Ontario often seeks the forfeiture of property on the merest suspicion of an unlawful act—at times even seeking the forfeiture of property belonging to individuals known to be innocent of unlawful acts. In B.C., the government often seeks the forfeiture of highly valuable assets for relatively insignificant offences. And other provinces—with few exceptions—seem poised to follow Ontario’s and B.C.’s lead on this.
WHAT IS CIVIL FORFEITURE?
Canada’s civil forfeiture laws allow provincial governments to seize and transfer ownership of property without compensation when the property is suspected of being used to commit an illegal act or is suspected of having been acquired by committing an illegal act. Originally intended to make committing such illegal acts less profitable and to provide compensation to victims, Canada’s civil forfeiture laws rarely accomplish these stated goals and are fraught with irreparable problems. There are eight provinces in Canada that have civil forfeiture laws on the books. Ontario was the first to enact this sort of legislation in 2001 with Alberta following shortly after in the same year. Other provinces soon enacted similar laws: Manitoba (2004), British Columbia (2005), Saskatchewan (2005), Nova Scotia (2007), Quebec (2007), and New Brunswick (2010). To date, Prince Edward Island and Newfoundland and Labrador have not enacted civil forfeiture statutes. Also, not one of the territories has yet enacted similar legislation. The provinces routinely use their civil forfeiture laws to circumvent important procedural protections that have been developed for centuries by the courts and our Common Law tradition. Because of this, these laws represent a profound reversal of many important legal rights. In 2001, before Ontario passed its legislation, Karen Selick—former litigation director for the Canadian Constitution Foundation (and in 2003 a founding director of the Canadian Justice Review Board) —testified before a legislative committee about the dangers of civil forfeiture laws. She warned that “this bill will give the government a stake—a very big stake—in the continued existence of organized crime. In effect, it will make the government a senior silent partner to organized crime”. Ms. Selick’s warnings went unheeded. Civil forfeiture proceedings are initiated “against the thing” instead of “against the person”. Courts have characterized this type of proceeding as in rem (against the object), as opposed to in personam (against the person). This is why civil forfeiture cases from Canada, and elsewhere, name the property at issue as the defendant.
Some examples of civil forfeiture cases: ? Ontario (Attorney General) v. 714 Railton Avenue; ? Ontario (Attorney General) v. $29,020 in Canadian Currency; ? United States v. Approximately 64,695 lbs of Shark Fins; and ? United States v. Article Consisting of 50,000 Cardboard Boxes More or Less, Each Containing One Pair of Clacker Balls. In rem legal proceedings have a long history in the Common Law. In feudal England, a person’s property was the object of forfeiture to the Crown when the property was the instrument of a human fatality. That royal cause of action was known as “deodand” and was based on the religious belief that objects that cause death are somehow tainted by wrongdoing. Under the law in feudal England, the property was figuratively “given to God”, yet it was the Crown who confiscated title. By the nineteenth century, deodand forfeitures simply became another source of Crown revenue until their abolition in 1846. Canada’s provincial civil forfeiture laws require that the Crown establish its case relying upon a relatively low standard of proof. In a criminal proceeding, a court must be satisfied that the accused is guilty beyond a reasonable doubt. But in a civil forfeiture proceeding, the Crown only need prove its case on the balance of probabilities. This reliance upon a low standard of proof creates a dilemma. Criminal proceedings can be lengthy and difficult to prosecute, whereas civil forfeiture proceedings are relatively easier due to the lower standard of proof. The result is that the provinces often choose to initiate civil forfeiture proceedings against individuals in circumstances where there is not enough evidence to merit criminal charges, let alone result in a conviction. A province may initiate a civil forfeiture proceeding using an expedited legal process called an application. In Ontario, the process begins when police submit a case to the Crown. If the decision to proceed is made, the Crown can ask a judge to forfeit the property in question on application to a court. If the judge is convinced on the balance of probabilities, the property owner is stripped of his property and it is transferred to the Crown without compensation.
