Corporate Liability in Canada

By Peter MacKay (Baker McKenzie Canada)

I.              Corporate liability deriving from criminal activity

1.             What is the nature of corporate liability deriving from criminal activity? What is its legal basis?

In Canada, the Criminal Code (“Code”) and the Corruption of Foreign Public Officials Act (CFPOA) are the principal pieces of legislation that deal with corporate liability deriving from criminal activity in the context of multinational or global organizations. Both individuals and corporations are subject to these laws, and contravention can result in financial penalties, probation, imprisonment or some combination thereof. It is worth noting that although corporations cannot be imprisoned, their agents may be subject to imprisonment for breaching these laws.

Historically, corporate liability deriving from criminal activity in Canada was established using the “identification theory,” which is based on the fault of the corporation’s “directing mind(s).”[1] A “directing mind” is defined as an individual or individuals within the corporation with the authority to supervise the implementation of corporate policy.[2] Corporate criminal liability was determined through the actions of the “directing mind” of the corporation, operating within the scope of their delegated authority.[3] For crimes committed prior to September 2004, this law continues to apply to corporations. This law also applies to provincial charges against corporations for mens rea (knowledge-based) offences.[4]

For corporate crimes committed after September 2004, a different method for determining liability applies. In 2004, the Parliament of Canada amended the Code and adopted Bill C-45, An Act to Amend the Criminal Code (Criminal Liability of Organizations), which has significantly altered the legal landscape of Canadian corporate criminal liability. Liability is now linked to the corporation’s “senior officers” and encompasses employees, agents or contractors with “an important role in the establishment of an organization’s policies…[or who manage] an important aspect of the organizations activities.”[5]

The Code defines a “senior officer” as a representative with an important role in the establishment of the policies of the organization or who manages an important aspect of the organization’s activities, and includes a director, chief executive officer and chief financial officer in the case of a body corporate.[6] A “representative” means a director, partner, employee, member, agent or contractor of the organization.[7] Under the Code, a senior officer has a positive obligation to “take all reasonable measures to stop [a representative of the organization who they know is about to be a party to the offence] from being a party to the offence.”[8] This aspect of liability is an important development in corporate criminal liability, as liability can now attach where a senior officer is only passively involved in the offence by virtue of inaction or omission.[9]

2.             Type of crimes/administrative offences from which, according to the legislature, corporate liability may arise

As a preliminary note, most of the provinces and territories within Canada operate under the common law, except for Quebec, which uses a mix of civil law and common law. However, Canadian criminal law is governed largely by the federal Criminal Code. There are numerous municipal, provincial and federal regulatory regimes that sanction corporate misconduct and that have criminal or quasi-criminal powers, but for the sake of brevity, the focus of this section will be on corporate criminal liability that is captured by the Code and the CFPOA.

Under the Code and the CFPOA, some of the more prominent provisions pertaining to corporate criminal liability include the following:

  • Negligence — Offences of negligence — organizations (Criminal Code, Section 22.1); duties tending to the preservation of life; duty of persons directing work (Criminal Code, Section 217.1) if done with criminal negligence (Criminal Code, Sections 219 and 220, 221 or 222)
  • Offence that requires fault (other than negligence); other offences — organizations (Criminal Code, Section 22.2)
  • Theft — Theft by or from person having special property or interest (Criminal Code, Section 328(e))
  • False pretences — False pretence or false statement (Criminal Code, Sections 362(1)(c), Section 362(1)(d))
  • Forfeiture — Person deemed absconded (Criminal Code, Section 462.38(3)(b)); money laundering (Criminal Code, Section 462.31)
  • Public stores — Selling defective stores to Her Majesty; offences by representatives (Criminal Code, Section 418(2))
  • Bribery, corruption and inappropriately influencing public and municipal officials — Bribery of officers (including judicial officers) (Criminal Code, Sections 119, 120); frauds on the government (Criminal Code, Section 121); breach of trust by public officer (Criminal Code, Section 122); municipal corruption (Criminal Code, Section 123); selling or purchasing office (Criminal Code, Section 124); influencing or negotiating appointments or dealing in offices (Criminal Code, Section 125); bribing a foreign public official (Corruption of Foreign Public Officials Act, Section 3); accounting (Corruption of Foreign Public Officials Act, Section 4); offence committed outside Canada (Corruption of Foreign Public Officials Act, Section 5); secret Commissions (Criminal Code, Section 426)
  • Threats and retaliation against employees (Criminal Code, Section 425.1)
  • Fraud (Criminal Code, Section 380); fraudulent manipulation of stock exchange (Criminal Code, Section 380(2)); insider trading (Criminal Code, Section 382.1(1)); tipping (Criminal Code, Section 382.1(2)) and making a false prospectus (Criminal Code, Section 400)

