COURT OF APPEAL FOR ONTARIO DATE: 20230222 DOCKET: C69696

Doherty, Favreau and Copeland JJ.A.

BETWEEN

His Majesty the King

Appellant

and

Abdallah Abdelrazzaq

Respondent

Counsel: James D. Sutton and Genevieve McInnes, for the appellant Ewan Lyttle, for the respondent

Heard: August 9, 2022

On appeal from the sentence imposed on June 23, 2021, by Justice Trevor A. Brown of the Ontario Court of Justice, with reasons released on July 6, 2021.

Doherty J.A.:

I Overview

[1] The respondent pled guilty to one charge of possession of cocaine for the purposes of trafficking and one count of possession of the proceeds of crime, namely, the $74,560 paid to the respondent by the police agent for the cocaine. The respondent received a net jail sentence of 3 years, 8 months, his vehicle was ordered forfeited, and the trial judge made other ancillary orders. None of these orders, or the jail sentence, are in issue on this appeal.

[2] At sentencing, the parties agreed that the proceeds from the sales of the cocaine ($74,560) were subject to forfeiture upon conviction pursuant to s. 462.37(1) of the Criminal Code, R.S.C. 1985, c. C-46. The parties also agreed that the funds were not available for forfeiture at the time of sentencing. As the funds were not available, a forfeiture order under s. 462.37(1) could not be made. The Crown sought an order pursuant to s. 462.37(3) imposing a fine in the amount of the value of the cocaine ($74,560) in lieu of a forfeiture order. The Crown also sought a term of imprisonment in default of payment of that fine as provided for in s. 462.37(4)(iv).

[3] The respondent challenged the constitutionality of ss. 462.37(3) and (4). He argued that the sections contravened s. 7 and s. 12 of the Canadian Charter of Rights and Freedoms. The respondent’s s. 12 argument had two parts. First, he submitted that the provisions as applied to the facts and circumstances of his case contravened s. 12. Second, he submitted that the provisions contravened s. 12 when applied in other reasonably foreseeable circumstances.

[4] The trial judge rejected the respondent’s s. 7 argument. He also rejected the submission that the application of the challenged provisions to the circumstances presented in the respondent’s case infringed s. 12. The trial judge did, however, hold that the application of the challenged provisions to offenders in circumstances presented in two reasonable hypotheticals would violate s. 12. The trial judge concluded the infringement could not be justified under s. 1. Having held the section unconstitutional, the trial judge declined to impose a fine in lieu of forfeiture.

[5] The Crown appeals. An order imposing a fine instead of forfeiture falls within the definition of “sentence” for the purposes of appeals under Part XXI of the Criminal Code: Criminal Code, s. 673. The Crown has an appeal to this court, with leave, from an order refusing to impose a fine in lieu of forfeiture: Criminal Code, s. 676(1)(d); R. v. Pawlyk (1991), 65 C.C.C. (3d) 63 (Man. C.A.), at pp. 66-67, 71-72. The submissions before this court are limited to the trial judge’s finding that the relevant Criminal Code sections are unconstitutional as applied to the reasonable hypotheticals he identified. The trial judge’s finding that the provisions did not offend s. 7 of the Charter, and did not result in cruel and unusual treatment as applied to the respondent in his circumstances are not disputed on this appeal, and will not be addressed in these reasons.

[6] This appeal raises two questions:

• Did the trial judge err in holding that he was not bound by the decision in R. v. Chung, 2021 ONCA 188, 402 C.C.C. (3d) 145, leave to appeal refused, [2021] S.C.C.A. No. 320, that the fine in lieu of forfeiture provisions in the Criminal Code did not offend s. 12 of the Charter?
• Assuming the trial judge was not bound by Chung, did he err in holding that the fine in lieu of forfeiture provisions would impose cruel and unusual treatment in some reasonably foreseeable circumstances, and were therefore unconstitutional?

[7] I would allow the appeal. The trial judge was bound by the decision of this court in Chung. Although the hypotheticals put before the trial judge were very different from the hypotheticals advanced by counsel in Chung, the argument ultimately accepted by the trial judge to support his finding that the fine in lieu of forfeiture provisions were unconstitutional as applied to certain offenders was put before this court in Chung. The court considered and rejected that argument. The trial judge was obliged to follow Chung.

[8] In any event, I agree with the appellant’s submission that, apart from the binding authority in Chung, the fine in lieu of forfeiture provisions do not impose cruel and unusual treatment and do not violate s. 12 of the Charter.

II The Facts

[9] In 2019, the Ontario Provincial Police (the “OPP”) were engaged in an ongoing investigation targeting drug distribution in eastern and central Ontario. Between July 2019 and December 2019, the respondent sold high quality cocaine on six separate occasions to an OPP police agent. In total, the respondent sold 48.5 ounces of cocaine to the police agent and received $74,560 from the agent.

[10] None of the money paid to the respondent for the cocaine was recovered by the police. The respondent claimed that he made $6,000 to $7,000 from the transactions. The rest of the money went to pay his supplier for the cocaine. The respondent acknowledged that he was not addicted to cocaine or any other drug and that he sold cocaine to make a living.

[11] The respondent was 29 years old when he committed the offences. He had a minor and dated criminal record. The respondent had a difficult and abusive childhood.

[12] The respondent had a sporadic work history and did not appear particularly interested in working for a living. He described physical labour as disfiguring and the work environment in the retail sales field as toxic. The trial judge described the respondent as “a bright, relatively articulate man”, but was less than impressed with the respondent’s attitude. The trial judge said:

He [the respondent] sold drugs for profit, endangering the community through his conduct, because he preferred this to the everyday struggles of law-abiding citizens who choose legitimate employment. As he himself stated, he found this an easier way to make money.

III The Trial Judge’s Reasons

[13] The trial judge’s reasons are thorough and thoughtful. He accepted that a fine in lieu of forfeiture and the related provision providing for imprisonment upon default in payment amounted to “treatment” for the purposes of s. 12 of the Charter. He indicated he did not have to determine whether the provisions also imposed a “punishment” within the meaning of s. 12.

[14] In Chung, at para. 117, this court concluded that a fine in lieu of forfeiture and the imposition of imprisonment in default of payment constituted treatment, but not punishment for the purposes of s. 12. I will also consider the s. 12 claim under the “treatment” component of s. 12. Whichever concept is engaged, gross disproportionality remains the line of demarcation between provisions which comply with s. 12 and those which do not: Chung, at paras. 118-21.

[15] The trial judge, following Chung, at paras. 120-21, recognized that, when applied to treatment, the s. 12 inquiry involves a determination of whether the impugned provisions, as applied to the offender, or as applied in reasonably foreseeable circumstances, result in grossly disproportionate treatment: R. v. Nur, 2015 SCC 15, [2015] 1 S.C.R. 773, at paras. 39, 57. The s. 12 inquiry requires a consideration of the purposes of the impugned treatment, the effect of that treatment on the offender, and the rationality and justification for the treatment when tested against the recognized principles of sentencing: Chung, at para. 121.

[16] The trial judge first rejected the submission that the fine in lieu of forfeiture provisions were grossly disproportionate as applied to the respondent in the actual circumstances of the case. He then turned to a consideration of other reasonably foreseeable cases, sometimes referred to as “reasonable hypotheticals”.

[17] The trial judge identified two hypotheticals, one he referred to as the “victim-offender”, and the other as the “addict-offender”. The “victim-offender” was a young Indigenous female who was in a highly abusive relationship. She had engaged in criminal activity, usually drug trafficking, giving rise to the fine in lieu of forfeiture application under the direction, if not coercion, of her abusive partner. The “addict-offender” was addicted to alcohol, drugs, or perhaps something else, and engaged in the criminal activity giving rise to the fine in lieu of forfeiture application to service that addiction.

[18] The trial judge attributed a number of the same or very similar characteristics to both hypothetical offenders. The characteristics included an abusive childhood, abject and unrelenting poverty, limited education and work skills, physical and mental disabilities, and other vulnerabilities.