Many legal scholars in Canada were initially skeptical of the constitutionality of civil forfeiture laws since these laws have many of the same characteristics as criminal law. Under section 91(27) of the Constitution Act, 1867, the federal government has exclusive authority to enact criminal laws, and it was therefore unclear whether civil forfeiture legislation was within provincial jurisdiction. In 2009, Robin Chatterjee challenged the constitutionality of Ontario’s civil forfeiture law at the Supreme Court of Canada (SCC). He argued that the Civil Remedies Act was criminal legislation and therefore outside of Ontario’s jurisdiction. Chatterjee was found in possession of $29,020 in cash and equipment suspected to be used for cultivating marijuana. Police seized the cash and equipment even though no drugs were found and Chatterjee was not charged with any related criminal offence. The SCC upheld Ontario’s civil forfeiture law, finding that it was remedial, not criminal, in nature. And so Chatterjee’s constitutional challenge failed. Despite the SCC deciding otherwise, the philosophical foundation of civil forfeiture is inseparably tied to criminal law. While it was being ushered through the Ontario legislature by then Attorney General Jim Flaherty, civil forfeiture was touted as a means to make crime less profitable and to help alleviate the social costs of criminal activities borne by victims. This is evident from the original title of Ontario’s legislation when it was first introduced: the “Remedies for Organized Crime and Other Unlawful Activities Act”—now amended to the “Civil Remedies Act”. The title was amended to its current form in 2007 as Chatterjee’s constitutional challenge was working its way up through the Ontario Courts. Some other provinces’ legislation still bears a similar reference to criminality: Manitoba’s legislation is called the “Criminal Property Forfeiture Act” and Saskatchewan’s the “Seizure of Criminal Property Act”. In practice, Canada’s provincial civil forfeiture laws most often function as a supplement or alternative to criminal law and it’s difficult to understand how the two could be viewed as entirely distinct.
You can lose your property and be completely innocent?
No province requires that individuals whose property is targeted by civil forfeiture proceedings be convicted of or even be charged with committing an illegal act. In fact, section 2 of New Brunswick’s law states this explicitly, and even adds that an individual acquitted of committing an illegal act may still face civil forfeiture proceedings. This means the provincial Crowns may seek the forfeiture of property belonging to individuals who have not been convicted of committing an illegal act. Other owners subject to forfeiture applications may lose their property merely for being suspected of and yet never charged with committing an illegal act. And still others might be completely innocent third parties. In Alberta, if a property owner appears in court to oppose a forfeiture application against his property, he is required to be cross-examined by the Crown’s lawyers upon request. This can lead to so-called “fishing expeditions” for evidence about the property owner’s involvement in any illegal activity, and this evidence may be used against the property owner in a subsequent criminal proceeding. All of this seems contrary to the procedural protections in subsections 11 (c), (d), and (h) of the Canadian Charter of Rights and Freedoms given to individuals charged with an offence. But since the SCC has decided that civil forfeiture proceedings are non-criminal in nature, individuals defending their property against forfeiture applications do not even have the same level of procedural protections that accused criminals do.
Proportionality and judicial discretion
Civil forfeiture makes it possible for the provincial Crowns to seize and forfeit any property used as an instrument for an illegal act regardless of the value of the property or the severity of the illegal act. As a result, it is permissible for highly valuable property to be forfeited when it is suspected of being used for relatively minor offences. Also problematic is that the provincial Crowns’ forfeiture efforts have become focussed on acquiring property of high value instead of furthering the proper goals of crime deterrence and victim compensation. Some judges have recognized this lack of regard for proportionality in Canada’s civil forfeiture laws as a significant problem. Canadians would be best served if judges had sufficient discretion to tailor forfeiture orders that are proportionate to the severity of the illegal act and culpability of the property owner. B.C., Saskatchewan, Manitoba, and Ontario each have weak protections for proportionality in their legislation, stating only that forfeiture should not occur if it is “clearly not in the interests of justice”. The word “clearly” makes it far more difficult for a property owner to successfully argue that the forfeiture order the Crown is seeking is disproportionate. Nova Scotia and New Brunswick do not use the word “clearly”, which makes it less difficult for property owners to argue against the proportionality of the forfeiture order the Crown is seeking. Alberta and Quebec lack similar provisions, but both grant judges the discretion to craft appropriate forfeiture orders.
