ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HER MAJESTY THE QUEEN
Respondent
– and –
DAVID HAIR, WILLIAM MILLER, MARK LANDON, CHRISTOPHER RUTLEDGE, JIM LUCKI and SHLOMO BUCHLER
Applicants
Michael Bernstein and Henry Poon, for the Crown
Russell Silverstein and Christopher Chu, for David Hair
Paula Rochman, for William Miller
Boris Bytensky, for Mark Landon
Carlos Rippell, for Christopher Rutledge
Paula Rochman, as agent for Peter Zaduk, for Jim Lucki
Paula Rochman, as agent for Michael McLachlan, for Shlomo Buchler
HEARD: October 13, 14, 15, 16 and 20, 2015
REASONS FOR DECISION
(Pre-Trial Constitutional Challenge Application)
M.F. BROWN j.
Background
1On January 19, 2016, I gave brief oral reasons dismissing the Applicants’ application to have certain Criminal Code, R.S.C. 1985, c. C-46 (the “Criminal Code”), and federal regulation, SOR/2010-161 (the “Regulation”), provisions declared constitutionally invalid. I found the impugned provisions of the Criminal Code and Regulation to be constitutionally valid in their entirety and indicated, so as not to delay matters, that I would provide more detailed written reasons shortly thereafter. There are those written reasons.
2As this matter is currently scheduled to be a jury trial, these reasons on the pre-trial application are subject to a temporary publication ban pursuant to s. 648(1) of the Criminal Code until the jury retires to consider its verdict.
Introduction
3Certain Applicants are charged, among other things, with conspiring to commit the indictable offence of bookmaking (Criminal Code, ss. 202 and 465(1)) and with possessing the proceeds of crime derived from the offence of bookmaking. The Applicants are also charged with various criminal organization offences, including the s. 202 offence of bookmaking for the benefit of a criminal organization, contrary to s. 467.12 of the Criminal Code. Certain of the Applicants are also charged with being a member of a criminal organization and knowingly instructing a person to commit the s. 202 offence of bookmaking for the benefit of the criminal organization, contrary to s. 467.13 of the Criminal Code.
4The Applicants seek the following alternative orders:
(1) That s. 202 of the Criminal Code be declared ultra vires the Parliament of Canada on the basis that the criminalization of gambling activities in Canada is no longer supported by Parliament’s constitutional jurisdiction to legislate in the area of criminal law;
(2) In the alternative, that provisions of the Regulation, deeming bookmaking and certain other gaming offences to be “serious offences” for the purposes of the Criminal Code’s “criminal organization” provisions, be found to violate s. 7 of the Canadian Charter of Rights and Freedoms in a manner that cannot be justified under s. 1; and
(3) In the further alternative, that s. 202(1)(e) of the Criminal Code either on its own or when viewed together with s. 204(1)(a)(iii) of the Criminal Code be found to violate ss. 2(b) and (d) of the Charter in a manner that cannot be justified under s. 1.
5There is also an ancillary issue dealing with certain of the Respondent’s filed materials and what weight, if any, can be placed on such materials, that I will address in these reasons shortly.
Preliminary Matters
6In the course of the argument of this application, not all of the parties were present – although all were represented by counsel or agents for their counsel. There were designations filed pursuant to s. 650.01 of the Criminal Code but because it was contemplated that oral evidence of a witness was to be taken during the application, the accused cannot appear by designation in those circumstances: see s. 650.01(3)(a)(i).
7Accordingly, on consent of all the parties, I made an order prior to the commencement of the argument pursuant to s. 650(2)(b) to permit all of the accused on the indictment to be absent during this application. The oral argument for the Applicants on the various issues was divided among counsel for the Applicants, with all counsel for the Applicants adopting the submissions of each other.
8Pursuant to s. 109 of the Courts of Justice Act, R.S.O. 1990, c. C.43, the Attorney General of Canada was properly served with a Notice of a Constitutional Question in these proceedings, but did not participate in the hearing or submissions regarding this application.
Admissibility of Respondent’s Materials
9An issue arose in the proceedings concerning the Respondent’s use of a variety of secondary materials in its factum and authorities to support their position. This included Parliamentary papers and debates, domestic and foreign legislation, Canada Gazette material, websites (some of which contained statistics), and scholarly articles and texts.
Applicants’ Position
10The Applicants object to the Respondent introducing the various pieces of documentary evidence without a witness. The Applicants argue that the materials go to the heart of the matter and are therefore adjudicative facts requiring proof. They were entered without a witness, and therefore they are hearsay. Accordingly, the Applicants ask me to refuse to admit the documents into evidence or to take judicial notice of the contentious issues to which they relate.
Respondent’s Position
11The Respondent argues that all of its documentary materials go to proving legislative or social facts and are therefore admissible. The Respondent asks that I take judicial notice of these social facts and consider them as evidence.
The Law
12The distinction between adjudicative or social facts and legislative facts was discussed by the Supreme Court of Canada (“Supreme Court”) in R. v. Spence, 2005 SCC 71, [2005] 3 S.C.R. 458, at para. 58, as follows:
No doubt there is a useful distinction between “adjudicative facts” (the where, when and why of what the accused is alleged to have done) and “social facts” and “legislative facts” which have relevance to the reasoning process and may involve broad considerations of policy: Paciocco and Stuesser, at p. 286. However, simply categorizing an issue as “social fact” or “legislative fact” does not license the court to put aside the need to examine the trustworthiness of the “facts” sought to be judicially noticed. Nor are counsel encouraged to bootleg “evidence in the guise of authorities”: Public School Boards’ Assn. of Alberta v. Alberta (Attorney General), 1999 640 (SCC), [1999] 3 S.C.R. 845, at para. 3.
13The court described legislative facts in Danson v. Ontario (Attorney General), 1990 93 (SCC), [1990] 2 S.C.R. 1086, at p. 1099, as follows: “Legislative facts are those that establish the purpose and background of legislation, including its social, economic and cultural context. Such facts are of a more general nature”.
14The Supreme Court in R. v. Malmo-Levine, 2003 SCC 74, [2003] 3 S.C.R. 571, summarized the issue of proof of legislative or adjudicative facts, at para. 28:
While the courts apply the requirements of judicial notice less stringently to the admission of legislative fact than to adjudicative fact (Danson v. Ontario (Attorney General), 1990 93 (SCC), [1990] 2 S.C.R. 1086, at p. 1099), courts should nevertheless proceed cautiously to take judicial notice even as “legislative facts” of matters that are reasonably open to dispute, particularly where they relate to an issue that could be dispositive: R. v. Find, [2001] 1 S.C.R. 863, 2001 SCC 32; Public School Boards’ Assn. of Alberta v. Alberta (Attorney General), [2000] 1 S.C.R. 44, 2000 SCC 2.
15The court in Spence noted, at para. 64, “The reality is that in many Charter cases (for example), the adjudicative facts are admitted. It is the legislative facts or social facts that are likely to prove dispositive.” The court reiterated the matter of proving such facts in this way, at paras. 58 & 68:
[S]imply categorizing an issue as “social fact” or “legislative fact” does not license the court to put aside the need to examine the trustworthiness of the “facts” sought to be judicially noticed. Nor are counsel encouraged to bootleg “evidence in the guise of authorities”: Public School Boards’ Assn. of Alberta v. Alberta (Attorney General), 1999 640 (SCC), [1999] 3 S.C.R. 845, at para. 3.
[I]n R. v. Malmo-Levine, [2003] 3 S.C.R. 571, 2003 SCC 74, a majority of our Court expressed a preference for social science evidence to be presented through an expert witness who could be cross-examined as to the value and weight to be given to such studies and reports.
16The issue was most succinctly summarized in R. v. Powley (2001), 2001 24181 (ON CA), 53 O.R. (3d) 35, at para. 62, in this way: “A party cannot escape the obligation to prove controversial facts at trial by filing academic writings as ‘authorities’ on appeal.”
17In USA v. Fraser, 2014 BCSC 1132, 312 C.R.R. (2d) 120, the Applicant tried to introduce a book of documents containing a variety of items including newspaper and journal articles, blog postings, transcripts of congressional hearings and speeches, etc. The court approached the documents via the principled exception to the hearsay rule and asked whether they were necessary and reliable. In that case, the court held them to be unnecessary, and largely unreliable.
Analysis
18Many of the documents presented by the Respondent go to issues in this case such as whether and to what extent gambling causes harm or is viewed with moral repugnance by the general population and/or Parliament. The social or legislative facts contained in the documents are a feature of this challenge, although they are not necessarily dispositive of the issues.