[19] The personal characteristics the trial judge attributed to the hypothetical offenders are all relevant to the personal culpability of the offender and would serve to mitigate the sentence to be imposed for the criminal offence underlying the forfeiture application: see e.g., R. v. Sharma, 2022 SCC 39, 84 C.R. (7th) 1, at para. 108, rev’g 2020 ONCA 478, 152 O.R. (3d) 209, aff’g 2018 ONSC 1141, 44 C.R. (7th) 341. The trial judge treated these same factors as relevant to the offender’s moral culpability for the purposes of determining the constitutionality of the fine in lieu of forfeiture provisions.

[20] In addition to personal factors relevant to the culpability of the hypothetical offenders, the trial judge described the circumstances in which those hypothetical offenders engaged in the criminal conduct giving rise to the fine in lieu of forfeiture application. In both hypotheticals, the offenders played no role in the criminal enterprise beyond the delivery of the contraband to the ultimate purchaser at the direction of a higher up in the organization, often an abusive partner. In both hypotheticals, the offenders gained little, if anything, financially from their participation in the drug trafficking activity. They had no real stake in the ongoing criminal operation or the success of the scheme their conduct serviced.

[21] The reasonable hypotheticals used by the trial judge also involved offenders who, because of the value of the proceeds of crime in their possession, would be required to pay significant fines if forfeiture of the proceeds could not be made. On the hypotheticals, the offenders had no ability to pay a significant fine, and no reasonable prospects of being able to pay that kind of fine in the reasonably foreseeable future.

[22] The trial judge relied heavily on R. v. Boudreault, 2018 SCC 58, [2018] 3 S.C.R. 599, in holding that the fine in lieu of forfeiture provisions constituted cruel and unusual treatment. Boudreault involved a challenge to the mandatory victim surcharge in s. 737 of the Criminal Code. That section, as it read when considered in Boudreault, imposed a mandatory minimum monetary penalty on all persons convicted of any offence. The victim surcharge has been amended several times. The details of the provision, as considered in Boudreault, are set out in the dissenting reasons of Côté J., at paras. 115-22. In the initial version of the victim surcharge, there was a discretion to not impose the surcharge: An Act to Amend the Criminal Code (Victims of Crime), R.S.C. 1985, c. 23 (4th. Supp.), s. 6. That discretion was removed in 2013: Increasing Offenders’ Accountability for Victims Act, S.C. 2013, c. 11, s. 3. It is this version of s. 737 that was declared unconstitutional in Boudreault. The provision has since been amended to reintroduce the discretion to not order payment of a victim surcharge. The circumstances in which that discretion can be exercised are set out in the statute and appear to be narrower than the discretion contemplated in the initial version of the provision: see ss. 737(2.1)-(2.4).

[23] Although the provision set a mandatory minimum penalty, the sentencing judge could impose a higher surcharge. A surcharge was imposed for each conviction and the amounts of the surcharges were cumulative. The offender’s ability to pay the surcharge was irrelevant to the imposition of the surcharge. The time to pay the surcharge was pre-set without reference to the circumstances of the offence or the individual offender. In Boudreault, Côté J., in dissent, at para. 117, indicates that in Ontario, offenders convicted of summary conviction offences were given 30 days to pay the victim surcharge. Offenders convicted of indictable offences were given 60 days. The time to pay was very short and ran from the imposition of the surcharge even if a term of imprisonment was imposed. An offender could apply for an extension of time to pay the surcharge. Default on the payment of the surcharge, like default on a payment of a fine, could ultimately lead to incarceration if the default was found to be wilful.

[24] In Boudreault, the majority held that s. 737 imposed a de facto indefinite sentence on offenders who, through no fault of their own, could not ever reasonably expect to be able to pay the victim surcharge. For those offenders, the psychological burden of being subjected to a sentence they could not complete, combined with the humiliation of repeated requests for extensions, and the threat of incarceration, at least briefly, until an extension was granted, amounted to cruel and unusual punishment: Boudreault, at paras. 76-77, 94.

[25] The trial judge held that offenders, like those described in his hypotheticals, who, through no fault of their own, could not realistically be expected to be able to pay a fine imposed in lieu of forfeiture, were in the same position as the offenders described in Boudreault. In fact, persons facing a fine in lieu of forfeiture would often be worse off because the fines, equal to the value of the proceeds of crime, would almost inevitably be much higher than the amounts imposed as a victim surcharge. The trial judge concluded that persons facing large fines, who had no realistic expectation of being able to pay the fines, were serving an indeterminate sentence, whether the fine was imposed in lieu of forfeiture, or as a victim surcharge. Borrowing from the language in Boudreault, the trial judge concluded that requiring offenders like those described in his reasonable hypotheticals to pay a fine in lieu of forfeiture and face the possibility of imprisonment for default would:

[O]utrage standards of decency, and is intolerable to Canadian society. It is a treatment of an offender that is grossly disproportionate in its application.

IV Positions of the Parties

[26] The appellant accepts that offenders with the characteristics of the offenders described in the trial judge’s hypotheticals could reasonably be faced with orders requiring payment of a fine in lieu of forfeiture with imprisonment on default of that payment. The court was not, however, referred to any actual case in which persons fitting the descriptions of the hypothetical offenders were ever actually ordered to pay a fine in lieu of forfeiture, or imprisoned in default of payment of the fine. The offenders described in the hypotheticals are sadly typical of many offenders who act as the ultimate retailers in drug transactions. These offenders find themselves in possession, albeit usually briefly, of the money paid for the drugs by the purchaser. If the funds are not available for forfeiture, the offender’s brief possession of the funds may subject her to a fine in lieu of forfeiture and potential imprisonment if that fine is not paid.

[27] The appellant does, however, launch a vigorous challenge to the trial judge’s s. 12 analysis as applied to the fine in lieu of forfeiture provisions. Counsel for the appellant submits that this court held in Chung that the fine in lieu of forfeiture provisions did not contravene s. 12 of the Charter. The trial judge was bound by Chung. Alternatively, counsel submits that if Chung is not binding, the trial judge’s analysis does not give proper effect to the many important differences between the operation of the victim surcharge provisions and the fine in lieu of forfeiture provisions. The appellant contends that these distinctions exist in respect of the offenders considered in Chung, and apply with equal force to the offenders presented in the reasonable hypotheticals put forward by the trial judge. Counsel argues that a proper consideration of the differences compels the conclusion arrived at in Chung. The provisions do not offend s. 12 of the Charter.

[28] Counsel for the respondent submits that the trial judge properly concluded he was not bound by Chung, given the very different reasonable hypotheticals placed before him. The respondent further contends that the trial judge correctly found that the analysis in Boudreault was applicable to the fine in lieu of forfeiture provisions. The distinctions between the victim surcharge and the fine in lieu of forfeiture provisions do not ultimately alter the fundamental reality that both the victim surcharge provisions and the fine in lieu of forfeiture provisions can, in reasonably foreseeable circumstances, impose a never-ending punishment on offenders who, through no fault of their own, have no realistic possibility of getting out from under the victim surcharge, or the fine in lieu of forfeiture. Counsel contends that an order which effectively imposes an indeterminate sentence must be grossly disproportionate and therefore in violation of s. 12 of the Charter.

V The Statutory Provisions

[29] Counsel’s submissions can only be properly understood and addressed with a full appreciation of the relevant legislation.

[30] Part XII.2 of the Criminal Code, entitled “Proceeds of Crime”, was introduced in 1989. Part XII.2 targeted criminal activity by focusing not only on the personal criminal responsibility of individuals engaged in a criminal enterprise, but also on the seizure and forfeiture to the Crown of the direct and indirect proceeds of that criminal activity: R. v. Lavigne, 2006 SCC 10, [2006] 1 S.C.R. 392, at paras. 8-9. As this court said in R. v. Wilson (1993), 15 O.R. (3d) 645 (C.A.), at p. 649:

The purpose of Part XII.2 is clear. It is intended to give effect to the age old adage that crime does not pay. It is now recognized that some crime is big business, and that massive profits, both direct and indirect, can be made from criminal activity. Part XII.2 is a response to that realization and provides a comprehensive scheme whereby those direct and indirect profits may be located, seized and eventually forfeited to the Crown.