3.             Identification of companies and entities to which liability may apply

Corporate criminal liability in Canada applies to all “organizations.”[10] Section 2 of the Code defines an organization as a “public body, body corporate, society, company, firm, partnership, trade union or municipality” and includes an association of persons “created for a common purpose, [with] an operational structure, and [that] holds itself out to the public as an association of persons.”[11] Governmental institutions are included in this definition and may be faced with criminal prosecutions.[12] Additionally, charitable organizations and trade unions are specifically referred to in the legislation, signalling their clear inclusion under this scheme.[13]

4.             Corporate liability for crimes committed abroad by representatives or subsidiaries

Under both the Code and the CFPOA, a Canadian parent corporation may be held liable for crimes committed abroad by its representatives or subsidiary. If it is established that there is real and substantial connection between the offence and Canada, Canadian law may reach outside of national jurisdiction.[14]

Generally, a parent corporation cannot be held liable for crimes committed by its subsidiary purely on the basis of the parent-subsidiary relationship.[15] In particular, crimes committed by the subsidiary will not be attributed to its parent, or the parent’s officers and directors if the subsidiary corporation operates independently from its parent corporation.[16]

Canadian courts recognize the existence of the “corporate veil,” which ordinarily prevents a parent corporation and its officers and directors from assuming criminal liability for the acts of a subsidiary.[17] However, there are rare circumstances in which the court will pierce the corporate veil, leaving the parent corporation open to criminal prosecution for the criminal acts of its subsidiary.[18] But in order to pierce the corporate veil, the following must be established:

      1. The subsidiary corporation is merely the alter ego (or “cloak” or “sham” or “puppet”) of the shareholder. Generally, a subsidiary, even a wholly owned subsidiary, will not be found to be the alter ego of its parent unless the subsidiary is under the complete control of the parent and is nothing more than a conduit used by the parent to avoid liability.
      2. The corporation was created or is being used for a fraudulent or improper purpose.[19]

The courts are generally reluctant to pierce the corporate veil if they are short of establishing these standards.

However, under the Code, there are circumstances under which a parent corporation could be held to be a party to a criminal offence committed by its subsidiary. A Canadian corporation may be liable for the criminal acts of a foreign subsidiary if a senior officer of the corporate parent is a party to an offence.[20] For instance, liability could arise if a senior officer acting within the scope of a given duty works with a foreign subsidiary and offers an illicit benefit to a foreign public official.[21]

Liability may also arise if a senior officer of the parent corporation has knowledge that a foreign subsidiary is engaging in corrupt activities for the parent corporation’s benefit, and such senior officer fails to take reasonable measures to prevent the subsidiary from engaging in that conduct.[22] A senior officer may not be “willfully blind” to the corrupt practices of a foreign subsidiary.[23]

Furthermore, under the CFPOA, cases where a Canadian corporation engages in or attempts to commit a conspiracy, or in cases where it is an accessory after the fact, or offers counselling in relation to offences in either Sections 3(1) or 4(1) of the Act will be deemed acts or omissions to have occurred in Canada.[24] This aspect of the CFPOA essentially expands the nationality jurisdiction standard to a number of adjunct offences under the Code.[25] Consequently, a Canadian parent corporation could face liability for being complicit in corrupt practices undertaken by its foreign subsidiary, and may not be able to avoid this liability on the basis that its complicity was grounded in actions taken by the parent or the corporation’s senior officers outside of Canada.[26]

Additionally, in cases where an officer or director of the parent corporation is also an officer or director of the subsidiary, and is determined to be a “directing mind” of the subsidiary, such officer may be found criminally responsible under the identification doctrine.[27]

5.             Corporate liability in the case of transactions taking place after the commission of a crime (acquisitions, mergers, demergers, etc.)