19With the exception of the materials I refer to in the next two paragraphs, I will not take judicial notice or put any evidentiary weight on the literature and statistics submitted by the Respondent. Borrowing the language of Spence, at para. 64, I prefer to keep judicial notice here on a “relatively short leash”. Nor can I consider these materials on some other basis of admissibility as they were neither introduced by the Crown expert, nor put to the defence expert on cross-examination for adoption, nor sought to be introduced by means of the principled exception to the hearsay rule.
20There were, however, some materials that I believe I can rely upon in this case. These include the Hansard record of Parliamentary debates and speeches, and statements in the Canada Gazette regarding the legislation at issue. Defence counsel conceded, and I agree, that these materials could be considered as evidence of Parliament’s intent, but not for the truth of their contents and therefore not as proof of any disputed facts contained therein.
21As well, I am entitled to consider the evidence of the two expert witnesses who testified and to consider any literature or materials that they have adopted in the course of their evidence.
Expert Evidence
(a) Dr. Garry Smith – Applicants’ Expert
22Dr. Smith was qualified as an expert in gambling in Canada, the United Kingdom, Australia and the United States. Dr. Smith is a professor emeritus at the University of Alberta and a member of the Alberta Gambling Research Institute (“AGRI”). He described the AGRI as a “consortium of three Alberta universities”, of which he is the research coordinator at the University of Alberta. He has been involved with the AGRI since its inception 14 years ago.
23Dr. Smith described the evolution of gambling laws and regulations in Canada. He testified that the government began to offer gambling schemes as both a source of revenue for the government and as entertainment for the public. He explained that the primary purpose of the 1985 Criminal Code amendments was to remove the federal government from the regulatory scheme, granting exclusive authority to the provinces. Since then, the provinces pay an unspecified amount (which was approximately $100 million in 1985) to the federal government to purchase this exclusive authority. Dr. Smith testified that he believes the provinces enjoy revenue of over $16 billion per annum, nation-wide.
24Dr. Smith gave an overview of the types of gambling and lottery schemes run by the provincial governments, including VLT and slot machines, lotteries such as 6/49 and scratch-and-wins, horseracing, sports betting, and casinos. He testified that since the early 1990s, gambling-related revenues have greatly increased even as player participation has dropped by about 10%. The number of casinos in the provinces has generally increased. There are also now more ways to gamble, including new kinds of electronic gambling machines and internet gambling.
25Dr. Smith explained that in the last four or five years or more, most forms of gambling, such as lotteries, bingo, and horseracing, have stabilized or else have dropped off. He described this change as the result of the “cannibalization” of some formats over others, and competition from across the American border. For instance, electronic gambling machines have expanded and revenue has continued to grow.
26Insofar as harm that is associated with gambling, Dr. Smith acknowledged that little has changed since 2005 (the date of publication of his article entitled “The Legalization of Gambling in Canada”). He described in the paper – and adopted orally – several different types of harm, including direct harm (such as excessive gambling or gambling addiction) and ancillary harms. Such ancillary harms (described in the paper, at p. 39, as “Unwanted Behaviours”) include “illegal gambling” (activity that breaches the Criminal Code), “crimes committed to finance gambling activities” (such as forgery and fraud), “crimes associated with legal gambling expansion” (such as robberies), “crimes that are spatially or situationally co-incidental or co-symptomatic with gambling expansion or particular gambling venues” (such as loan sharking or drug trafficking), and others. Dr. Smith noted that the harms related to addictive gambling seem to have increased upon the introduction of the electronic gambling machines within the regulated sphere. Such machines have been a major boon for the provinces, with Alberta, at the top end, collecting approximately 84% of its gambling-related revenue from such machines.
27Dr. Smith testified that the provinces are not adequately dealing with these harms and in fact advertise and promote gambling and benefit from the revenues. This leads to what he described as a terrible conflict of interest. He conceded that gambling is a complex matter of social policy, with a tension between the social benefits (such as government revenue and public entertainment) and the harms or social cost associated with gambling. He agreed that the refusal of the provinces to extend credit to gamblers (other than to some extent in casinos) may be a means of mitigating gambling-related harm, but said it is more likely a matter of economics and optics.
28Dr. Smith confirmed that he was not suggesting or advocating for the removal of gambling provisions from the Criminal Code (except perhaps with relation to single-sports betting). He confirmed that his preferred approach to the problems relating to gambling would be for the provinces to “fix” their regulatory schemes in a way that reduces the conflict. He confirmed that he is in favour of the federal government’s involvement in prohibiting crimes associated with gambling, and in fact expressed his wish that the federal government would involve itself more in how the provinces operate and in ensuring they comply with the framework in the Criminal Code.
29With respect to organized crime, Dr. Smith testified that there has traditionally been a link between gambling and some types of organized crime, namely “ethnic” groups such as the mafia, Asian organized crime, and the Russian mafia. He agreed that it could also be a “neighbourhood group of thugs”. On cross-examination, he conceded that gambling represents an incentive for organized crime to be involved and that gambling revenues can support other criminal organization-related conduct.
(b) Mr. William Sword – Respondent’s Expert
30Mr. Sword was qualified as an expert in the area of enforcement practices and experience related to gambling. Mr. Sword is a retired officer of the Ontario Provincial Police (“OPP”). He was employed with the OPP for just under 30 years. From 1997 onward, he was predominantly assigned as a member of the Organized Crime Section – Illegal Gambling Unit, where he was a team leader. As a lead investigator, case manager, and undercover officer, as well as in his role as an instructor for the annual Advanced Illegal Gambling Investigative Techniques course at the OPP Academy, Mr. Sword amassed an expertise in enforcement practices and experience related to gambling.
31Mr. Sword testified that he personally has observed crimes such as extortions and assaults in the context of debt collections in regard to gambling. He stated that there is a direct link between extortion and gambling where debt collection is concerned. He said he is aware of shootings that have taken place or homicides that were related to gambling, sometimes in connection to debt collection.
32Mr. Sword testified that both traditional organized crime, as well as ordinary criminals involved in smaller operations, are connected with illegal gambling.
I. The Ultra Vires Argument
The Legislative Scheme
33The “gaming and betting provisions” are set out in ss. 201 - 209 of the Criminal Code. These provisions establish a system of criminal sanctions for gambling related activities (such as keeping a gaming or betting house, pool-selling, and book-making) coupled with regulatory exemptions. The exemptions relate to situations of private betting between individuals without a profit motive, as well as more far-reaching exemptions for provincial lottery schemes.
Applicants’ Position
34The Applicants contend that Parliament has clearly changed its view of gambling and in doing so has eliminated the constitutional foundation for the Criminal Code scheme. That is, the pith and substance of the provisions no longer pertain to a valid criminal law purpose. The Applicants argue that the gaming provisions have been traditionally understood as promoting “morality” by prohibiting an activity seen as immoral. However, the “new reality” of the provinces’ extensive permission and promotion of a wide variety of gambling activities – all with the express permission of Parliament – belies the argument that Parliament is still motivated by suppressing gambling as a social evil. Parliament’s purpose now, argue the Applicants, is to protect the provincial monopoly over the commercial gaming industry, which is not a valid criminal law purpose. The Applicants submit that, if anything, the regulatory scheme actually increases harm to the public. As such, they submit, the entire system cannot properly be put forward as protecting Canadians from harm.
35The Applicants further submit that although this argument has been rejected in the jurisprudence, it is time to revisit the matter due to subsequent legal developments and significant changes in the underlying social facts. In the face of such developments, the Applicants argue that it would be a legal fiction to continue to assert that commercial gaming is still morally offensive. The Applicants argue that Supreme Court case law suggests that where the criminal law purpose pertains to morality, that concept of morality must be consonant with public opinion. In today’s day and age, public opinion does not view gambling as morally offensive. The order the Applicants seek is a declaration that s. 202 of the Criminal Code be declared ultra vires of the Parliament of Canada.
Respondent’s Position
36The Respondent submits that the purpose of s. 202 of the Criminal Code is gleaned from the intention of Parliament at the time the provision was enacted and this purpose was and remains clearly the prevention of harm associated with gambling. The existence of the regulatory scheme does not detract from the validity of the criminal law power; rather, the jurisprudence has recognized gambling as an area of concurrent jurisdiction. The Criminal Code provisions are directed only at harmful forms of gambling, and criminalize conduct associated with the operation of a gambling enterprise. The Respondent argues that both the scope of the gaming provisions and exceptions and the legislative history of the provisions support an interpretation of the provisions that is to prohibit gambling unless it takes a form that mitigates the potential for harm. Furthermore, the Supreme Court has upheld other such regulatory regimes under the criminal law power.