[31] Part XII.2 creates new substantive offences (e.g., laundering the proceeds of crime, s. 462.31), authorizes new investigative powers (e.g., s. 462.32), and creates new criminal remedies (e.g., restraining orders, s. 462.33). Most importantly for present purposes, Part XII.2 introduced provisions allowing the court to order the proceeds of crime obtained through the commission of designated offences forfeited to the Crown. The phrases “proceeds of crime” and “designated offence” are defined terms with broad meanings in Part XII.2: see Criminal Code, s. 462.3(1). The word “property”, a defined term in the Criminal Code, also has a wide meaning: Criminal Code, s. 2.

[32] There are three components to the forfeiture regime established in Part XII.2. First, the court must, subject to certain specified exceptions, order the forfeiture of the proceeds of crime obtained through the commission of the offence for which the offender is being sentenced. Second, if the forfeitable property is not available for forfeiture, the court may seek to achieve the equivalent of a forfeiture order by way of an order requiring the offender to pay a fine equal to the value of the property that would have been forfeited had it been available. Third, and at the same time that the fine is imposed, the court must, as a means of encouraging payment of the fine, impose a term of imprisonment in default of payment. The term must be within the range provided in the statute. An offender can be imprisoned for non-payment of the fine only if the offender wilfully defaults on the payment.

(i) The forfeiture provision

[33] The forfeiture provision is set down in s. 462.37(1). The constitutionality of that provision was not challenged. The section reads as follows:

Order of forfeiture of property

462.37 (1) Subject to this section and sections 462.39 to 462.41, if an offender is convicted, or discharged under section 730, of a designated offence and the court imposing sentence on or discharging the offender, on application of the Attorney General, is satisfied, on a balance of probabilities, that any property is proceeds of crime obtained through the commission of the designated offence, the court shall order that the property be forfeited to Her Majesty to be disposed of as the Attorney General directs or otherwise dealt with in accordance with the law.

[34] Section 462.37(1) directs that if an offender is convicted of a designated offence and if the court is satisfied on the balance of probabilities that any property is proceeds of crime obtained through the commission of the designated offence for which the offender is convicted, the court shall order that property forfeited to the Crown: Lavigne, at paras. 11-17; R. v. Schoer, 2019 ONCA 105, 371 C.C.C. (3d) 292, at paras. 86-88.

[35] Forfeiture orders are part of the sentencing process, but are not governed by the sentencing principles in Part XXIII of the Criminal Code. A forfeiture order and any consequential enforcement order, such as an order imposing a fine in lieu of forfeiture, are not part of the sentence for the purposes of determining the fitness of the sentence imposed for the underlying offence: see R. v. Saikaley, 2017 ONCA 374, 135 O.R. (3d) 641, at para. 181, leave to appeal refused, [2017] S.C.C.A. No. 284; Schoer, at para. 93; and R. v. Angelis, 2016 ONCA 675, 133 O.R. (3d) 575, at paras. 39-40, leave to appeal refused, [2016] S.C.C.A. No. 484.

[36] Forfeiture orders, and related orders like an order requiring payment of a fine in lieu of forfeiture, are not intended as punishments for the underlying offence. Instead, they are imposed to deprive offenders of ill-gotten gains and to deter offenders and other like-minded persons from participating in that kind of criminal activity in the future. The broad and uncompromising nature of the forfeiture power in s. 462.37(1) is designed to achieve those objectives: Lavigne, at paras. 14-17.

[37] If the criteria in s. 462.37(1) are met, a forfeiture order is mandatory: Lavigne, at para. 15; Schoer, at para. 88. Section 462.37(1) does not contemplate any exceptions to a forfeiture order based on factors that could mitigate the seriousness of the underlying offence, the culpability of the particular offender, or any specific hardship a forfeiture order could impose on an offender. If the property in issue is properly subject to forfeiture, and is available for forfeiture, no offender, no matter how sympathetic or lacking in moral culpability for the underlying offence, gets to keep the direct or indirect proceeds of the crime. For example, an offender like one described in the trial judge’s hypotheticals, who was in possession of the proceeds of a drug sale, would be required to forfeit those proceeds to the Crown no matter how non-culpable her involvement in the drug transaction, and no matter how desperate her personal circumstances.

(ii) Fine in lieu of forfeiture

[38] Often, property which meets the requirements for forfeiture is not available for forfeiture at the time the offender is sentenced. Usually, the offender will have spent the proceeds. Sometimes the forfeitable property is beyond the reach of the Crown for some other reason. Absent some means of enforcing forfeiture orders when the property is no longer available, forfeiture orders would have a limited value, either as deterrence, or as a means of depriving offenders of ill-gotten gains. A fine in lieu of forfeiture is a substitute for forfeiture and seeks to achieve the same objectives. Section 462.37(3) provides as follows:

Order of forfeiture of property

462.37 …

Fine instead of forfeiture

(3) If a court is satisfied that an order of forfeiture under subsection (1) or (2.01) should be made in respect of any property of an offender but that the property or any part of or interest in the property cannot be made subject to an order, the court may, instead of ordering the property or any part of or interest in the property to be forfeited, order the offender to pay a fine in an amount equal to the value of the property or the part of or interest in the property. In particular, a court may order the offender to pay a fine if the property or any part of or interest in the property

(a) cannot, on the exercise of due diligence, be located;

(b) has been transferred to a third party;

(c) is located outside Canada;

(d) has been substantially diminished in value or rendered worthless; or

(e) has been commingled with other property that cannot be divided without difficulty.

[39] A fine in lieu of forfeiture may be imposed if property that should have been the subject of a forfeiture order cannot be made the subject of a forfeiture order. Sections 462.37(3)(a)-(e) provide examples of situations in which property that should have been ordered forfeited is not available for forfeiture. The examples are not exhaustive of the circumstances in which forfeitable property will not be available for forfeiture.

[40] A fine in lieu of forfeiture order can only be made in respect of “any property of an offender”: R. v. Dwyer, 2013 ONCA 34, 296 C.C.C. (3d) 193, at para. 24; R. v. Piccinini, 2015 ONCA 446, at para. 10. As explained by Rosenberg J.A., at para. 24, in Dwyer:

[A]n order for a fine in lieu of forfeiture can be made under s. 462.37(3) only where the offender has possession or control of the property in question or at least had possession of the property at some point. This conclusion flows from the use of the phrase “any property of an offender” in s. 462.37(3) and the definition of “property” in s. 2. Such an interpretation is consistent with the objectives of s. 462.37, which are to deprive offenders of the proceeds of crime and ensure that they do not benefit from those proceeds [citation omitted]. Those objectives would not be furthered by making orders in relation to property that was never in the possession of the offender, over which the offender never had control and from which the offender did not benefit [citation omitted]. [Emphasis added.]

[41] Like forfeiture orders, fines in lieu of forfeiture are not imposed as punishment for the underlying offence. The purposes and principles of sentencing set down in Part XXIII of the Criminal Code have no direct application. A fine in lieu of forfeiture seeks to give full force to the forfeiture power by requiring payment of a fine equal to the value of the property that would have been forfeited had it been available for forfeiture, and by imposing significant jail terms for a wilful default on the payment of the fine. Fines in lieu of forfeiture, and the jail terms which may follow if the fines are not paid, are both enforcement mechanisms called on in aid of the attempt to divest offenders of the proceeds of their criminal conduct: R. v. Khatchatourov, 2014 ONCA 464, 313 C.C.C. (3d) 94, at para. 56.