In Canadian law, the degree of liability of acquirers in an asset acquisition transaction appears to be unsettled.[28] Conversely, it is an accepted principle of corporate law that in the acquisition of one corporation by another through a share purchase, the acquirer assumes the target’s liabilities that have arisen prior to the share acquisition.[29]

Similarly, under the CFPOA, any anti-corruption liability incurred before the acquisition is not affected by a change in ownership of the target corporation, and the same is true in case of amalgamations.[30] An amalgamated corporation is liable for the obligations of each amalgamating corporation.[31] Essentially, the amalgamation does not affect an existing liability. Even in cases where a criminal action is pending, the action may be prosecuted against the amalgamated corporation.[32]

In an asset purchase, the purchasing corporation generally does not assume liability for the debts and liabilities of the selling company, unless they have been bargained for in the asset purchase and sale agreement.[33] An asset acquisition, rather than an acquisition of a particular entity, may operate as a kind of risk-mitigation strategy used by potential acquirers, as desired assets can be obtained, but not the entity itself, and any potential liability for corrupt practices that might accompany it.[34]

However, successor liability for asset acquisitions is unsettled, and there is no guarantee that an asset acquisition will evade liability.[35] In determining if liability should follow the assets, Canadian courts may conduct a “fact-dependent, quasi equity-based investigation.”[36]

Canadian jurisprudence has reviewed and referred to American case law in discussing the evolution of successor liability and how the doctrine deals with de facto mergers or instances of a purchasing corporation appearing to be a mere continuation of the selling corporation.[37] One Canadian court has emphasized that “the tests for de facto merger and mere continuation have tended to merge,” and there are now four generally accepted criteria that apply in these situations.[38] These four criteria are as follows:

    1. Continuity of ownership between seller and purchaser corporations
    2. Cessation of ordinary business and dissolution of the predecessor as soon as practically and legally possible
    3. Assumption by the successor of the liabilities ordinarily necessary for the uninterrupted continuation of the business of the predecessor
    4. Continuity of management, personnel, physical location, assets and general business operations[39]

It appears that the successor liability of a predecessor corporation is a fact-specific determination.[40] Notably, successor liability in Canada has been addressed in the context of civil liability, and it remains to be seen how Canadian courts will deal with this issue in the criminal context.[41]

II.            Applicable sanctions

1.             Type of sanctions applicable to the company

Under the CFPOA, contravention by an individual is an indictable offence and can result in imprisonment for up to 14 years,[42] whereas a company convicted of an indictable offence under the Code faces a fine of an unlimited amount.[43] Additionally, where an organization is convicted of a summary conviction offence, it can be fined up to USD 100,000.[44]

In sentencing the company, the sentencing judge may consider the following factors:

  1. Any advantage realized by the organization as a result of the offence
  2. The degree of planning involved in carrying out the offence and the duration and complexity of the offence
  3. Whether the organization has attempted to conceal its assets or convert them, in order to show that it is not able to pay a fine or make restitution
  4. The impact that the sentence would have on the economic viability of the organization and the continued employment of its employees
  5. The cost to public authorities of the investigation and prosecution of the offence
  6. Any regulatory penalty imposed on the organization or one of its representatives in respect of the conduct that formed the basis of the offence
  7. Whether the organization was — or any of its representatives who were involved in the commission of the offence were — convicted of a similar offence or sanctioned by a regulatory body for similar conduct
  8. Any penalty imposed by the organization on a representative for the role played in the commission of the offence
  9. Any restitution that the organization is ordered to make or any amount that the organization has paid to a victim of the offence
  10. Any measures that the organization has taken to reduce the likelihood of it committing a subsequent offence[45]

Additionally, the court has the discretion to prescribe additional conditions of a probation order, requiring that the offending company undertake any of the following:

  1. Make restitution to a person for any loss or damage that they suffered as a result of the offence
  2. Establish policies, standards and procedures to reduce the likelihood of the organization committing a subsequent offence
  3. Communicate those policies, standards and procedures to its representatives
  4. Report to the court on the implementation of those policies, standards and procedures
  5. Identify the senior officer who is responsible for compliance with those policies, standards and procedures
  6. Provide, in the manner specified by the court, the following information to the public, namely:
      1. The offence of which the organization was convicted
      2. The sentence imposed by the court
      3. Any measures that the organization is taking — including any policies, standards and procedures established under Paragraph (b) — to reduce the likelihood of it committing a subsequent offence
  7. Comply with any other reasonable conditions that the court considers desirable to prevent the organization from committing subsequent offences or to remedy the harm caused by the offence[46]

The court may determine that it is more appropriate for another regulatory body to supervise the development and implementation of the policies, standards and procedures set out in the probation order.[47]

As indicated earlier, corporations and their agents may be liable for criminal or quasi-criminal sanctions under municipal, provincial and other federal statutes, many of which create either strict liability or absolute liability offences. Corporations may face additional sanctions under these various other pieces of legislation that could result in fines against the company.[48] For instance, on Section 122(1) of the Ontario Securities Act, the general offence of contravention of securities laws may result in a fine of up to USD 5 million or imprisonment for a term of not more than five years less a day, or both.[49]

Additionally, under the government-wide Public Services and Procurement Canada Integrity Regime, supplier companies may be barred from conducting business with the Canadian government for 10 years if the corporation or its board members have, in the last three years, been convicted or discharged for integrity-related offences, including offences under the CFPOA and other offences, such as bribery, fraud and money laundering.[50]

 

2.             Interim measures, cease and desist orders, bans and confiscatory measures

Generally, during the interim or investigative phase of criminal proceedings, sanctions cannot be executed.[51] There are certain exceptions, such as special search warrants under the Code provisions for the proceeds of crime/money laundering, which allows seizure of “proceeds of crime,” namely for “any property, benefit or advantage, within or outside Canada, obtained or derived directly or indirectly as a result of: (a) the commission of a designated offence; or (b) an act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence.”[52]

3.             Liability of directors or managers for not having adopted (intentionally or negligently) measures for the prevention of the crime

Depending on their role or knowledge of an alleged offence, directors or managers could be charged under the Code when a corporation commits a criminal offence, and could be held personally liable as either a principal or party to the offence.[53] Charges can be laid against directors or managers who omit to do anything in order to aid a person in the commission of an offence, but it is unlikely that failing to adopt crime prevention measures will be captured in this context.[54] It is, however, worth noting that in sectors supervised by senior officers, a compliance program could form the basis of a legal defence of “reasonable measures.”[55]

III.           Measures and “models” of prevention and effects of the same on corporate liability and applicable sanctions

1.             Consequences of the adoption of a compliance “model” and effects on corporate liability for crimes committed by the company’s managers, directors or representatives (cases in which it is possible to obtain an exemption from liability or a mitigation of the sanction)

In the specific context of procurement, a supplier company can reduce the length of debarment under the Public Services and Procurement Canada Integrity Regime from 10 years to five years by demonstrating that it has made efforts to cooperate with authorities, remediate the misconduct and has entered into an administrative agreement with the government.[56]

In all other cases, companies may mitigate their risk of incurring liability for corporate crime if an effective and appropriately enforced compliance program is implemented. Compliance policies should go beyond establishing a code of conduct and should set out a system of internal controls that correspond to the risk profile of the company.[57]

Additionally, the Competition Bureau has published a “Corporate Compliance Programs” Bulletin (the “Bulletin”), which also provides guidance on effective corporate compliance programs, both within and outside of the competition field.[58] The bureau also offers immunity and leniency programs, but these programs generally apply only in the context of cartels.[59]

Importantly, compliance is not formally recognized as a defence in the Bulletin, but it is indicated that an effective compliance program may be considered by the Competition Bureau in the determination of how it will proceed against companies, including recommendations on fines.[60]

According to the Bulletin, the seven basic elements of a credible corporate compliance plan include the following:

      1. Management commitment and support
      2. Risk-based corporate compliance assessment
      3. Corporate compliance policies and procedures
      4. Compliance training and communication
      5. Monitoring, verification and reporting mechanisms
      6. Consistent disciplinary procedures and incentives for compliance
      7. Compliance program evaluation[61]

2.             Modality according to which a compliance “model” must be adopted in order to benefit from exemption from responsibility or mitigated punishment (codes of ethics, procedures, etc.)