37The Respondent submits that the jurisprudence on this point is clear and decisive. The alleged changes in social facts and public morality cannot form the foundation for overturning these established authorities because any changes that occurred were happening or had already happened at the time the authorities were decided.
The Law
38The test for determining whether a law is validly enacted under the criminal law power was reiterated in Reference Re Firearms Act (Canada), 2000 SCC 31, [2001] 1 S.C.R. 783. One must first ascertain the pith and substance of the law through a consideration of the law’s purpose and effects. The next step is to consider whether the law falls under the criminal law power based on whether or not it has: (a) a valid criminal law purpose and (b) the appropriate form of a prohibition backed by a penalty.
39Where an appellate court of binding jurisdiction has made a conclusion on the same matter, a lower court is generally bound by that decision on the principle of stare decisis. That being said, there our circumstances where a court may revisit a matter, but they are limited. The Supreme Court in R. v. Bedford, 2013 SCC 72, [2013] 3 S.C.R. 1101, at paras. 42 & 44, described the threshold for revisiting a matter as “not an easy one to reach”, met only where a new legal issue is raised as a consequence of significant developments in the law or if there is a significant change in the circumstances or evidence that fundamentally shifts the parameters of the debate.
40Several cases have dealt with the constitutionality of the gaming provisions and upheld the regime, with its comprehensive exemptions, as a valid exercise of the criminal law power: see R. v. Furtney, 1991 30 (SCC), [1991] 3 S.C.R. 89; R. v. Andriopoulos, 1994 147 (ON CA); R. v. Jourdain (2001), 2001 8603 (ON CA), 150 O.A.C. 314 (C.A.); and Siemens v. Manitoba, 2003 SCC 6, [2003] 1 S.C.R. 6.
41In Furtney, the appellant’s argument was that Parliament had improperly delegated its criminal law power in permitting exemptions from criminality for charitable or religious organizations operating a lottery pursuant to a lottery license. The Supreme Court dismissed the appeal stated, at p. 101, “All parties agree that the prohibition of gaming is an exercise of the criminal law power.”
42In Andriopoulous, the appellant argued that “changes in social attitudes indicate that gambling is no longer considered harmful to the public”, such that the prohibition of gambling activities could no longer be upheld as a valid exercise of the criminal law power. The Court of Appeal for Ontario concluded, at para. 4, “[T]here is no evidence that public perceptions of commercial gaming have changed or that it is any less criminal in nature than it ever has been.” The court added, at para. 5, “The clear intent is not to condone gaming but to decriminalize it in circumstances where regulations will minimize the potential for public harm.”
43In Jourdain, the respondent was acquitted of keeping a common gaming house by a trial judge who held that the Respondent had merely breached the provincial regulatory scheme for gambling, not the criminal prohibition found in s. 201(1) of the Criminal Code. The Court of Appeal for Ontario, at para. 14, confirmed that this was an error of law, referring to Furtney and Andriopoulos to conclude that it was within Parliament’s jurisdiction to criminalize the activity in question.
44In Siemens, the matter was whether provincial legislation encroached on the federal criminal law jurisdiction in relation to gaming. In upholding the provincial legislation, the Supreme Court confirmed, at para. 35: “Parliament has intentionally designed a structure for gaming offences that affirms the double aspect of gaming and promotes federal-provincial cooperation in this area.”
Analysis
45Furtney, Andriopoulos, Jourdain, and Siemens concluded that the gaming provisions are a valid exercise of the federal criminal law power. The Applicants’ challenge the premise behind the conclusions in those cases. They assert that by carefully going through the division of powers analysis, it can be shown that the gaming scheme is not in fact valid criminal law. Accordingly, they argue that I am not bound by the appellate authority.
46The Applicants submit that so much has changed since the most recent decision in 2003 – both the public perception of gambling and Parliament’s intentions in maintaining the criminal and regulatory framework – that the matter deserves re-examination per the guidelines in Bedford.
47In addition to Andriopoulos, a very similar argument was put before the Newfoundland Court of Appeal in R. v. J.B.L. Amusements Ltd. (1998), 1998 18037 (NL CA), 123 C.C.C. (3d) 419 (Nfld. C.A.), at para. 8. The court dealt with the matter expeditiously, concluding, at para. 9, that Parliament “continues to properly regulate the matter of gambling which is still regarded as a potentially socially destructive activity.” The court noted that the existence of the regulatory scheme does not remove the gaming provisions from the federal criminal law sphere, appropriately citing RJR-Macdonald Inc. v. Canada, 1995 64 (SCC), [1995] 3 S.C.R. 199. I agree.
48In my view no new legal issue has been raised as a consequence of significant developments in the law nor has there been a significant change in the circumstances or evidence that fundamentally shifts the parameters of the debate to permit me to come to a different conclusion than the binding precedents from the Supreme Court of Canada and the Court of Appeal for Ontario. On the evidence before me, I cannot conclude a shift has occurred in the legal or evidentiary foundation in the last 12 or so years to warrant revisiting the issue of whether the gaming and betting provisions of the Criminal Code are a valid exercise of the criminal law power. The Applicants’ own witness, Dr. Smith, admitted that gambling practices and attitudes have changed little since 2005. The gambling scheme has been upheld numerous times by numerous courts, and I see no basis to depart from that jurisprudence.
49Accordingly, the division of powers argument must fail. The gaming provisions, including s. 202 of the Criminal Code, are a valid exercise of the federal criminal law power.
II. The Regulation and Section 7 of the Charter
The Legislative Scheme
50“Criminal organization” and “serious offence” are defined in s. 467.1 of the Criminal Code as follows:
“criminal organization” means a group, however organized, that
(a) is composed of three or more persons in or outside Canada; and
(b) has as one of its main purposes or main activities the facilitation or commission of one or more serious offences that, if committed, would likely result in the direct or indirect receipt of a material benefit, including a financial benefit, by the group or by any of the persons who constitute the group.
It does not include a group of persons that forms randomly for the immediate commission of a single offence.
“serious offence” means an indictable offence under this or any other Act of Parliament for which the maximum punishment is imprisonment for five years or more, or another offence that is prescribed by regulation.
51The definition of “criminal organization” applies to several offences, including s. 467.11 (“participating in activities of criminal organization”), s. 467.12 (“commission of offence for criminal organization”), and s. 467.13 (“instructing commission of offence for criminal organization”).
52Section 1 of the Regulation brings several of the gambling offences under the umbrella of a “serious offence” as follows:
The following offences under the Criminal Code are serious offences that are included in the definition “serious offence” in subsection 467.1(1) of that Act:
(a) keeping a common gaming or betting house (subsection 201(1) and paragraph 201(2)(b));
(b) betting, pool-selling and book-making (section 202);
(c) committing offences in relation to lotteries and games of chance (section 206);
(d) cheating while playing a game or in holding the stakes for a game or in betting (section 209);
53Accordingly, where individuals are charged under some of the gaming provisions, they may also be liable under the criminal organization provisions. This exposes the individual to more severe consequences, including mandated consecutive sentences (s. 467.14) and higher maximum terms of imprisonment (i.e. a maximum of five years for s. 467.11, a maximum of 14 years for s. 467.12, and a maximum of life imprisonment for s. 467.13.)
54Section 204 of the Criminal Code establishes specific exemptions to liability under ss. 201 and 202. Two of the exceptions are relevant for the purposes of this analysis:
Sections 201 and 202 do not apply to
(a) any person or association by reason of his or their becoming the custodian or depository of any money, property or valuable thing staked, to be paid to
(i) the winner of a lawful race, sport, game or exercise,
(ii) the owner of a horse engaged in a lawful race, or
(iii) the winner of any bets between not more than ten individuals;
(b) a private bet between individuals not engaged in any way in the business of betting;
55Section 7 of the Charter provides:
Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.
56A person who alleges a breach of s. 7 must prove that there has been or could be a deprivation of the right to life, liberty and security of the person, and that the deprivation was not or would not be in accordance with the principles of fundamental justice. If a claimant is successful in doing so, the burden shifts to the government to justify the deprivation under s. 1, which provides that the rights guaranteed by the Charter are subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society: see Charkaoui v. Canada (Citizenship and Immigration), 2007 SCC 9, [2007] 1 S.C.R. 350, at para. 12.