[42] In R. v. Vallières, 2022 SCC 10, 412 C.C.C. (3d) 335, at para. 24, the court explained the nature of the fine in lieu of forfeiture order:

Although a fine in lieu is technically part of a sentence pursuant to s. 673 Cr. C., such an order differs from the sentence imposed for the commission of a designated offence in that its purpose is to replace the proceeds of crime rather than to punish the offender [citation omitted]. A fine in lieu is therefore, first and foremost, in the nature of a forfeiture order. It has consistently been held that the forfeiture inquiry is independent of the broader inquiry undertaken with respect to sentencing and the principles related thereto [citations omitted]. [Emphasis added.]

[43] Because a fine in lieu of forfeiture is intended to replace the property that would have been ordered forfeited had it been available, the fine imposed is equal to the value of the property of the offender that would have been forfeited had it been available. The value of the property is a question of fact. The value of the property is not, however, limited to the benefit or gain accruing to the offender. For example, in this case, the respondent testified he made a profit of $6,000 to $7,000 from the sale of the drugs. The parties agreed, however, that the value of the drugs was the amount paid for the drugs by the purchaser ($74,560): Vallières, at para. 26; Piccinini, at para. 19; and R. v. S.(A.), 2010 ONCA 441, 258 C.C.C. (3d) 13, at para. 14.

[44] Two features of the fine in lieu of forfeiture provisions require special attention in that they can significantly mitigate the impact of those provisions in some circumstances. First, although the amount of the fine is equal to the value of the property, the court has the power to apportion that value among offenders who would be subject to a fine in lieu of forfeiture in respect of that property upon conviction. Second, unlike the forfeiture provision, the power to order a fine in lieu of forfeiture is discretionary. A judge can decline to order a fine in lieu of forfeiture, even if the Crown has established the prerequisites to that order.

[45] Dealing first with apportionment, several cases have recognized that the value of the property can be apportioned among different offenders involved in the criminal activity to which the criminal proceeds are related. Apportionment aims to avoid double recovery, while at the same time reflecting, at least to some extent, the actual benefits that have accrued to individual offenders: Vallières, at paras. 38-50; Chung, at para. 101; R. v. Dieckmann, 2017 ONCA 575, 355 C.C.C. (3d) 216, at paras. 98-101, leave to appeal refused, [2017] S.C.C.A. No. 381 and [2018] S.C.C.A. No. 304.

[46] The full scope of the power to apportion a fine among co-offenders is unsettled at this stage. The Criminal Code does not address apportionment, and there are relatively few cases that have considered the subject. In Vallières, at para. 49, the court indicated that the power to apportion the value of the property among co-offenders must be exercised according to the circumstances of each case.

[47] Although the full extent of the power to apportion the value of a fine among co-offenders remains unclear, the trial judge was, with respect, wrong in his observation that apportionment could only be used if the offenders were before the sentencing court. The decided cases to date include examples in which sentencing courts have apportioned the value of the property for the purposes of imposing a fine in lieu of forfeiture, even though offenders included in the apportionment were not before the sentencing court and could not be brought before the sentencing court: see e.g., Dieckmann, at paras. 98-101. Nor, as suggested by the trial judge, must the possibility of apportionment be rejected in those cases where proceedings against other offenders who could have been the subject of apportionment have been stayed or discontinued for reasons unrelated to the merits of the allegation. As said in Vallières, at para. 49:

[T]he court need only find that the available evidence would have allowed it to impose a fine on the co-accused if they had been before it, thereby justifying apportionment based on the risk of double recovery.

[48] In my view, apportionment is a distinct possibility in the hypothetical situations described by the trial judge. The ultimate availability of apportionment would depend on the entirety of the circumstances in the individual case.

[49] I turn next to the discretion to decline to order a fine in lieu of forfeiture. The existence of that discretion is clear from the language of s. 462.37(3): “a court may order the offender to pay a fine”.

[50] The nature of the discretion in s. 462.37(3) was considered at some length in Lavigne. The court was asked to decide whether an offender’s ability to pay the fine imposed was relevant to the sentencing judge’s exercise of her discretion to not impose a fine in lieu of forfeiture. The court held that the offender’s ability to pay was irrelevant to the sentencing judge’s exercise of her discretion: Lavigne, at paras. 30-37, 44. In the court’s view, considering the offender’s ability to pay would undermine the objectives of the forfeiture provisions.

[51] Lavigne did, however, acknowledge that sentencing judges had a “limited” discretion to decline to impose a fine in lieu of forfeiture: Lavigne, at paras. 1, 27, and 29. Sentencing judges were, however, required to exercise that discretion in a manner consistent with the language of s. 462.37(3), read as a whole, and with the objectives of Part XII.2 in mind: Lavigne, at paras. 26-27, 34. To make the point that the exercise of the discretion had to promote, or at least not undermine, the objectives of Part XII.2, Deschamps J., writing for a unanimous court, at para. 28, provided an example of a situation in which the refusal to impose a fine in lieu of forfeiture would not undermine the objectives of the legislation. That example involved an offender who trafficked in drugs on a single occasion, did not profit from her crime, and acted alone. It is fair to say that offenders who fit that description are a rarity.

[52] Some have argued that the very narrow exception drawn by Deschamps J. in her example describes the full ambit of the discretion to not impose a fine in lieu of forfeiture available under s. 462.37(3). This is how the trial judge read Lavigne. Justice Deschamps was, however, careful to acknowledge that different factual circumstances could give rise to the exercise of the discretion against imposing a fine. She expressly limited her analysis to cases turning on the offender’s inability to pay the fine: Lavigne, at para. 29.

[53] The single example provided in Lavigne to make the point that the discretion was a narrow one, cannot be read as setting out the full metes and bounds of the discretion in s. 462.37(3). In Lavigne, the court tied the exercise of the discretion in s. 462.37(3) to the achievement of the objectives of the forfeiture provisions. The majority in R. v. Rafilovich, 2019 SCC 51, [2019] 3 S.C.R. 838, at para. 53, speaking through Martin J., reiterated the link between the exercise of the discretion and the objectives of the forfeiture provisions. This court has drawn the same connection. In Schoer, at para. 90, Fairburn J.A. (as she then was) observed:

The use of the discretionary “may” connotes a discretion to impose a fine instead of forfeiture, a discretion that is only available where making an order of forfeiture is impractical or impossible [citation omitted]. The exercise of discretion arising from the word “may” in s. 462.37(3) is restricted by the “objective of the provision, the nature of the order and the circumstances in which the order is made” [citations omitted].

[54] The case law provides examples where the discretion in s. 462.37(3) has been exercised in situations other than those described in the example provided in Lavigne. In Rafilovich, the majority held that the court could exercise a discretion against ordering a fine in lieu of forfeiture if the criminal proceeds which would have been subject to forfeiture were no longer available and had been used by the offender to retain counsel on the charge.

[55] In R. v. Henn, 2022 ONCA 768, this court declined to impose a fine in lieu of forfeiture in circumstances in which the objectives of the forfeiture provisions were fully served by the terms of the restitution and probation orders made by the trial judge: see also R. v. G.M., 2020 QCCQ 3252, aff’d 2021 QCCA 328, leave to appeal refused, [2021] S.C.C.A. No. 126.

[56] The scope and application of the discretion in s. 462.37(3) to decline to order a fine in lieu of forfeiture cannot be exhaustively described in the abstract. The question must be as follows: can the objectives of the forfeiture provisions be fully served without imposing a fine in lieu of forfeiture on a particular offender? I would suggest, that in cases involving offenders like those described by the trial judge in his hypotheticals, a sentencing judge could take into account factors such as the following:

• Was the forfeitable property ever in the actual control or possession of the offender, except perhaps momentarily and in a technical sense?
• Did the offender benefit from the criminal activity and, if so, how?
• Did the offender have any stake in the ongoing criminal enterprise said to have generated the criminal proceeds?
• Has the offender cooperated with the authorities by identifying others engaged in the criminal activity, who played a more significant role than the offender, and who may well be in possession of the proceeds of crime which can be subject to forfeiture, or have the means of paying a fine in lieu of forfeiture? Exercising the discretion to not require a fine in lieu of forfeiture in a way that promoted the recovery of the criminal proceeds or an equivalent fine would promote the objectives of Part XII.2 of the Criminal Code.