The following steps are a point of reference for assessing due diligence, as these relate to liability for regulatory offences and may be useful when organizations are being sentenced pursuant to the Code.

The organization should perform the following:

  • Establish compliance standards and procedures that are “reasonably capable of reducing the prospect of criminal conduct”
  • Provide oversight of the compliance efforts by high-level personnel or “senior officers”
  • Use due diligence in avoiding the delegation of authority to anyone whom the organization should have known had a propensity to engage in illegal activities
  • Clearly communicate the standards and procedures of the compliance program to all employees of the organization
  • Police its own policies
  • Enforce compliance standards by consistently using “appropriate disciplinary mechanisms”
  • Report any violations of the policy to the authorities[62]

While self-reporting may not constitute due diligence such that it constitutes a defence of taking all reasonable measures, if an organization knew of past problems and failed to take remedial steps, this could be considered an aggravating course of conduct.[63]

The establishment of Codes of Conduct and standard policies are an important part of the compliance process and the existence of such policies may aid corporations in their efforts to deter criminal activity within the organization.

For further information, please see Paragraph III.1 above.

3.             Monitoring: independent person or body to control/supervise, with the purpose of verifying the correct application of the “model”. Model of operation of such person or body

The Bulletin (please see Paragraph III.1. above) emphasizes the importance of having a designated “compliance officer.”[64] This officer must have independence, resources and the ability to participate in decision-making at the level of senior management.[65] The following additional requirements are imposed upon the compliance officer under the Bulletin:

The compliance officer should report to the board of directors or a committee of the board of directors, such as the audit committee, on compliance program matters, such as the implementation and effectiveness of the program, disciplinary actions resulting from a breach of the program’s policies, as well as any allegations of contraventions of the acts. The Compliance Officer should only be removable by the board of directors on terms set in advance by the board.[66]

In Canada, companies should be cautious about using a general counsel as the Compliance Officer as this could expose legal advice to scrutiny.[67] The Compliance Officer should be selected with a view to secondary liability and should be a “senior officer” who is competent.[68]

In supervising and enforcing a compliance program, the Compliance Officer should establish clear compliance standards and reporting mechanisms.

For further information, please see Paragraphs III.1 and III.2. above.

IV.          Judicial proceedings to determine corporate liability

1.             Court competent to decide the liability of and penalties applicable to the company

The appropriate court to determine the liability and penalties of the company will depend on the nature of the criminal offence and whether it is captured by municipal, provincial or federal laws.

2.             Possibility of the application of interim measures

Under the Public Services and Procurement Canada Integrity Regime, the company could face interim debarment prior to conviction (for more information, see Paragraph II.1). Additionally, a search warrant for search and seizure pursuant to the Code may be issued (for more information, see Paragraph II.2 above) or law enforcement officials may seek to obtain a production order, requiring that copies of specific information be provided to law enforcement agents.[69]

3.             Plea bargains and related effects on corporate liability

There is no formal framework for self-reporting, and sentences for self-reporting of bribery offences have not been specifically determined.[70] Providing credit for self-reporting is not a principle enunciated in sentencing guidelines; prosecutors and the sentencing judge have the discretion to determine how self-reporting of offences factor into the sentence.[71] The general expectation is that self-reporting in good faith will be viewed as a mitigating factor on sentencing, but the weight of this factor is reduced in cases where it is determined that discovering the offence was inevitable.[72]

Companies can self-report and may ask to settle the proceeding with a plea bargain.[73] Investigations and prosecutions of corporations for criminal offences and foreign corrupt practices often end in plea bargain agreements.[74] Parties may plea bargain, but the sentencing judge is not bound by their joint submission. However, there is a presumption that a submission agreed on by the Crown and defence should be followed, unless it would bring the administration of justice into disrepute or is otherwise not in the public interest.[75]

4.             Imposition of sanctions against the company

The sentencing judge has discretion in sentencing a corporation and imposing sanctions against the company. The prosecutor may recommend a sentence or fine, but ultimately, the final decision rests with the sentencing judge.

Canadian courts can order probationary terms for corporations.[76] Convictions under the Code and the CFPOA can also result in disbarment or incapacity to contract with the federal government for five to 10 years (for more information, see Paragraphs II.1. and III.1 above).