Breadth of power to forfeit
Each province has the power to subject property to forfeiture if it is suspected of being used as an instrument or of being acquired as proceeds of an illegal act. Except for Quebec and Alberta, each civil forfeiture law in Canada permits the Crown to impose forfeiture on property related to any federal or provincial offence. Quebec’s and Alberta’s legislation stipulates that forfeiture can be imposed for Criminal Code and Controlled Drug and Substances Act offences, and other federal and provincial offences that are incorporated by regulation or otherwise stipulated. To date, Quebec has added 11 federal and provincial statues, and Alberta has added none. Many illegal acts—whether federal or provincial offences—have no identifiable victim and result in no harm, yet these illegal acts may still result in the forfeiture of property. Since civil forfeiture laws are intended to provide compensation and are supposed to be remedial in nature, forfeiture should only be available when there is an identifiable victim who has suffered a loss as a direct result of the convicted person’s illegal acts. In many of these instances, no victim is likely to come forward to claim he or she was harmed by the offence. Drug offences generally involve the consenting participation of both sides to the transaction. Further, if forfeiture proceedings have been initiated by one level of government for the commission of an illegal act, no other level of government should be permitted to seek the forfeiture of the same or more property for the commission of that same illegal act. Currently, the same property may be claimed in both federal criminal forfeiture and provincial civil forfeiture proceedings even though it is suspected of being the instrument of, or being acquired by, a single illegal act.
Compensation and stripping profitability
Canada’s civil forfeiture laws create jobs for prosecutors, police officers, and other bureaucrats involved in enforcement or working at a provincial civil forfeiture office. And even though these regimes are often presented as cost-neutral or even profit generating, there is no clear evidence of this. There is evidence that civil forfeiture does make some illegal acts unprofitable, particularly for those individuals who have their property forfeited. And the availability of civil forfeiture does increase the financial risk involved in performing illegal activities. But increased risks can result in increased profits for those individuals who don’t get caught and therefore forfeit nothing. Research from the US, Australia, and the UK has found that civil forfeiture regimes have little impact upon these types of criminal organizations. This means increased profits for those criminals who are able to adapt their practices to remain a step ahead of law enforcement. Currently, because of poor financial transparency, it is difficult to know how much money collected by successful civil forfeiture applications goes towards compensating victims. Instead, it seems that much is used to purchase equipment for the police or is spent on trivial and improper expenses. Perhaps most troublesome is that much of the money collected has not been allocated for any particular purpose or has been used to pay for the cost of maintaining the civil forfeiture regime. While some provinces have made limited efforts to provide compensation for victims, much of the money collected is granted to unrelated third party non-profit and charitable organizations. This can lead to what is known as a “charity wash”. A charity wash occurs when a provincial civil forfeiture office attempts to insulate itself from criticism by making it seem that those opposed to civil forfeiture also oppose the charitable work of the grant recipient.
Transparency and accountability
No province has surveyed whether its forfeiture regime is meeting its statutory goals of deterring illegal acts and compensating victims. And instead of conducting such an evaluation in an open and transparent fashion, it is common for civil forfeiture offices to point to the assets seized and the funds distributed as evidence of success. Of course, this is completely unsatisfactory for the reasons discussed previously. To date, none of Canada’s provincial civil forfeiture regimes have been subjected to an auditor general’s review. No province requires that its civil forfeiture office release an accurate financial accounting of how much money is annually collected through civil forfeiture applications and how much is paid out to compensate victims for their losses. A bureaucrat at Alberta’s Civil Forfeiture Office responded to our request to see how much money has been disbursed to individual victims through the civil forfeiture process by admitting that the “office does not maintain statistics of this nature”. Without this sort of information, it is impossible for provincial governments to keep civil forfeiture offices accountable to their statutory goal of compensating victims.