(iii) Imprisonment for default of payment

[57] If the sentencing court orders payment of a fine in lieu of forfeiture, that court must, at the same time, fix the amount of the fine and the term of imprisonment to be served in default of payment. Section 462.37(4) sets out a minimum and maximum sentence available depending on the amount of the fine. The larger the fine, the longer the potential sentence for default. For example, s. 462.37(4)(iv), the applicable provision in this case, provides for a term of imprisonment:

…of not less than eighteen months and not exceeding two years, where the amount of the fine exceeds fifty thousand dollars but does not exceed one hundred thousand dollars.

[58] Fines imposed in lieu of forfeiture under s. 462.37(3) are subject to many, but not all of the provisions in Part XXIII of the Criminal Code applicable to fines imposed as a punishment for an offence. Notably, s. 734(2), which requires the court to be satisfied that an offender is able to pay a fine before the court imposes the fine, does not apply to fines in lieu of forfeiture. The fine option program in s. 736 is also unavailable in respect of fines imposed in lieu of forfeiture: s. 462.37(5). The sentencing court imposing a fine in lieu of forfeiture must fix a time within which payment must be made. There is no limit on the amount of time an offender can be given to pay. Time to pay begins to run only after the offender is released from custody if a term of imprisonment is imposed for the underlying offence: R. v. Maxwell, 2014 ONCA 316, at para. 9. The sentencing court may also set a payment schedule, or impose other terms of payment: Criminal Code, s. 734.1. An offender’s ability to pay the fine is a relevant consideration when fixing time to pay and imposing terms of payment: Lavigne, at paras. 47-48.

[59] If a court imposes a fine in lieu of forfeiture, it must provide a copy of the order to the offender, explain to the offender how the terms of the order can be varied at the request of the offender, and take reasonable steps to ensure the offender understands the terms of the order: Criminal Code, s. 734.2. Any partial payment of the fine results in an equivalent reduction of the jail term: Criminal Code, s. 734.8(2).

[60] The court that imposed the sentence, or a person designated by the court, may extend the time to pay the fine, and vary other terms referable to the fine, except for the term fixing the amount to be paid: Criminal Code, s. 734.3. There are no limits on the numbers of extensions that can be given. Nothing in the applicable provisions of the Criminal Code prevents granting extensions of time to pay, and making other variations in the terms of payment, after the offender has defaulted on payment: see R. v. Yamelst (1975), 22 C.C.C. (2d) 502 (B.C.S.C.), at pp. 508-9. The offender’s ability to pay is obviously an important consideration on any application to extend the time to pay beyond the date set for payment.

[61] If the fine has not been paid and the time for payment has expired, the court may conduct a committal hearing in the presence of the offender. The offender’s attendance may be compelled by summons or, if the statutory conditions precedent are met, by warrant. The sentencing court may not issue an order committing the offender to custody unless the court is satisfied that the alternative enforcement measures in s. 734.5 (licence suspensions and denials), and s. 734.6 (civil judgments) are not an appropriate manner in which to enforce the fine.

[62] Even if all of the other criteria are met, the court cannot direct that the offender be committed to custody for non-payment unless the court is satisfied that the offender has without reasonable excuse refused to pay the fine: Criminal Code, s. 734.7(1)(b)(ii). In R. v. Wu, 2003 SCC 73, [2003] 3 S.C.R. 530, at paras. 60-66, the words “refused to pay” were treated as meaning a wilful refusal to pay, and not non-payment based on an inability to pay because of poverty: Chung, at paras. 104, 160.

VI Grounds of Appeal

A. Was Chung binding on the trial judge?

[63] In his reasons, the trial judge acknowledged that this court had recently upheld the constitutionality of the fine in lieu of forfeiture provisions which were being challenged before him. He accepted that in the normal course, he was bound by the decision of this court. The trial judge was satisfied, however, that the result in Chung was not binding on him because the reasonable hypotheticals considered in Chung were radically different from the hypotheticals raised before him. In the trial judge’s view, the differences in the hypotheticals significantly changed the nature of the constitutional challenge and the s. 12 analysis.

[64] Counsel for the respondent contends the trial judge was correct in holding he could come to his own determination of the constitutionality of the provisions, no doubt guided by the analysis in Chung. Counsel submits that the very different hypotheticals raised before the trial judge put in play considerations relevant to the constitutional analysis that were not present in the hypotheticals relied on in Chung.

[65] The value of precedent would be greatly diminished if a new s. 12 argument could be advanced every time counsel imagined a different reasonable hypothetical. In Nur, at para. 71, McLachlin C.J. (as she then was) drew the distinction between legitimate consideration of truly new hypotheticals and relitigation in contravention of the stare decisis principle:

[C]an the offender in a future case argue that the provision as applied to others violates s. 12? The answer to this question is that it depends. Once a law is held not to violate s. 12, stare decisis prevents an offender in a later case from simply rearguing what constitutes a reasonably foreseeable range of the law. But stare decisis does not prevent a court from looking at different circumstances and new evidence that was not considered in the preceding case. A court’s conclusion based on its review of the provision’s reasonably foreseeable applications does not foreclose consideration in future of different reasonable applications [citation omitted]. That said, the threshold for revisiting the constitutionality of a mandatory minimum is high and requires a significant change in the reasonably foreseeable applications of the law.

[66] I accept that the reasonable hypotheticals used by the trial judge were very different from the reasonable hypotheticals advanced at trial in Chung. However, the determination as to whether the trial judge was ultimately bound by Chung cannot turn simply on a comparison of the reasonable hypotheticals that were before the respective courts. The real question is, did Chung decide the constitutionality of the fine in lieu of forfeiture provisions as they applied to offenders like those described in the hypotheticals used by the trial judge? If the answer is yes, the trial judge was bound by Chung regardless of the reasonable hypotheticals considered in Chung. That question can only be answered by reference to the arguments made in Chung and the reasons given by this court for dismissing the constitutional challenge in Chung.

[67] In Chung, the three accused were involved in a multi-million dollar fraud on the Ontario Lottery and Gaming Corporation. Two of the three accused received substantial jail sentences, were ordered to forfeit several million dollars, were ordered to pay restitution of over $12,000,000, and were ordered to pay a fine in lieu of forfeiture of $2,300,000 each.

[68] At the sentencing, the same two accused challenged the constitutionality of the fine in lieu of forfeiture provisions, arguing they violated s. 12 of the Charter. They submitted that a minimum sentence of not less than five years for default in payment of the fine, as required under the statute, constituted cruel and unusual treatment. Those accused also challenged the fine in lieu of forfeiture provisions under s. 7. They alleged that it offended procedural due process to impose the jail term at the time the fine in lieu of forfeiture was imposed rather than at the time of default. This argument was rejected in Chung, at paras. 111-14, and is not germane to this appeal.

[69] The trial judge in Chung described the narrow ambit of the constitutional challenge to the fine in lieu of forfeiture provisions in his reasons for sentence: R. v. Chung, 2018 ONSC 6633, 424 C.R.R. (2d) 1, at para. 14:

Ms. Presser [counsel for one of the accused] points out that the constitutional challenge is carefully tailored to focus only on the minimum terms of imprisonment fixed by s. 462.37(4) of the Code. There is no challenge to the overall scheme of the system of fines in lieu of forfeiture, with terms of imprisonment in default.

[70] In support of the constitutional argument summarized above, counsel advanced four hypotheticals. All involved offenders who had been ordered to pay fines in lieu of forfeiture of $1,500,000. In the hypotheticals, the offenders had not paid the fines owed by the due date for various reasons, ranging from poor investments, to addiction, to lifestyle choices. The accused argued that in the circumstances presented in the hypotheticals, a five-year minimum sentence in default of payment (with adjustments for any amounts paid on the fine) was so grossly disproportionate as to amount to cruel and unusual treatment.