Proceeds, such as disgorgement and not simply the profits or property obtained due to a CFPOA offence or other illegal act, could be ordered to be forfeited by the Crown.[77] Companies can also face unlimited fines upon conviction.

Ultimately, corporations should ensure they have an effective compliance program in place and should consider self-reporting any criminal violations as soon as practicable, with the advice of a legal counsel, in order to: (i) diminish the severity of sanctions and penalties against the company; and (ii) try to deter criminal activity within their organization.

5.             Persistence of corporate liability if the crime is extinguished

Prosecution of the company will not cease because the corporation has put a stop to the offending conduct. The implementation of a compliance program and the fact that the company self-reported the offences could be mitigating factors considered by the sentencing judge.

V.           Corporate liability in multinational groups

1.             Liability of parent companies located abroad in the case of offences committed by directors, managers or representatives of the local company

Ordinarily, parent corporations are not liable for misconduct committed by their subsidiaries.[78] A subsidiary is generally treated separate from the parent, unless it is a conduit used by the parent to avoid liability.[79] As discussed earlier in this chapter, courts are generally reluctant to pierce the corporate veil to find a corporate parent liable for the acts of its subsidiary. However, as already described, the court may pierce the corporate veil in cases where it is determined that the corporate structure has been used as a sham in order to perpetuate a fraud.[80]

To assess the relationship between the parent and the subsidiary, courts will consider the following:

  • Whether profits are transferable between the two
  • Whether the parent is truly the “head and brains” of the subsidiary[81]

For more information on liability arising from parent-subsidiary relationships, see Paragraph I.4. above.

2.             Basis of liability and applicable sanctions

The law in Canada surrounding corporate liability for crimes committed by representatives or subsidiaries and the general rules regarding piercing the corporate veil are outlined in Paragraph I.4. Corporations and their representatives found guilty under the Code or the CFPOA may face criminal sanctions or fines, as described in Paragraph II.1.

VI.          Significant case law concerning corporate liability arising from crimes and draft laws under discussion

1.             Significant case law, if any

  • R. v. Karigar, 2014 ONSC 3093 – The court stressed that crimes involving foreign corruption are inherently difficult to prosecute, particularly as these crimes often occur in whole in other countries. The court assumed jurisdiction over Mr. Karigar’s conduct. Notably, the court held that no substantial element of an offence needs to occur in Canada for the court to assume jurisdiction over crimes of foreign corruption.
  • R. v. Pétroles Global Inc., 2013 QCCS 4262 – In August 2013, the court issued its first ruling on the merits concerning criminal liability of an organization for a subjective mens rea offence. Pétroles Global Inc. was found criminally liable for the participation of its senior officers in a retail gasoline price-fixing cartel.
  • R v. Griffiths Energy, [2013] AJ No 412, 2013 WL 8604465 (ABQB) – On 25 January 2013, the court accepted a joint submission by the Crown and the lawyer of Griffiths Energy International Inc. (GEI) on a single count of bribery under the CFPOA. The charge arose from GEI’s illegal payment of USD 2 million to Chadian officials, a transaction described by Justice Brooker as “an embarrassment to all Canadians.” After extensively cooperating with authorities in Canada and the US, GEI was fined CAD 10.35 million.
  • R v. Niko Resources Ltd, [2012] AWLD 4536, 101 WCB (2d) 118 (ABQB) – In June 2011, Niko pleaded guilty and paid a fine of almost USD 10 million as a result of bribes paid to a Bangladeshi official, including a luxury SUV and trips to New York and Calgary. Niko’s probation order also required the company to develop compliance standards and procedures, including risk assessments. This case also highlights the existence in Canadian law of the potential risk of a parent corporation being held liable for offences committed by its subsidiary.
  • R v. Metron Construction Corp, 2012 ONCJ 506, 1 CCEL (4th) 266, aff’d 2013 ONCA 541 – A Toronto construction company was held criminally liable for the negligent actions of its site supervisor after four men died when a swing stage carrying the men collapsed.
  • R v. Tri-Tex Sales & Services Ltd., [2006] NJ No 230 (QL), 70 WCB (2d) 512 (NL Prov. Ct.) – A bookkeeper of a small company constituted a senior officer given that finances was deemed an “important aspect” of the company’s activities.