COMPARISON BY PROVINCE:
British Columbia Legislation: Civil Forfeiture Act (2005) Grade: F ? British Columbia’s civil forfeiture program has a reputation for being one of the most aggressive in the country. Despite opening three years after the Ontario program, by 2014 the program had seized more property as measured in dollars. ? B.C.’s legislation grants a wide scope to civil forfeiture proceedings and requires no prior criminal conviction. ? Civil forfeiture may be used for any provincial or federal offence in B.C., with few exceptions. ? The director has a ten-year time limit from the date of the alleged illegal activity or omission to commence proceedings. ? According to the Executive Director of the Civil Forfeiture Office last July, around $1.5 million had been paid in Victim Compensation payments since the Office's inception. The Office seized over $41 million worth in property by 2015. ? The B.C. Civil Forfeiture Office is making a concerted effort to use the statutory forfeiture tools provided to it by the B.C. legislature to acquire valuable property without regard to its statutory purposes of deterring crime and providing victims with compensation. ? The Ministry of Justice releases grant recipient lists each year on their website. ? There are positive signs in recent case law that might allow for more judicial discretion in future operations of the program.
Alberta Legislation: Victims Restitution and Compensation Payment Act (2001) Grade: C ? Alberta's civil forfeiture regime does not require a prior conviction. ? Civil forfeiture can be used for any activity or omission that is an offence under the Criminal Code, the Controlled Drugs and Substances Act and acts as specified by regulation. This limits the scope considerably in comparison to other jurisdictions. ? Between 2008 and 2015, Alberta’s Civil Forfeiture Office forfeited more than $12.7 million in property. This suggests less use than the much higher figure in neighbouring British Columbia. ? The name of this civil forfeiture act implies a purpose to compensating victims more than any other jurisdiction. ? $2.8 million was distributed in Civil Forfeiture Fund grants in 2013-14 to charities, family services and law enforcement. ? According to the Director, the Civil Forfeiture Office does not “keep statistics” regarding how much money has been disbursed to individual victims. ? The Ministry of Justice and Solicitor General posted an ‘Approved CFO Projects‘ grant recipient list for 2014 but it is not clear what reporting schedule they follow. ? Alberta’s courts have much more discretion than other jurisdictions to craft forfeiture orders that are proportionate and satisfy the objectives of deterring illegal acts and compensating victims.
Saskatchewan Legislation: Seizure of Criminal Property Act (2009) Grade: D+ ? Saskatchewan's civil forfeiture legislation is very similar to B.C.'s. It has very limited built-in discretion and it requires no prior conviction. ? Civil forfeiture can be used for any activity or omission that is an offence under an act of any province or an act of Canada. ? According to the director, there are no public listings of disbursements from the Civil Forfeiture Fund. ? There is a built-in requirement of the Act to match any disbursement to police agencies with the same amount to the Ministry's Victims fund. ? Money paid into the fund may also be used “...for any other prescribed purpose.”
Manitoba Legislation: Criminal Property Forfeiture Act (2004) Grade: F ? Manitoba's civil forfeiture legislation requires no prior conviction. Civil forfeiture can be used for any activity or omission that is an offence under an Act of any province or an Act of Canada. ? The Act allows only minimal judicial discretion. ? Manitoba has at times initiated civil forfeiture proceedings in parallel with criminal proceedings, including those involving violent crimes. In those instances, civil forfeiture functions as a supplement or alternative to the criminal law, while lacking the same procedural protections afforded to criminals. ? In fiscal year 2013-14, the Ministry of Justice reported that no compensation was disbursed to any identifiable victims of crime from the proceeds of civil forfeiture even though $3 million in assets were forfeited. $861,627 was committed to support law enforcement agencies in that same fiscal year. ? In fiscal years where compensation is paid to identifiable victims, it is always a much lower amount than what is paid in grants to law enforcement and other agencies.
Ontario Legislation: Civil Remedies Act (2001) Grade: F ? Ontario's Act was the first provincial civil forfeiture statute introduced in Canada. ? The Act requires no prior conviction and allows only minimal judicial discretion. ? Civil forfeiture can be used for any activity or omission that is an offence under an Act of any province or an Act of Canada. ? According to government reports, a total of $21.2 million has been distributed to victims to since 2003. Yet in 2013-14 alone, over $22.9 million was forfeited. ? Ontario’s civil forfeiture regime has received wide criticism. The province routinely uses its power to forfeit property in circumstances where there is insufficient evidence to merit criminal charges. ? Ontario also uses its power to pursue the property of third parties not suspected of any wrongdoing. ? Ontario’s Civil Remedies for Illicit Activities Office has offered to settle with respondents demanding a large lump sum payment be made and that the respondent not speak of the details of the settlement. Effectively, respondents are extorted and gagged.