[71] The trial judge rejected the s. 12 argument. He released his reasons a little over a month before the Supreme Court of Canada released its reasons in Boudreault. There was no argument before the trial judge based on any analogy between the fine in lieu of forfeiture provisions and the victim surcharge provisions. Not surprisingly, the trial judge made no reference to the victim surcharge provisions in his analysis of the constitutional challenge advanced before him.

[72] By the time Chung reached this court in October 2020, Boudreault had been decided. Although the appellants in Chung did not alter the hypotheticals they had relied on at trial, they did significantly expand their s. 12 argument. The analysis of the victim surcharge in Boudreault became the centrepiece of the appellants’ constitutional challenge. For example, relying on Boudreault, counsel submitted in their factum that:

[T]he need to continually return to court to apply for extensions of time to pay effectively exposes impecunious offenders to an indeterminate sanction.

[73] Like the arguments which found favour with the trial judge in this case, the arguments advanced on appeal in Chung rested on the contention that the effect of the fine in lieu of forfeiture provisions on impoverished and marginalized offenders was no different than the effect of the victim surcharge provisions imposed on the same offenders and determined to be unconstitutional in Boudreault.

[74] This court, in Chung, considered the application of Boudreault to the fine in lieu of forfeiture provisions at some length. The court clearly appreciated that the comparison of the operation of those provisions was being made in the context of the application of the provisions to offenders like those described in Boudreault. As the court observed, the offenders were the impoverished and uneducated, who were grappling with severe addiction, mental illness or physical disability. They were poor, unhoused, addicted, and marginalized: Chung, at paras. 133-36. Those offenders were also the offenders described in the trial judge’s reasonable hypotheticals.

[75] This court rejected the argument that the analysis in Boudreault applied to the fine in lieu of forfeiture provisions. The court pointed to specific differences in the operation of the two schemes, and to the fundamental difference in the objectives of the two sets of provisions: Chung, at paras. 136-39.

[76] Although the hypotheticals in Chung were not altered to include the “Boudreault” hypotheticals, the arguments focused on the characteristics of “Boudreault” offenders. The conclusion in Chung, that the fine in lieu of forfeiture provisions did not constitute cruel and unusual treatment, was made having regard to offenders who shared the same features as the offenders described in Boudreault, and in the trial judge’s hypotheticals.

[77] Chung decided that the fine in lieu of forfeiture provisions were materially different from the victim surcharge provisions and did not violate s. 12 of the Charter when applied to either offenders like the hypotheticals described in Chung, or offenders like those described in Boudreault and by the trial judge in this case. In short, Chung considered and rejected the substance of the s. 12 arguments accepted by the trial judge. The trial judge was obliged to follow Chung.

B. If Chung is not dispositive, do the fine in lieu of forfeiture provisions infringe s. 12 of the Charter?

[78] Assuming Chung was not binding on the trial judge and he was entitled to make his own assessment of whether the fine in lieu of forfeiture provisions complied with s. 12 of the Charter, I would hold the trial judge erred in concluding that the reasoning in Boudreault applied to the fine in lieu of forfeiture provisions, and compelled the conclusion that those provisions contravened s. 12 of the Charter.

[79] There are obvious similarities between the operation of the victim surcharge provisions and the fine in lieu of forfeiture provisions. Most importantly, an offender against whom a victim surcharge is levied, and an offender against whom a fine in lieu of forfeiture is ordered may, through no fault of their own, have no realistic possibility of being able to pay the amount owed when due, or in the reasonably foreseeable future. Both offenders are subject to the same default procedures and will remain subject, potentially indefinitely, to the court order requiring payment and any negative consequences flowing from that order.

[80] For some offenders, like those described by the trial judge in his reasonable hypotheticals, many would regard the imposition of a fine in lieu of forfeiture, particularly a significant fine, to be a harsh and counterproductive order. However, neither of those adjectives describes the test for compliance with s. 12 of the Charter. The test for demonstrating a breach of s. 12 is “very properly stringent and demanding”: Boudreault, at para. 45. The offender must demonstrate that the application of the fine in lieu of forfeiture provisions, in reasonably foreseeable cases, results in treatment that would be grossly disproportionate when compared to an appropriate treatment of the offender. A treatment that is excessive, disproportionate, or unfit, is not necessarily unconstitutional. The treatment must be “abhorrent or intolerable”: R. v. Ferguson, 2008 SCC 6, [2008] 1 S.C.R. 96, at para. 14; Boudreault, at para. 45.

[81] The s. 12 analysis requires the courts to consider three factors:

• the purpose of the provision;
• the impact of the provision on the offender; and
• recognized sentencing principles: Chung, at para. 121.

[82] The three-step analysis described above fits most comfortably with a claim that a sentence amounts to cruel and unusual punishment. This case is concerned with a treatment, albeit a treatment in a penal context. While certain considerations relevant to the punishment of offenders for criminal offences remain germane, many of those principles have no direct application: Chung, at para. 139.

[83] The fine in lieu of forfeiture provisions have a different rationale and purpose than the victim surcharge provisions. The fine in lieu of forfeiture is ordered as a substitute for forfeiture of the proceeds of crime, and is a means of enforcing a forfeiture order. The fine in lieu of forfeiture provisions seek recovery of criminal proceeds or their equivalent value, and are not punishment for the underlying offence. Many of the controlling principles and objectives of sentencing are inapplicable to applications for forfeiture or a fine in lieu of forfeiture: Chung, at para. 139; Vallières, at para. 24.

[84] The victim surcharge is part of the sentence imposed on the offender as punishment for the underlying offence. The victim surcharge is imposed in addition to any other punishment imposed: Criminal Code, s. 737(1).

[85] The constitutionality of the victim surcharge must be tested, in part, by reference to its compliance with the principles and objectives of sentencing as laid out in Part XXIII of the Criminal Code. Sentencing is an individualized process. The offender’s personal culpability and the specific circumstances of the offence are central to the setting of a proportionate and fit sentence. Proportionality is the fundamental principle of sentencing: Criminal Code, s. 718.1. In addition to proportionality, the purposes of sentencing identified in s. 718, including rehabilitation of the offender, must be factored into the fixing of the appropriate sentence for the offender.

[86] The victim surcharge provisions, as considered in Boudreault, ignore the fundamental principle of proportionality. The offender’s moral culpability for the underlying offence is rendered irrelevant to the imposition of the victim surcharge. The arbitrary and mandatory nature of the victim surcharge makes it inevitable that in some cases the imposition of the surcharge will result in a sentence that is unfit when tested against the principles and objectives of sentencing laid out in Part XXIII of the Criminal Code: Boudreault, at paras. 57-58.

[87] Because a fine in lieu of forfeiture is not a punishment for the underlying offence, the principles and purposes of sentencing laid out in Part XXIII of the Criminal Code are not the litmus against which the fitness of the imposition of a fine in lieu of forfeiture must be tested. Nor does the personal culpability of the offender for the underlying offence have any direct relevance to the appropriateness of the imposition of a fine in lieu of forfeiture. Personal factors, like those referred to by the trial judge in his hypotheticals, e.g., poverty, addiction and childhood abuse, which explain the offender’s involvement in the criminal activity, and must mitigate the sentence imposed for the crime, would provide no basis for any relief from forfeiture if the offender was in possession of the criminal proceeds. It follows that those factors should be equally irrelevant to whether a fine in lieu of forfeiture, a substitute for forfeiture when forfeiture is impossible, should be imposed.

[88] I would add one caveat. In some cases, some of the same personal circumstances relevant to the offender’s moral culpability for the offence may also be relevant to the operation of the fine in lieu of forfeiture provisions. Some of the offender’s personal circumstances may be relevant to the court’s exercise of its discretion to not impose a fine in lieu of forfeiture under s. 462.37(3). The offender’s circumstances may also be relevant to whether the offender benefitted from the proceeds, or was in possession, or control, of those proceeds. Absent any benefit, possession or control, a fine in lieu of forfeiture cannot be made against an offender: s. 462.37(3).