Applicants’ Position
57The Applicants submit that their s. 7 Charter argument can best be understood as based primarily on the principles of overbreadth and gross disproportionality. The law created by the combined effect of ss. 202 and 467.1 of the Criminal Code and the Regulation is overbroad because it sweeps into the Criminal Code’s “criminal organization” provisions a wide range of persons whom Parliament cannot reasonably be taken to have intended be targeted or captured by them. These persons include both people who would previously have been considered only minor offenders and people whose conduct would not previously have been seen as criminal at all.
58The Applicants argue also that the same people in relation to whom the law is overbroad would also suffer grossly disproportionate effects if the criminal organization provisions were brought to bear on them. The Applicants submit that supplementing a gaming charge prosecution with vastly more serious criminal organization offence charges dramatically raises the stakes for the accused and compromises his or her interests, starting with the reversal of the onus at the bail hearing and continuing on to sentencing following a conviction. The Applicants submit that a small-time bookie who would previously have faced a maximum jail sentence of two years imprisonment can now have a further fourteen years – consecutive – added on for committing the offence of bookmaking “in association with” the criminal organization he and his clientele are now deemed to comprise. His or her clients – whose conduct was previously deemed not criminal at all – now face the prospect of an indictable charge and up to five years imprisonment under s. 467.11, as does the man or woman who gets together with friends to draft a sports pool or play cards, whose previous legal exposure, at worst, was a summary prosecution as a “found-in” in a common betting or gaming house.
59The Applicants submit that it would be grossly disproportionate to subject people who were previously only minor offenders or non-offenders to the impact of a conviction and sentence for a criminal organization offence. Consequences include, for example, higher jail sentences, immigration consequences, and the stigma of a criminal organization offence on one’s record if trying to travel.
60The Applicants contend that the intended purpose of the criminal organization provisions was to capture the “hard core” of organized crime, those who dedicated their lives to the commission of serious crime and who pose a serious threat to society. They argue that the Regulation is overbroad because it captures conduct that bears no relation to “hard core” organized crime. The Applicants admit that in some cases the individuals captured might be considered “petty criminals”, but argue that this is not who the criminal organization provisions meant to target. By casting the net so broadly, the Regulation significantly overshoots the legislative objective.
61In support of their position, the Applicants presented several hypothetical scenarios (some in their factum and some in oral argument). The hypotheticals can be summarized as follows:
“The bookmaker”: A bookmaker and his or her regular clients would meet all the criteria necessary to constitute a criminal organization, as the group would involve three or more persons whose main activity would be the facilitation of book-making (which would now be deemed to be a “serious offence”). The regular group could not be said to have “formed randomly for the immediate commission of a single offence”, and the bookie and at least some of the clients will anticipate obtaining a “financial benefit” from the commission of the book-making offence.
“The hockey pool”: In this situation, a person invites a dozen friends over for a yearly hockey pool draft. This person collects an annual “franchise fee” that is to be pooled and paid out to the top finishers. The Applicants argue that this person has committed the offences of “keeping a common betting house” and “pool-selling”. Because of the Regulation, the hockey pool would be deemed to be a criminal organization.
“The weekly poker game”: In this scenario, a group of friends meets every week to play poker at one of their homes. They arrange it so that every player chips in for the cost of beer, which is then purchased by the host. The Applicants argue that the host could be charged with “keeping a common gaming house” and that the entire group could be classified as a criminal organization. The host could be prosecuted under s. 467.12 (“commission”) and the players could be prosecuted under s. 467.11 (“participation”).
“The convenience store clerks”: The Applicant raised this hypothetical in oral argument. The example is, generally, that where proprietors of a gambling operation are charged with keeping a common gaming house (s. 201(1)), the players could be charged with being found in a common gaming house (s. 202(2)(a)). Before the Regulation came into force, this was the worst that would happen to the players. Now, the Applicants argue, the Regulation exposes the players to liability under the criminal organization offences where the proprietors are found to constitute a criminal organization. As an illustration, the Applicants suggest an example of three convenience store clerks who conspire to operate a regular gambling operation/betting house (meeting the requirements of a “criminal organization”). Customers who come in and bet would be liable under the s. 467.11 participation offence because of their “frequent association” with the criminal organization (see 467.11(3)(b)).
62The Applicants also raised three further hypotheticals based on three cases where, they submit, with a minor adjustment to the facts, the bettors would be exposed to liability under the criminal organization offences: R. v. Gardner, 2004 ONCJ 69; R. v. Di Pietro, 1986 53 (SCC), [1986] 1 S.C.R. 250; and R. v. Ede (1993), 1993 14672 (ON CA), 84 C.C.C. (3d) 447 (Ont. C.A.).
63The Applicants argue that all of the hypotheticals mentioned above show how the Regulation may unintentionally capture conduct that bears no relation to the purpose of the provisions.
64The Applicants point out that although police and prosecutors may be unlikely to use the heavy legal machinery of criminal organization charges against such small-time operations, such discretion is no defence to an overbreadth challenge. Relying on R. v. Nur, 2015 SCC 15, [2015] 1 S.C.R. 773, at para. 81, the Applicants submit that the test is not whether prosecutions are common but whether the provision would reasonably be expected to capture the conduct.
65Should I find there is an infringement of s. 7, the Applicants ask me to find the infringement is not justified under s. 1 of the Charter. They argue that the Supreme Court has held that an unconstitutionally overbroad law will generally be incapable of passing the minimal impairment branch of s. 1. The recent case of R. v. Michaud, 2015 ONCA 585, seeming to challenge this understanding, applies only to regulatory offences and has no bearing on this matter. Even if s. 1 comes into play, the onus is on the Crown to prove each element of the test, and the Applicants argue that the Regulation cannot be viewed as a minimal impairment.
Respondent’s Position
66The Respondent’s position is that, first, the criminal organization provisions recognize that coordinated criminal conduct poses a great risk to the public and their purpose is to target those who play an active role in organized crime.
67Second, the gaming and criminal organization provisions have been drafted and interpreted in a manner that ensures perfect alignment with legislative intent, which precludes any degree of overbreadth.
68Third, the lack of overbreadth negates the Applicants’ gross disproportionality argument and, more importantly, disproportionality is precluded because the organized crime provisions do not impose mandatory minimum sentences.
69The Respondent also argues that Parliament is entitled to deference, especially in relation to organized crime legislation.
70The Respondent submits that the purpose of the legislation is not merely to target the “major players” in organized crime but rather, more broadly, to criminalize active involvement in criminal organizations. The Respondent argues that Parliament intended the provisions to respond to coordinated criminality more comprehensively, targeting anyone who perpetrates or enhances organized crimes. This is confirmed by the jurisprudence, by the legislative evolution of the criminal organization sections, and by Parliament’s obligations under and compliance with international law. The Respondent argues that the Regulation is consistent with the purpose of the organized crime provisions. The Regulation creates a powerful disincentive against involvement in criminal gambling operations, and does not go beyond what is necessary to achieve Parliament’s objectives. Therefore, it is not overbroad.
71The Respondent also argues that the Applicants are interpreting the criminal organization sections in a broad manner when in fact the provisions require the narrower “active and functional connection” to the illicit activities of organized crime groups. This expansive interpretation plays a major role in the Applicants’ hypotheticals. While the Applicants contend that a lack of charges and/or prosecutions is a matter of discretion and cannot serve to save the Regulation, the Respondent argues that, in fact, the hypotheticals are not illegal situations and are never charged because they cannot be charged. The Respondent submits that a proper interpretation of these provisions is one which excludes individuals who are only peripherally connected to criminal organizations while capturing those who knowingly enable or perpetrate acts of coordinated criminality.
72The Respondent’s position regarding the Applicants’ hypotheticals is as follows:
“The bookmaker”: The bookmaker would be subject to the s. 202(1)(e) prohibition against book-making. The bettors would not be criminalized. Importantly, no criminal organization would materialize in this scenario. There is no interdependence, systematic coordination, or organizational structure. Peripheral contact with a criminal organization does not make one a member of that organization.
“The hockey pool”: The hypothetical host could not be charged because the annual use of the space would fail to satisfy the definition of “common betting house”, and because the conduct does not have a profit motive, precluding the operation of both the book-making and pool-selling offences (per both case law and s. 204(1)(b)).