Quebec Legislation: An Act Respecting the Forfeiture, Administration and Appropriation of Proceeds and Instruments of Unlawful Activity (2007) Grade: C- ? Quebec is unique in Canada as the only jurisdiction to have a legal system which operates under Civil Law. Despite this, Quebec's civil forfeiture regime is thought to be 'informed by other jurisdictions like Ontario.' ? The Act does not require a criminal conviction but gives more discretion to judges than in other jurisdictions. ? Civil forfeiture can be used for any activity or omission that is an offence under the Criminal Code, the Controlled Drugs and Substances Act or offences in legislation listed under the schedules of the Act. This limits the scope considerably in comparison to other jurisdictions. ? Disbursements are made at the discretion of the government to victims funds, law enforcement agencies and other government bodies. ? We could not find any public listings regarding disbursements, grants and payments made to identifiable victims.
New Brunswick Legislation: Civil Forfeiture Act (2010) & Management of Seized and Forfeiture Property Act (2012) Grade: D+ ? New Brunswick does not require a prior conviction. ? Civil forfeiture can be used for any activity or omission that is an offence under an Act of any province or an Act of Canada. ? New Brunswick courts can refuse to grant an order, limit the application or put conditions on the order when the forfeiture, in whole or in part would “not be in the interests of justice”. This allows for more discretion and makes it easier for property owners to defend themselves than it does in jurisdictions where forfeiture will be denied only when it would be “clearly” not in the interests of justice. ? There is a ten-year time limit from the date of the alleged illegal activity or omission to commence proceedings. ? New Brunswick consolidates net revenue raised from both civil and criminal property forfeiture into a “Proceeds of Crime Trust Fund”. ? The mixing of these revenues raises important transparency questions as it may make it unclear how civil forfeiture revenue is specifically used. Payments out of the Fund may be made for crime prevention/law enforcement, victim restitution and the administration of criminal justice. Funds are disbursed to these causes at the discretion of the government. ? New Brunswick does not clearly publicize how much money is raised or disbursed through civil forfeiture.
Nova Scotia Legislation: Civil Forfeiture Act (2007) Grade: D+ ? Nova Scotia's Act requires no prior conviction. In fact, the government’s website openly admits the intention of using civil forfeiture where “...there is evidence of wrong-doing but criminal charges are not laid…” ? The Act allows for more judicial discretion in issuing orders than most other provinces. ? Civil forfeiture can be used for any activity or omission that is an offence under an Act of any province or an Act of Canada. ? There is a ten-year time limit from the date of the alleged unlawful act to commence proceedings. ? The Act does provide some protection for third parties. The court must make protection orders necessary to protect the interest in the property held by the “uninvolved interest holder”. ? According to the government’s website, revenue made from the sale and seizure of property through civil forfeiture will “...provide financial support for crime prevention and victim services programs, and also fund the civil forfeiture unit.” No mention is made of victim restitution or payments to identifiable victims.
Newfoundland & Labrador Legislation: n/a The government of Newfoundland & Labrador has not enacted any civil forfeiture legislation.
Prince Edward Island Legislation: n/a The government of Prince Edward Island has not enacted any civil forfeiture legislation.
The Territories Legislation: n/a Not one of the territories has enacted any civil forfeiture legislation. However, Nunavut is considering civil forfeiture legislation.
Civil forfeiture should only be available after a property owner has been found guilty of a provincial offence.
Judges must have sufficient discretion to craft proportionate forfeiture orders that satisfy the objectives of deterring illegal acts and compensating victims.
Civil forfeiture should only be available for property used or acquired by an owner convicted of a corresponding provincial offence and that resulted in an identifiable victim being harmed.
Revenue collected by successful civil forfeitures should compensate victims that suffered harm as a result of a convicted property owner’s acts.
Each provincial civil forfeiture office should provide a full and accurate annual report detailing the revenues raised and compensation disbursed
http://www.canlii.org/en/on/onca/doc/2014/2014onca397/2014onca397.html?resultIndex=1