[89] In applying the analysis from Boudreault to the fine in lieu of forfeiture provisions, the trial judge repeatedly stressed the diminished moral culpability for the underlying offences of the offenders described in his reasonable hypotheticals. The trial judge treated the offenders’ moral culpability for the underlying offence as equally significant to his s. 12 analysis as it had been to the s. 12 analysis in Boudreault. In doing so, the trial judge failed to recognize that, unlike the victim surcharge, the fine in lieu of forfeiture was not part of the punishment for the offence and was not subject to the principles and objectives of sentencing. The trial judge erred in treating the offender’s moral culpability for the underlying offence as a significant factor in determining whether the imposition of a fine in lieu of forfeiture constituted grossly disproportionate treatment.

[90] The appellant also relies on the discretionary nature of the fine in lieu of forfeiture order under s. 462.37(3) compared to the mandatory nature of the victim surcharge in support of the submission that the analysis in Boudreault does not apply to the fine in lieu of forfeiture provisions. As discussed above, the victim surcharge, as it existed at the time of Boudreault, was mandatory in every sense of the word. The fine in lieu of forfeiture provision, however, clearly allows for some discretion, permitting the sentencing judge to decline to make the order even though the criteria in the section are met. I have discussed the nature of the discretion above (see paras. 49-56).

[91] The trial judge determined that the discretion in s. 462.37(3) to decline to order a fine in lieu of forfeiture was so narrow as to have little relevance to his assessment of the constitutionality of the provision. As he put it, at para. 120:

Counsel for the Respondent [the Crown] was unable to point to any compelling example of a circumstance where the limited discretion might be exercised. I have not been able to conjure one myself. As such, I am unable to conclude that the “limited discretion” not to impose a fine in lieu of forfeiture is a particularly meaningful factor from a constitutionality perspective.

[92] The trial judge saw the discretion in s. 462.37(3) as largely irrelevant to the s. 12 inquiry because, in his view, the single example of the exercise of that discretion provided in Lavigne, described the full reach of that discretion. In the trial judge’s view, the circumstances laid out in the example provided in Lavigne would not be applicable to any of the offenders described in the reasonable hypotheticals before him.

[93] For the reasons given above, the trial judge significantly understated the scope of the discretion in s. 462.37(3). The authorities, including Lavigne, at paras. 26-27, and Rafilovich, at para. 53, from the Supreme Court of Canada, and Schoer, at para. 90, from this court, all tie the exercise of the discretion in s. 462.37(3) to the objectives of the fine in lieu of forfeiture provisions. If those objectives are not compromised by declining to order a fine in lieu of forfeiture in a particular case, the trial judge may decline to make that order. By significantly understating the scope of the discretion in s. 462.37(3), the trial judge failed to consider the potential application of that discretion in cases like the reasonable hypotheticals before him.

[94] Although more details would be required before a firm determination could be made, I think the offenders in the hypotheticals considered by the trial judge could well be the beneficiaries of the exercise of the discretion to not impose a fine in lieu of forfeiture. They would be particularly good candidates for the exercise of that discretion, for example, if their cooperation assisted in bringing other members of the criminal organization before the courts, where those other members could be subject to the forfeiture and fine in lieu of forfeiture provisions.

[95] The power of the sentencing court to apportion the “value” of the property for the purposes of determining the quantum of the fine and therefore the potential length of any jail sentence in default can also moderate the effect of the fine in lieu of forfeiture provisions in some of the cases captured by the trial judge’s hypotheticals. The trial judge erroneously limited the power to apportion the value of the proceeds of crime among offenders to co-accused who had been convicted. The case law has recognized a significantly broader power to apportion the value among offenders.

[96] Apportionment might well assist the hypothetical offender who had possession of the proceeds of crime only very briefly before turning them over to her abusive partner. A sentencing court could conclude that the offender was in possession of the funds and therefore liable for a fine in lieu of forfeiture. The court might also, however, determine that the value of the fine should be apportioned between the offender and her abusive boyfriend, and that the apportionment should recognize the much more significant role of the boyfriend. As indicated in Vallières, at para. 49, the court can apportion the value of the property for the purposes of determining the amount of the fine even if the boyfriend is not before the sentencing court.

[97] A final important distinction for the purposes of s. 12 of the Charter between the victim surcharge and the fine in lieu of forfeiture provisions arises out of the very different scope of the application of the two sets of provisions. In Boudreault, at para. 93, the majority described the victim surcharge as a “blanket financial penalty”, applicable regardless of the specifics of the offence or the offender. In the majority’s view, this all encompassing reach of the victim surcharge contributed to the gross disproportionality of the punishment it imposed.

[98] A fine in lieu of forfeiture is not available for all offences, although the definition of “designated offence” includes all indictable offences. More significantly, the fine in lieu of forfeiture provision is available only in cases where the property in issue could have been the subject of forfeiture under s. 462.37(1), was not available for forfeiture at the time of sentencing, and was the “property of an offender”. By limiting the availability of the fine in lieu of forfeiture to the property described, Parliament effectively tied the availability of that remedy to the objectives of the forfeiture provisions.

[99] Parliament further linked the fine in lieu of forfeiture remedy to the criminal proceeds possessed by the offender by making the amount of the fine equal to the value of the property that would have been forfeited had it been available. Linking the amount of the fine directly to the value of the criminal proceeds possessed or controlled by the offender results in fines that have a rational connection to the offence and are proportionate to the offender’s crime: R. v. Pham (2002), 167 C.C.C. (3d) 570 (Ont. C.A.), at para. 19; Boudreault, at para. 93.

[100] In summary, the differences between the victim surcharge provisions and the fine in lieu of forfeiture provisions strongly suggest a different outcome to the s. 12 analysis than was reached by the majority in Boudreault. The fine in lieu of forfeiture is not punishment for the offence, its proportionality is not gauged by reference to the principles and objectives of sentencing, and the moral culpability of the offender for the underlying offence has only indirect, if any, relevance to the imposition of a fine in lieu of forfeiture. The fine in lieu of forfeiture provisions also have a flexibility, rationality and narrowed focus, not found in the victim surcharge provisions.

[101] The respondent’s claim that the fine in lieu of forfeiture provisions impose cruel and unusual treatment comes down to the argument that the effects of the fine in lieu of forfeiture provisions for some offenders, like those described in the hypotheticals, are so oppressive as to constitute cruel and unusual treatment. The effects of the fine in lieu of forfeiture provisions on reasonably foreseeable offenders are an important part of the s. 12 analysis: Boudreault, at paras. 44, 48; Canadian Civil Liberties Association v. Canada (Attorney General), 2019 ONCA 243, 144 O.R. (3d) 641, at para. 91, leave to appeal granted but appeal discontinued, [2019] S.C.C.A. No. 96. However, unlike the s. 12 analysis of the victim surcharge, where several features of the legislation combined with the impact of the legislation on certain offenders to result in gross disproportionality, the challenge to the fine in lieu of forfeiture provisions depends entirely on the argument that the effects of the provisions on some offenders impose grossly disproportionate treatment.

[102] The respondent argues that for offenders like those described in the reasonable hypotheticals, the effect of the imposition of the fine in lieu of forfeiture on the offender is identical to the effect of the imposition of a victim surcharge on the offender. For these offenders, whether subject to a victim surcharge, or a fine in lieu of forfeiture, the stress of indeterminate criminal sanctions, combined with the risk of imprisonment, and the “public shaming” of the need to make repeated requests for extensions of time to pay the penalty, results in cruel and unusual treatment.

[103] I accept that for some offenders the imposition of a fine in lieu of forfeiture, especially a fine of any significant amount, will serve little purpose and seems unnecessary, if not vindictive. I also have no doubt that for some offenders the imposition of a fine in lieu of forfeiture adds hardship and uncertainty to what is already a difficult life. However, as acknowledged in Boudreault, at para. 71, stresses associated with the risk of imprisonment for non-payment of a fine do not, on their own, necessarily amount to gross disproportionality.