“The weekly poker game”: The absence of a profit motive – a necessary component to the definition of “common gaming house” in s. 197(1) – renders liability for operating a common gaming house legally impossible. Further, the hypothetical would engage the s. 204(1)(b) exemption and preclude liability.
“The convenience store clerks”: The Respondent argues that the bettors lack the mental element required by s. 467.11. Merely placing a bet, while unaware that the proprietors are a criminal organization, is not enough to constitute participating in or contributing to the activity of a criminal organization. The purpose of the bettors is not to enhance the ability of the bookmakers to carry on their illegal conduct; if anything, their interests are adverse to that of the bookmaker.
73With respect to the three hypotheticals the Applicants raised regarding the cases of Gardner, Di Pietro, and Ede, the Respondent submits that such conduct would not be captured by the criminal organization provisions. The individuals in these hypotheticals would not be exposed as a participant under s. 467.11 of the Criminal Code for merely coming into contact with a criminal organization. A participant under the criminal organization provisions (s. 467.11) must know not only that they are dealing with a criminal organization but that their participation in the gambling operation would enhance the ability of the criminal organization to commit an indictable offence. The threshold for the commission of an indictable offence for a criminal organization (s. 467.12) is even higher.
74Finally, the Respondent argues that the Regulation does not produce grossly disproportionate results, first due to a lack of overbreadth, and second due to the fact that there are no mandatory minimums attached to the organized crime provisions.
75Should I find an infringement of s. 7, the Respondent submits that I should find the infringement to be justified under s. 1. The Respondent argues that the questions posed by s. 7 and s. 1 are different, and that a law that infringes s. 7 could still be justified under s. 1. The Respondent argues that the Regulation: (a) responds to a sufficiently important objective of deterring the amplified harm of gambling in the context of organized crime; (b) is rationally connected to this objective; (c) minimally impairs individual interests (for the same reasons that it is not overbroad), by a means that falls within a range of reasonable solutions and warrants deference; and (d) is proportionate and balanced. Fundamentally, the individual interests at issue do not outweigh the state’s objective. Individuals who wish to participate in betting and wagering, or even offer such services, are free to do so within the confines of federal and provincial law. At their core, these measures only restrict individuals where their conduct is harmful to others and to society.
The Law
(a) Overbreadth & Gross Disproportionality
76Among other things, the principles of fundamental justice referenced in s. 7 of the Charter guard against overbreadth and gross proportionality. Both were recently and clearly explained by Supreme Court of Canada in Bedford. The court defined overbreadth, at para. 101, as, “[T]he law goes too far and interferes with some conduct that bears no connection to its objective.” At para. 108, the court added that the “evil” is the “absence of a connection.” The law need only capture some conduct that bears no relation to its purpose (at para. 112).
77Gross disproportionality was defined, at para. 120, as a situation where the law’s effects are so grossly disproportionate to its purposes, so totally “out of sync with the objective”, that they cannot be rationally supported. The evil is where “the law’s impact on the s. 7 interest is connected to the purpose, but the impact is so severe that it violates our fundamental norms” (at para. 109).
(b) Interpretation and Purpose of the Criminal Organization Provisions
78The Court of Appeal for Ontario upheld the definition of “criminal organization” in R. v. Lindsay, 2009 ONCA 532, 97 O.R. (3d) 567. The appellants challenged the terminology of “facilitation” and “association” in the definition, claiming they rendered the definition both vague and overbroad. In upholding the definition, the court noted, at para. 23, that both terms are “common and well-understood, both in ordinary parlance and in a legal context.” The court cited with approval, at para. 23, the description of the terms by the trial judge. Generally, “facilitation” is to “make easy or easier”, and “in association with” is defined as to “allow oneself to be connected with or seen to be supportive of”; the accused must “commit a criminal offence in connection with the criminal organization.”
79In R. v. Venneri, 2012 SCC 33, [2012] 2 S.C.R. 211, the Supreme Court considered the definition of “criminal organization” and the commission offence in s. 467.12. The court discussed the term “organized” in the definition as follows, at para. 29: “[B]y insisting that criminal groups be ‘organized’, Parliament has made plain that some form of structure and degree of continuity are required to engage the organized crime provisions”. The court noted, at para. 35, that criminal organizations require continuity and structure and that this “structured nature…. sets them apart from criminal conspiracies”.
80With regards to s. 467.12, the court in Venneri instructed an interpretation of “in association with” that accords with its plain meaning and statutory context. Offences captured by this language are those which “advance, at least to some degree, the interests of a criminal organization – even if they are neither directed by the organization nor committed primarily for its benefit” (at para. 54). The court cited scholar Miles Hastie for the additional note that “offences committed for wholly selfish purpose should not generate liability” (emphasis in original).
81Finally, to satisfy the mens rea requirement of s. 467.12, the court held, at para. 57, that the Crown must prove that the accused knowingly dealt with a criminal organization.
82Venneri was recently discussed in R. v. Beauchamp, 2015 ONCA 260. The court held, at para. 152, that determining whether a group is a “criminal organization” involves striking a balance between “flexibility” and “overreaching”. One must not make the decision based on “pre-conceived notions about what organized crime may look like” but “care must also be taken not to overextend the reach of the provisions and turn every conspiracy of three or more persons involving the commission of serious crimes for material benefit into a criminal organization.”
83Section 467.11 was held to be constitutionally sound (i.e. not overbroad) in the case of R. v. Beauchamp (2009), 2009 37720 (ON SC), 68 C.R. (6th) 293. The court identified the mens rea of the s. 467.11 participation offence as follows, at para. 49: the Crown is required to prove beyond a reasonable doubt “(a) that the accused had subjective knowledge of the nature of the criminal organization and was not merely reckless; and (b) that the accused had subjective knowledge of how his or her participation or contribution would enhance the ability of the criminal organization to commit or facilitate an offence.”
84In addressing the hypotheticals proffered by the defence, the court noted, at para. 60, that the appropriate approach is to give the provision a “purposive judicial interpretation consistent with the intention and objectives of Parliament and one which avoids de minimis absurd results”. The two hypotheticals were as follows:
A customer, who knows, is reckless, or is willfully blind to the nature of the Hells Angels as a criminal organization, enters a shop run by the Hells Angels and purchases a t-shirt. In this way, he knows or ought to know that the purchase of the t-shirt contributes to the activity of the criminal organization, and is therefore caught by s. 467.11. The Crown argued that mere recklessness is not a sufficient mental element and that the purchaser would have to subjectively know that the purchase “will enhance the ability of the criminal organization to commit or facilitate an indictable offence”.
In a similar situation to above, a customer purchases a beer at a bar run by the Hells Angels. The Crown’s arguments were essentially as in the first example.
85The court agreed with the Crown and concluded, at para. 58, that neither hypothetical would be caught by the provisions of s. 467.11 without evidence that the customer subjectively knew the purchase would enhance the ability of the criminal organization to commit an indictable offence. The court added, “The customer’s intention in the above examples would in all likelihood be found to have been to simply purchase a t-shirt or a beer for their own reasons”.
86In R. v. Terezakis, 2007 BCCA 384, 223 C.C.C. (3d) 344, the court upheld s. 467.13 as neither vague nor overbroad. The court also addressed the definitional requirement of a criminal organization as being “however organized” by noting, at para. 33, “It does not include persons who are not functionally connected to that criminal purpose or activity, irrespective of their links to organizations with legitimate purposes and activities that include persons in the criminal group.” One example of involvement in a criminal organization that was dismissed by the court was that of a customer of a marijuana café – “the customer may be aware of the criminal purpose or activity of the group but they are not part of it.”
87I agree with the reasoning in the above noted cases and accept that these cases set out the proper statutory interpretation of the criminal organization provisions of the Criminal Code to which they relate.
(c) Reasonable Hypotheticals
88The use of “reasonable hypotheticals” in this case is supported by the jurisprudence. In the recent decision of Nur, in which the challenge was under s. 12 of the Charter, the court confirmed that the well-established principles of constitutional interpretation and review allow for an examination of reasonably foreseeable circumstances. The impugned provision need not contravene the rights of the actual claimant. The court reiterated, at para. 51, that, “No one should be subjected to an unconstitutional law.”
89The court clarified the use of such hypotheticals as follows, at para. 61:
Determining the reasonable reach of a law is essentially a question of statutory interpretation. At bottom, the court is simply asking: What is the reach of the law? What kind of conduct may the law reasonably be expected to catch? What is the law’s reasonably foreseeable impact?
90The court was careful to note, at para. 75, that “far-fetched or remotely imaginable examples should be excluded from consideration.”