2.             Proposed or contemplated new legislation

The Code was amended in 2004 to include additional rules governing criminal liability of corporations, but currently, there are no new bills before the legislature seeking to amend the Code that pertains to corporate criminal liability. Similarly, since amendments to the CFPOA came into force in 2013, there have been no further proposals to amend this legislation. Nonetheless, significant consideration is being given by the federal government of Canada to the introduction of legislation that would permit deferred prosecution agreements as found in the United States and United Kingdom.

[1] Todd Archibald, Kenneth Jull & Kent Roach, Regulatory and Corporate Liability: From Due Diligence to Risk Management, Student ed (Toronto: Thomson Reuters Canada Limited, 2015) at Ch. 5:10, p. 5-2 [“Archibald”].

[2] Paul Schabas & Tony Wong, Criminal Liability of Companies: A Global Practice Guide prepared by the Lex Mundi Business Crimes and Compliance Practice Group – Canada, Ontario (Toronto: Blake, Cassels & Graydon LLP, Copyright Lex Mundi Ltd., 2008) at p. 7, s. 2.4 [“Schabas”].

[3] Ibid.

[4] Archibald, supra note i.

[5] Ibid.

[6] Criminal Code of Canada, R.S.C. 1989, c. C-46, s. 2 [“Code”].

[7] An Act to amend the Criminal Code (Criminal Liability of Organizations), 2d Sess., 37th Parl., 2003 (assented to November 7, 2003), S.C. 2003, c. 21, “representative”.

[8] Code, supra note vi at s. 22.1(b); see also Schabas, supra note ii at p. 8, s. 2.4.

[9] Paul Blyschak, “Corporate Liability for Foreign Corrupt Practices under Canadian Law” (2014) 59:3 McGill LJ 655 at 666 [“Blyschak”].

[10] Archibald, supra note i at Ch. 5:40:10, p. 5-12.

[11] Ibid.

[12] Ibid.

[13] Ibid at Ch. 5:40:10, p. 5-13.

[14] Ibid at Ch. 3:60, p. 3-36.

[15] Schabas, supra note ii at p. 13, s. 2.12.

[16] Ibid.

[17] Ibid.

[18] Ibid at p. 14, s. 2.12.

[19] Ibid at p. 14, s. 2.12, citing Transamerica Life Insurance of Canada v. Canada Life Assurance Co, [1996] O.J. No. 1568 (Gen. Div.) aff’d [1997] O.J. 3754 (C.A.).

[20] Blyschak, supra note ix at 699.

[21] Ibid at 699.

[22] Ibid at 699-700.

[23] Ibid at 700.

[24] Ibid.

[25] Ibid.

[26] Ibid.

[27] Schabas, supra note ii at p. 13, s. 2.12.

[28] Blyschak, supra note ix at 685.

[29] Ibid, citing Christopher C Nicholls, Mergers, Acquisitions, and Other Changes of Corporate Control (Toronto: Irwin Law, 2007) at 56.

[30] Ibid at 685.

[31] Ibid at 685-686. See eg, Alberta Business Corporations Act, RSA 2000, c B-9, s 186; Ontario Business Corporations Act, RSO 1990, c B.16, s 179.

[32] Ibid at 685-686. See eg, Alberta Business Corporations Act, RSA 2000, c B-9, s 186; Ontario Business Corporations Act, RSO 1990, c B.16, s 179.

[33] Ibid at 692; see Central Sun Mining Inc. v. Vector Engineering Inc, 2011 ONSC 1439 at para 27; see also Cominco Ltd. v. Westinghouse Canada (1981), 33 BCLR 202, 1 WWR 640 (SC).

[34] Ibid at 692-693.

[35] Ibid at 693; see Wayne D Gray, “Creditors, Losers Under CBCA Reform but Winners in JudgeMade Corporate Law” (2003) 39 Can Bus LJ 92 at 135, n 166.

[36] Ibid at 693.