[104] An examination of the effects of the provisions on offenders described in the reasonable hypotheticals must proceed on the basis that the relevant Criminal Code provisions will operate according to their terms and that those responsible for the administration of the provisions will act within the law. Reasonable hypotheticals cannot extend to offenders who are the subject of the misapplication of the relevant provisions, or improper conduct by those responsible for administering the relevant provisions.

[105] I also do not think that enforcement strategies undertaken by federal or provincial governments, which do not find their authority in the challenged provisions of the Criminal Code, can be relied on to demonstrate the unconstitutionality of those provisions. In any event, there is nothing in this record about any enforcement measures taken in respect of outstanding fine in lieu of forfeiture orders. It is not for the court to speculate on what enforcement measures, if any, could be, or are, taken to collect the fines imposed in lieu of forfeiture.

[106] Finally, the possibility that an offender may be improperly incarcerated because a sentencing judge erroneously concludes the offender could pay the fine, when in fact she could not, can have no impact on the constitutional validity of the fine in lieu of forfeiture provisions. Judicial error cannot be a feature of a reasonable hypothetical relied on to demonstrate the unconstitutionality of a statute.

[107] There are also some differences between the mechanics of the operation of the fine in lieu of forfeiture provisions and the victim surcharge provisions. A sentencing judge who imposes a fine in lieu of forfeiture must fix a time within which the fine must be paid. Unlike the victim surcharge, there is no limit on the time the sentencing judge can give an offender to pay the fine. A victim surcharge must be paid in very short order (30 or 60 days after the surcharge is imposed in Ontario). Although the time to pay the victim surcharge can be extended, the very brief initial time given to pay puts the offender on the verge of breaching the victim surcharge order almost from the moment it is imposed.

[108] The pressure on the offender to pay the victim surcharge is further heightened in cases in which the offender also receives a jail sentence. The time to pay the surcharge runs from the moment it is imposed, even if the offender is sent to jail. In contrast, the time to pay the fine in lieu of forfeiture runs only after any term of imprisonment imposed on the offender is completed: Maxwell, at para. 9.

[109] The distinctions between the victim surcharge and the fine in lieu of forfeiture provisions described above are not major. They do, however, add to the burden and the pressure placed on offenders by the victim surcharge.

[110] The case law demonstrates that sentencing judges imposing fines in lieu of forfeiture are very conscious of the offender’s ability to pay when fixing the time for payment of the fine in lieu of forfeiture. In many cases, sentencing judges have given offenders years to pay the fine, no doubt, in part at least, because the fines are often substantial.

[111] The court may also extend the time given to pay the fine. There are no limits on the length of the extensions, or the number of extensions that can be granted. The offender’s ability to pay is obviously a primary concern on any request to extend the time to pay the fines.

[112] There is no reason to doubt, especially after the strong language in Boudreault, that sentencing judges, faced with offenders like those described in the reasonable hypotheticals, will be cognizant of the offender’s limited financial resources and any other personal circumstances which limit the offender’s ability to pay the fine. Sentencing judges will take those limitations into account when fixing the time within which the fine must be paid and when fixing any terms of payment. I am further satisfied the court will bear those same limitations in mind when considering requests for an extension of time to pay the fine. In considering the effects of the legislation on offenders in reasonably foreseeable circumstances, the court must proceed on the basis that the hypothetical judges in those circumstances will exercise their powers and discretion reasonably.

[113] There will be cases when the offender’s circumstances justify a lengthy period of time to pay the fine. The circumstances may also justify a lengthy extension of time to pay the fine if the offender is unable to pay the fine when it comes due. When considering those requests, courts will appreciate the reality of the offender’s circumstances and seek to ameliorate any stress the threat of imprisonment for non-payment of the fine may cause. In some circumstances, the time initially given to pay the fine, or any extensions given, may result in what amounts to a de facto exemption from payment. Nothing in the fine in lieu of forfeiture provisions prohibits orders of that kind.

[114] I also would not characterize the requirement that an offender who needs more time to pay the fine must apply for an extension of time as an act of public shaming or humiliation. Fines in lieu of forfeiture are court orders. Many court orders are subject to variation. If one party, who is subject to the order, seeks a variation, that party must take steps to bring the request for a variation before the court. If an offender seeks an extension of time to pay a fine in lieu of forfeiture, only the offender, or someone on the offender’s behalf, is in a position to make that request. Revealing details about one’s finances and personal circumstances can be uncomfortable and embarrassing. It goes too far, however, to suggest that an offender, who seeks an extension of a court order, is publicly shamed by the requirement that she ask for one, and provide the information needed to justify the variation.

[115] There is nothing in this record about how requests for extensions of time to pay the fine are actually made. The terms of s. 734.3 suggest a process that is far from a public shaming of the offender. Under that section, an application for an extension of time to pay can be made to the court, or to a person designated by the court. The request may be made “by or on behalf of the offender”. Nothing in this section would suggest that an application for an extension of time to pay, especially if unopposed, requires the attendance of the offender, an application in a public forum, or even an appearance before a judge. The section appears to contemplate “paper” applications for extensions of time.

[116] Finally, the effects of the imposition of a fine in lieu of forfeiture on some offenders must be placed in the context of the purpose of the fine in lieu of forfeiture provisions. They stand in place of a forfeiture order. Forfeiture orders are designed to recoup the proceeds of crime and discourage criminal activity that generates those proceeds. The direct, or indirect, proceeds of crime are subject to forfeiture regardless of the circumstances of the offender or the offence. There is no time limit on a forfeiture order. Compliance with a forfeiture order cannot be excused because of the offender’s impecuniosity or other circumstances.

[117] A fine in lieu of forfeiture equal to the value of the property, which remains in effect until satisfied, is entirely consistent with the objectives and operation of the forfeiture provision. A fine in lieu of forfeiture provision which tied the order to the offender’s ability to pay the fine, would not only minimize the value of the fine in lieu of forfeiture as a means of enforcing a forfeiture order, it would actually encourage offenders to dispose of the proceeds, thereby broadening the scope of the criminal activity.

VII Conclusion

[118] A fine in lieu of forfeiture inevitably has a negative effect on the offender against whom it is imposed. That negative effect is integral to the achievement of the deterrence purpose behind the forfeiture provisions. For some offenders, it will be apparent at the time of sentencing that there is little realistic possibility of any significant recovery of funds to stand in the place of the property that should have been forfeited. The fine in lieu of forfeiture order will remain in place indefinitely, putting psychological and economic pressure on the offender.

[119] However, for the reasons set out above, I am satisfied that the significant negative effects of the fine in lieu of forfeiture provisions on some offenders do not result in grossly disproportionate treatment. The negative impact on some offenders can be mitigated by the reasonable exercise of the various powers available to sentencing judges. Considering the fine in lieu of forfeiture provisions in the context of the entire statutory scheme engaged when a fine in lieu of forfeiture order is made, I cannot describe the treatment of the offenders in the reasonable hypotheticals presented by the trial judge as “abhorrent or intolerable”.

[120] I would allow the appeal. The fine in lieu of forfeiture provisions are not contrary to s. 12 of the Charter.

[121] As this is a sentence appeal, the court does not appear to have jurisdiction to remit the matter to the trial court, but must instead determine the appropriate sentence: Criminal Code, s. 687(1). Counsel will exchange and file submissions addressing the following:

• Does this court have jurisdiction to remit the question of sentence to the trial court?
• If the court addresses the merits of the sentence appeal, should the court impose a fine in lieu of forfeiture and, if so, on what terms and conditions?

[122] Counsel’s submissions should be filed within 30 days of the release of these reasons. The submissions should not exceed 10 pages. If counsel see a need for oral argument, counsel should arrange a case management conference with me.

Released: “February 22, 2023 DD”

“Doherty J.A.”

“I agree. L. Favreau J.A.”

“I agree. Copeland J.A.”