91Reasonable hypotheticals can be used to support arguments of overbreadth under s. 7 of the Charter: see R. v. Heywood, 1994 34 (SCC), [1994] 3 S.C.R. 761, at p. 799.
Analysis
(a) The Regulation and Section 7 of the Charter
92As discussed, s. 7 of the Charter protects an individual’s “right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.” Clearly, the right to liberty is engaged in this case due to the possibility of imprisonment. The next question in the s. 7 analysis is whether the limitation or deprivation imposed by the law on the liberty of the person is contrary to the principles of fundamental justice. The Applicants say that the impugned provisions of the Regulation deprive or limit an individual of the right to liberty in a manner that violates the principles of fundamental justice.
93Specifically, the Applicants argue that certain provisions of the Regulation, which link the gaming and criminal organization provisions, violate the principles of fundamental justice through overbreadth and gross disproportionality. I do not agree. I do not accept the main thrust of the Applicants’ submissions on this point that Parliament only intended to target major players in traditional criminal organizations and that the impugned Regulation provisions cast an extremely wide net and overshoot this legislative objective. I agree with the Respondent’s position that the Applicants’ overbreadth argument ascribes an inappropriately narrow purpose to the relevant provisions and has interpreted them in a manner that is inconsistent with Parliament’s actual intent, the wording of the provisions and binding case law. In my view, the impugned provisions of the Regulation do not go too far and do not interfere with some conduct that has no connection to their objective: see Bedford, at para. 101.
94While s. 7 of the Charter is engaged due to the possibility of imprisonment, the burden is on the Applicants to demonstrate that the impugned provisions of the Regulation fail to comply with the principles of fundamental justice. When scrutinizing legislation under the principles of fundamental justice, Parliament is afforded a measure of deference. Legislators must not be unduly restricted with respect to the difficult policy decisions they often have to make: see Heywood, at para. 51. Parliament’s intention in passing the Regulation was reflected in the Regulatory Impact Analysis Statement made in the Canada Gazette accompanying the Regulation when the impugned Regulation was passed ((2010) C Gaz II, 1432). Parliament recognized that organized crime is engaged in a variety of criminal acts including gambling offences. The concern of Parliament in passing this Regulation was not just gambling per se. it was organized crime being involved in gambling offences. Even the Applicants’ own expert, Dr. Smith, acknowledged that there is a link between gambling and some types of organized crime and that gambling represents a huge incentive for organized crime to be involved. In addition, Dr. Smith testified that gambling revenues can in some way or another support criminal conduct associated with different forms of organized crime.
95I agree with the position of the Respondent that in all of the hypotheticals offered by the Applicants, there is at least one, if not more, missing elements that would be required to sustain a charge relating to the gaming offences and/or criminal organization offences.
96The participation offence provision (s. 467.11) only captures those persons who knowingly and purposefully assist criminal organizations. The participation provision makes any act or omission an offence, regardless of whether the conduct is otherwise criminal, if the purpose was to enhance the ability of a criminal organization to facilitate or commit an indictable offence.
97The commission offence provision (s. 467.12) makes it an offence to commit an indictable offence for the benefit of, at the direction of, or in association with a criminal organization. Like the participation offence, the mental element means that the provision only applies to those who knowingly and purposefully take an active part in organized crime. The accused must not only have the requisite intention to commit the underlying indictable offence, but also must have knowledge of the criminal organization and must have committed the offence for the benefit of, at the direction of, or in association with that group.
98In the hypotheticals involving a regular bettor, someone found in a betting house, or someone providing information to a betting house, those individuals would not be exposed to liability as a “participant” under s. 467.11 unless they knew not only that they were dealing with a criminal organization but that their participation in the gambling operation would enhance the ability of the criminal organization to commit an indictable offence: see Beauchamp, at para. 49.
99Like the hypothetical examples in Beauchamp and Terezakis, I cannot see how the relatively innocent conduct of an individual peripherally coming into contact with a criminal organization can render that individual subject to any criminal organization charges. To be found “in association” with the criminal organization under s. 467.12, an even more exacting standard would be applied. Not only would an accused have to commit an indictable offence – of which betting is not one – the accused would have to be knowingly dealing with a criminal organization and operating “in linkage” or “connected with” that organization: see Venneri, at para. 57; and Lindsay, at para. 23. This is a high threshold, and if an accused meets the test, he/she is properly caught by the criminal provisions.
100In the hypotheticals involving a group effort, such as the weekly poker game or the hockey pool, I agree with the Respondent that the underlying charges – s. 201 or s. 202 relating to keeping a gaming house, book-making, etc. – would not apply, for lack of a profit motive: see R. v. Turmel (1996), 1996 7940 (ON CA), 109 C.C.C. (3d) 162 (Ont. C.A.); R. v. Decome (1991), 1991 3847 (QC CA), 63 C.C.C. (3d) 460 (Que. C.A.); and Criminal Code, s. 204(1)(b). Alternatively, the gaming or betting house offence would not apply unless the venue met the requirements of frequent or habitual use: see Regina v. Rockert et al, 1978 31 (SCC), [1978] 2 S.C.R. 704, p. 711-12; and R. v. Grainger (1978), 1978 2515 (ON CA), 42 C.C.C. (2d) 119 (Ont. C.A.), at p. 120. I also agree with the Respondent that if a profit motive were to evolve, then the interests of the proprietor and the bettors are at odds, and the group is not working in any kind of organized fashion towards any common goal (per the requirement in s. 467.1(1)(b)). While the overarching goal of the bookmakers and bettors could be said to “gamble illegally”, and to that extent the bettors would have an interest in the bookmaker’s business, the bettors are not ultimately concerned with facilitating the bookmaker in their profit-making venture. They simply want to win money.
101As the court put it in Terezakis, at para. 34, “[T]he persons who constitute ‘the group, however organized’ cannot be interpreted so broadly as to ensnare those who do not share its criminal objectives.” The bettors are acting in their own self-interest; they are “independent opportunist[s]”: see Venneri, at para. 46. Therefore, by the definition in the Criminal Code and its subsequent interpretation, they do not form a criminal organization with the bookmakers.
102In all of the examples, if the bettors/betting-house visitors were subjectively aware that they were enhancing the ability of the criminal organization to facilitate or commit an indictable offence, and participated in the activity with this knowledge, then the Regulation rightly captures their conduct. Alternatively, if there were three or more proprietors working together to run a betting house/hockey pool/poker game, and were gathering a profit from this venture, then the Regulation rightly captures their conduct as well.
103I do not agree with the Applicants’ position that Parliament only intended to capture the conduct of “hard core” organized crime. The case law previously described and the documentary evidence provided support the proposition that Parliament considers harmful all manner of criminal organizations, and the purpose of the criminal organization provisions is to capture the criminal conduct of them all. Individuals are not permitted to act criminally in an organized fashion or associate with or facilitate the activities of criminal organizations.
104The regime created by the impugned Regulation does not extend the reach of the criminal organization provisions beyond their legislative objective. The Regulation simply responds to organized criminal gambling and its greater potential for harm. As I mentioned earlier, I recognize that there may be cases where trial courts may reconsider settled rulings of higher courts: see Bedford, at para. 42. However this case is not one of them, as it relates to the provisions of criminal organization and gaming offences. The impugned Regulation does not raise a new legal issue as a consequence of significant developments in the law. Nor has there been a significant change in the circumstances or evidence that fundamentally shifts the parameters of the debate. I agree with the Respondent’s position that the new regime created by the impugned Regulation does not amount to anything more than the sum of its parts. Neither the gaming provisions nor the criminal organization provisions are overbroad and they do not produce this result in combination.
105A law is only overbroad if it goes beyond what is necessary to achieve its objectives. In Bedford, the court held that overbreadth deals with a law that is so broad that it includes some conduct that bears no relation to its purpose: see Bedford, at para. 110. That is not the situation in this case. The impugned Regulation does not expose an unconstitutionally wide range of people to criminal liability under the criminal organization offences. Courts have repeatedly held that these offences require an active and functional connection to the illicit activities of criminal organizations. I agree with the Respondent’s position that a proper interpretation of the provisions is one which excludes individuals who are only peripherally connected to criminal organizations while capturing those who knowingly enable or perpetrate acts of coordinated criminality.