[37] Ibid at 695, referencing Winnipeg Condominium Corp No. 36 v. Bird Construction Co, [1999] 2 WWR 370, 132 Man R (2d) 32 (QB); Caranci v. Huckerby, [2004] OTC 374 (O.N. S.C.); Parlette v. Sokkia (2006), 151 ACWS (3d) 1059 (O.N. S.C.), aff’d Parlette v. Sokkia (2007), 221 OAC 11, 46 CCLT (3d) 161.

[38] Ibid, citing Central Sun Mining Inc. v. Vector Engineering Inc, 2011 ONSC 1439.

[39] Ibid, citing Central Sun Mining Inc. v. Vector Engineering Inc, 2011 ONSC 1439 at para 40.

[40] Ibid, citing Central Sun Mining Inc. v. Vector Engineering Inc, 2011 ONSC 1439 at paras 42-44.

[41] Ibid at 696.

[42] CFPOA, S.C. 1998, c. 34, s. 4(2). See also Canada, Public Prosecution Service of Canada, “Public Prosecution Service of Canada Deskbook: 5.8 Corruption of Foreign Public Officials” (Ottawa: PPSC, 1 March 2014), online: <http://www.ppsc-sppc.gc.ca/eng/pub/fpsd-sfpg/fps-sfp/tpd/p5/ch08.html> [PPSC, “PPSC Deskbook”].

[43] Code, supra note vi at s. 735(1)(a).

[44] Ibid at s. 735(1)(b).

[45] Ibid at s. 718.21.

[46] Ibid at s. 732.1(3.1).

[47] Ibid at s. 732.1(3.2).

[48] Schabas, supra note ii at p. 5, s. 1.3.

[49] Ibid.

[50] Mark Morrison, Michael Dixon & Paul Schabas, Canada – Bribery & Corruption, 4th ed (Global Legal Insights: 2017), online: < https://www.globallegalinsights.com/practice-areas/bribery-and-corruption/global-legal-insights—bribery-and-corruption/canada> [“Morrison”].

[51] Schabas, supra note ii at p. 13, s. 2.10.

[52] Ibid, citing Criminal Code, RSC 1989, c C-46, s. 462.3(1).

[53] Ibid at p. 11, s. 2.7.

[54] Ibid.

[55] Archibald, supra note i at Ch. 17:120:100, p. 17-93.

[56] Morrison, supra note l.

[57] Archibald, supra note i at Ch. 7:20:45.10, s. 7-48.5.

[58] Ibid at Ch. 7:20:45.10, s. 7-47.

[59] Ibid at Ch. 7:20:45.10, s. 7-48.8

[60] Ibid at Ch. 7:20:45.10, s. 7-47-7-48.

[61] Ibid at Ch. 7:20:45.10, s. 7-48.2-7-48.3.

[62] Ibid at Ch. 7:20:45, s. 7-35-7-41, citing M. Joseph, “Organizational Sentencing” (1998), 35 Am. Crim. L.R. 1017 at p. 1028-1030.

[63] Ibid at Ch. 7:20:45.05, s. 7-43-7-44.

[64] Ibid at Ch. 7:20:45.10, s. 7-48.3, citing Competition Bulletin, section 4.1.

[65] Ibid at Ch. 7:20:45.10, s. 7-48.3.

[66] Competition Bulletin, section 4.1.

[67] Archibald, supra note i at Ch. 7:20:45, s. 7-35.

[68] Ibid at Ch. 7:20:45, 7-36.

[69] Morrison, supra note l.

[70] Ibid.

[71] Ibid.

[72] Ibid.

[73] Ibid.

[74] Blyschak, supra note ix at 704.

[75] Morrison, supra note l.

[76] Ibid.

[77] Ibid.

[78] Archibald, supra note i at Ch. 17:90:20.90, p. 17-67.

[79] Ibid.

[80] Meditrust Healthcare Inc. v. Shoppers Drug Mart, (2002), 220 D.L.R. (4th) 611 at para 31, 61 O.R. (3d) 786 Ont. C.A.).

[81] Archibald, supra note i at Ch. 17:90:20.90, s. 17-68, citing Hon. James Spence, “Lifting the Corporate Veil” (1998), Adv. Soc. J. No. 4, citing the decision in Smith, Stone & Knight Ltd. v. Birmingham (City), [1939] 4 All E.R. 116, 3 Mod LR 226 (Eng. K.B.).