106Nor is the impugned Regulation grossly disproportionate. Gross disproportionality is established where the effects of the law are “totally out of sync” with its legislative objective and are “entirely outside the norms accepted in a free and democratic society”: see Bedford, at para. 120. That is not the situation in this case. I agree with the Respondent that the lack of overbreadth negates the Applicants’ gross disproportionality argument and, more importantly, disproportionality is precluded because the criminal organization provisions do not impose mandatory minimum sentences: see Malmo-Levine, at para. 158.
107In summary, the impugned provisions of the Regulation capture the conduct they were intended by Parliament to capture, and penalizes proportionately those it intends to penalize. Therefore, it is neither overbroad nor grossly disproportionate.
108Accordingly, for the above reasons, the impugned Regulation, which deems certain gaming offences under s. 202 of the Criminal Code to be “serious offences” for the purposes of the Criminal Code’s criminal organization provisions, complies with the principles of fundamental justice. In these circumstances, there is no breach of s. 7 of the Charter.
III. Section 2 of the Charter
109Sections 2(b) and (d) of the Charter state as follows:
Everyone has the following fundamental freedoms:
(b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;
(d) freedom of association.
Section 202(1)(e) of the Criminal Code
110The Applicants are charged variously with a conspiracy offence and/or criminal organization and proceeds of crime offences in relation to the offence of bookmaking under s. 202(1)(e) of the Criminal Code which reads as follows:
Every one commits an offence who…. (e) engages in book-making or pool-selling, or in the business or occupation of betting, or makes any agreement for the purchase or sale of betting or gaming privileges, or for the purchase or sale of information that is intended to assist in book-making, pool-selling or betting;
111Section 204(1)(a)(iii) of the Criminal Code reads as follows:
Sections 201 and 202 do not apply to…. (a) any person or association by reason of his or their becoming the custodian or depository of any money, property or valuable thing staked, to be paid to…. (iii) the winner of any bets between not more than ten individuals;
Applicants’ Position
112The Applicants initially argued in their Factum that ss. 201-202, viewed together with the exemptions in ss. 204 and 207, were in their entirety an infringement on s. 2 of the Charter. The Respondent argued that the Applicants only had standing to challenge s.202(1)(e) of the Criminal Code because that was the offence section in relation to which the Applicants were charged and the Applicants were not seeking public interest standing. The Applicants conceded in oral argument in reply that their argument on the s. 2 Charter issue was restricted to s. 202(1)(e) and s. 204 (1)(a)(iii) of the Criminal Code.
113The Applicants submit that ss. 2(b) and (d) of the Charter are engaged by s. 202(1)(e) of the Criminal Code and the exemption in s. 204(1)(a)(iii). They argue that bettors and bookmakers necessarily communicate, and that the gambling, specifically the placing of bets, is in fact a form of expression and self-fulfilment. They submit that gambling is a widely popular part of human culture, and whether or not the type of expression goes to the “core” of the Charter-protected value, it ought not be summarily dismissed. The Applicants reference other types of cases in which the freedom of expression was accepted as being engaged, such as perjury, fraud, deception, advertising, hate speech, and communication for the purposes of prostitution. If each of those, they submit, are protected by s. 2(b), it would be illogical that s. 202(1)(e) is not similarly protected.
114Furthermore, because s. 204(1)(a)(iii) affords an exemption for smaller groups of people and criminalizes larger ones, the Applicants argue that this infringes s. 2(d). The Applicants argue that people gather to gamble, as a form of entertainment and part of Canadian culture, and that this is necessarily an association. Such an association is protected by s. 2(d) where, as in this case, Parliament seeks to criminalize the “associating” itself.
115Should I find there is an infringement of s. 2, the Applicants ask me to find the infringement is not justified under s. 1.
Respondent’s Position
116The Respondent argues that s. 202(1)(e) does not engage the s. 2(b) right as it involves book-making or pool-selling, not the placing of bets, and book-making/pool-selling is not in and of itself “expression”. In the alternative, if s. 202(1)(e) does engage s. 2(b), it is only an ancillary effect. If such an ancillary effect were found, the section would still not infringe upon the freedom of expression because the underlying communication fails to advance the values underpinning the freedom of expression.
117The Respondent further argues that the book-making provision does not relate to the “collective pursuit of common goals”, but rather targets the individual conduct of the bookmaker. The exemption in s. 204(1)(a)(iii) is merely a means of limiting harm and does not mean s. 202(1)(e) prohibits gambling because of its associational nature. The Respondent argues that the freedom of association is inapplicable with regard to a group engaged in conduct that would be criminal on an individual basis unless the purpose of the prohibition is to preclude the activity because of its associational nature.
118Should I find an infringement of s. 2, the Respondent submits that I should find the infringement justified under s. 1. The Respondent argues that any infringement of the freedoms of expression or association is minimally infringed and justified under s. 1.
The Law
(a) Freedom of Expression
119Beginning with R. v. Irwin Toy, 1989 87 (SCC), [1989] 1 S.C.R. 927, the Supreme Court has consistently utilised a two-step approach to determine whether s. 2(b) has been infringed: see for example Société Radio-Canada c. Québec (Procureur général), 2011 SCC 2, [2011] 1 S.C.R. 19, at paras. 33-38; and Whatcott v. Saskatchewan Human Rights Tribunal, 2013 SCC 11, [2013] 1 S.C.R. 467, at para. 62. The test was articulated in R. v. Keegstra, 1990 24 (SCC), [1990] 3 S.C.R. 697, at pp. 728-30, as requiring consideration of the following questions: (1) does the activity of the litigant who alleges an infringement of the freedom of expression fall within the protected s. 2(b) sphere? and (2) is the purpose of the impugned government action to restrict freedom of expression? The court has also clarified that there is an included sub-question: is the expressive activity excluded from s. 2(b) protection because of the method or location of expression?: see Montreal (Ville) v. 2952-1366 Québec Inc., 2005 SCC 62, [2005] 3 S.C.R. 141, at para. 56; and Radio-Canada, at paras. 35 & 38.
120For the first step, the question is whether or not the conduct itself is expression at all. As the court put it in Irwin Toy, at p. 968, “Activity is expressive if it attempts to convey meaning.” The approach to this assessment must be broad and inclusive: see Keegstra, at p. 729; Irwin Toy, at p. 970. However, not every activity will convey meaning; see for example Rosen v. Ontario (1996), 1996 443 (ON CA), 131 D.L.R. (4th) 708, in which it was held that the mere commercial sale of tobacco products does not by itself convey any meaning.
121If the activity is found to constitute “expression”, then one must move to the second question. At this stage, if the purpose of the government action is not to restrict the freedom of expression, but rather the effect of the action does so, then s. 2(b) is “not brought into play unless it can be demonstrated…. that the activity supports rather than undermines the principles and values upon which freedom of expression is based” (Keegstra, at pp. 729-30). According to the court in Irwin Toy, at p. 976, those principles and values include:
(1) seeking and attaining the truth is an inherently good activity;
(2) participation in social and political decision-making is to be fostered and encouraged; and
(3) the diversity in forms of individual self-fulfillment and human flourishing ought to be cultivated in an essentially tolerant, indeed welcoming, environment not only for the sake of those who convey a meaning, but also for the sake of those to whom it is conveyed.
122These principles can be otherwise described as “self-fulfilment, democratic discourse and truth finding” (Radio-Canada, at para. 37).
123In the context of this case, it is important to note the following comment from Lamer J. in Reference re ss. 193 & 195.1(1)(c) of the Criminal Code (Canada), 1990 105 (SCC), [1990] 1 S.C.R. 1123, at p. 1182:
There are forms of expression, however, that can be kept distinct from the content which they seek to convey, and which may be excluded from the scope of s. 2(b) of the Charter. … These forms that have not received protection under s. 2(b) seem to share the feature that they have been criminalized by Parliament. I wish to clearly state that the mere fact that Parliament has decided to criminalize an activity does not render it beyond the scope of s. 2(b) of the Charter.
(b) Freedom of Association
124The Supreme Court has stated that the purpose of s. 2(d) is to allow “the achievement of individual potential through interpersonal relationships and collective action”: see for example Dunmore v. Ontario (Attorney General), 2001 SCC 94, [2001] 3 S.C.R. 1016, at para. 17. Earlier jurisprudence suggested examining the freedom by way of a four-part test, summarized in Professional Institute of the Public Service of Canada v. Northwest Territories (Commissioner), 1990 72 (SCC), [1990] 2 S.C.R. 367, at pp. 401-2:
[F]irst, that s. 2(d) protects the freedom to establish, belong to and maintain an association; second, that s. 2(d) does not protect an activity solely on the ground that the activity is a foundational or essential purpose of an association; third, that s. 2(d) protects the exercise in association of the constitutional rights and freedoms of individuals; and fourth, that s. 2(d) protects the exercise in association of the lawful rights of individuals.
125The court in Dunmore recognized that some associational conduct worthy of protection would not meet this test, particularly the second and third branches. For example, the court noted, at para. 16, there may be situations in which the activity “cannot be understood as the lawful activities of individuals” in that they cannot be performed by individuals acting alone. Such activities may still be worthy of protection under s. 2(d) because they are still “collective in nature”. Consequently, the court advocated for a more purposive approach which asks simply: “has the state precluded activity because of its associational nature, thereby discouraging the collective pursuit of common goals?” (emphasis in original, at para. 16). Such an approach may begin with the earlier framework, but a claimant may be able to answer the question in the affirmative even if the four-part test cannot be met.
126The purposive approach was recently confirmed by the Supreme Court in Mounted Police Assn. of Ontario v. Canada (Attorney General), 2015 SCC 1, [2015] 1 S.C.R. 3. The court described the purposive approach to s. 2(d) as protecting three basic classes of activities, at para. 66:
(1) the right to join with others and form associations;
(2) the right to join with others in the pursuit of other constitutional rights; and
(3) the right to join with others to meet on more equal terms the power and strength of other groups or entities.
127The criminal organization provisions were challenged in Terezakis as infringing the freedom of association. The court held that the definition of “criminal organization”, standing alone, does not create an offence, nor is there an offence of “membership” in a criminal organization; rather, all the offences require “knowledge of a connection between the organization and criminal activity that goes beyond mere innocent association with the organization” (at para. 44). Where an activity conducted by an individual is criminal, the activity cannot be protected by s. 2(d) when performed in a group: see R. v. Carrier, 2001 25110 (QC CS), [2001] R.J.Q. 628 (C.A.), at para. 31. The court in Terezakis cited Carrier and concluded, at para. 44, “It follows that the right to freedom of association is not infringed.”
Analysis
(a) Freedom of Expression
128Even assuming for the purposes of this argument that the placing of bets amounts to an expressive activity, the provision of the Criminal Code under which the Applicants are charged does not prohibit the placing of bets. It prohibits book-making and pool-selling, which, at least as far as book-making is concerned, has been interpreted as an enterprise, the business of which is taking bets and keeping accounts: see Decome. I do not see why pool-selling would be any less of an enterprise. Similar to the situation in Rosen, I cannot see how the commercial enterprise of taking bets or selling pools can be considered expressive. It conveys no meaning. The context of a “social activity” as described by the Applicants does not render the actual action of book-making/pool-selling “expressive”.
(b) Freedom of Association
129This, too, can be dealt with concisely. Section 202(1)(e) does not directly target the offence because of its associational nature. It makes it an offence to engage in book-making or pool-selling (amongst other grounds), activities which can be done in concert or entirely independently. The fact of the bettors’ participation in the activity does not make it associational. As discussed, the book-makers and bettors are at odds; they are not engaged “in the collective pursuit of common goals”: see Dunmore, at para. 16. If somehow the activity could be construed as collective in nature, the principle in Carrier and Terezakis would apply: conduct that would be criminal when conducted individually is not protected by s. 2(d) when conducted in a group. The exemption in s. 204(1)(a)(iii) serves the purpose of reducing the impact of the law on more “innocent” groups of gamblers and does not, by its existence, render the offence as one that targets conduct because of its associational nature.
130Accordingly, for the above reasons, I conclude that s. 202(1)(e) of the Criminal Code either on its own or when viewed together with s. 204(1)(a)(iii) of the Criminal Code does not violate either ss. 2(b) or 2(d) of the Charter.
IV. Section 1 Analysis
131Even if I am wrong in my view that there has not been a breach of s. 7 or ss. 2(b) or (d) of the Charter, I am nonetheless of the view that any such infringement or infringements would be justified under s. 1 of the Charter.
132The framework for the limitation of Charter rights under s. 1 was laid out in R. v. Oakes, [1985] 1 S.C.R. 103. Where there is a violation of a Charter right, the onus is on the Crown seeking to uphold the legislation to establish that the violation of the right is reasonably and demonstrably justified in a free and democratic society. The court must determine first, whether the purpose of the law is pressing and substantial, and second, whether the means by which that purpose is advanced are proportionate. The proportionality analysis asks three questions: (1) Is the limit rationally connected to the purpose? (2) Does the limit minimally impair the right? (3) Is there proportionality between the deleterious and salutary effects of the law?: see Michaud, at para 82.
133Although s. 7 and s. 1 appear closely related, the Supreme Court in Bedford explained why they are distinct, at para. 125:
Section 7 and s. 1 ask different questions. The question under s. 7 is whether the law’s negative effect on life, liberty, or security of the person is in accordance with the principles of fundamental justice. With respect to the principles of arbitrariness, overbreadth, and gross disproportionality, the specific questions are whether the law’s purpose, taken at face value, is connected to its effects and whether the negative effect is grossly disproportionate to the law’s purpose. Under s. 1, the question is different — whether the negative impact of a law on the rights of individuals is proportionate to the pressing and substantial goal of the law in furthering the public interest. The question of justification on the basis of an overarching public goal is at the heart of s. 1, but it plays no part in the s. 7 analysis, which is concerned with the narrower question of whether the impugned law infringes individual rights.
134The court also observed, at para. 129, “[T]he possibility that the government could establish that a s. 7 violation is justified under s. 1 of the Charter cannot be discounted.”
135In Michaud, the Ontario Court of Appeal cited Bedford in allowing impugned legislation to be saved under s. 1 though it violated s. 7. I agree with the Respondent that Michaud is not narrowly confined to the regulatory context. Generally speaking, given the language in Bedford, I see no reason why a criminal law provision that infringes s. 7 could not be saved under s. 1, provided that the state is able to show that the public good justifies depriving an individual of life, liberty or security of the person under s. 1 of the Charter: see Michaud, at para. 83.
(a) Pressing and Substantial Objective
136The impugned provisions respond to an objective that is of sufficient importance to warrant overriding a constitutionally protected right or freedom: see R. v. Big M. Drug Mart Ltd., 1985 69 (SCC), [1985] 1 S.C.R. 295, at p. 352. The expert evidence before me demonstrates that gambling is harmful on both an individual and societal level and the potential for harm is magnified in the context of criminal organization gambling. This presents an objective that is pressing and substantial in a free and democratic society: see Oakes, at para. 69.
137Combating criminal organizations and illegal gambling are pressing and substantial objectives as evidenced by Parliament’s intention in enacting the impugned Regulation and designating the gaming offences as serious offences.
138The gambling provision in s. 202(1)(e) of the Criminal Code prohibiting book-making and pool-selling pursues a pressing and substantial objective, namely preventing the harm that can be caused to individuals involved in gambling that is not monitored and regulated by the government.
139As noted earlier the s. 1 Charter analysis next considers whether the means by which these objectives are advanced are proportionate: (1) Is the limit rationally connected to the objective? (2) Does the limit minimally impair the right? and (3) Is there proportionality between the deleterious and salutary effects of the law? I will address these requirements in turn.
(b) Rational Connection
140The court in Michaud described the rational connection requirement as follows, at para. 117:
The government must establish a rational “connection between the infringement and the benefit sought on the basis of reason or logic” (RJR-MacDonald Inc. at para. 153; Carter, at para. 99). It must show that the limit is not arbitrary in the sense of being totally unconnected to the purpose for which it was enacted. In doing so, the government need only demonstrate a reasonable prospect that the limit will further the objective to some extent, not that it will certainly do so: Alberta v. Hutterian Brethren of Wilson Colony, 2009 SCC 37, [2009] 2 S.C.R. 567, at para. 48.
141The impugned provisions of the Regulation respond to the enhanced potential for harm in the context of criminal organization gambling. The inclusion of the gaming offences as “serious offences” for the purposes of the criminal organization provisions is therefore rationally connected to the objective of confronting such harm.
142As well, the s. 202(1)(e) provision of the Criminal Code is also rationally connected to its objectives. It seeks to prohibit for-profit gambling operations outside the scheme monitored and regulated by the government. The provisions specifically target conduct associated with the operation of a for-profit gambling venture. With respect to the issue of freedom of association, the numerical exemption contemplated by s. 204(1)(a)(iii) is based on a rational premise that larger gambling ventures are more likely to cause harm.
(c) Minimal Impairment
143The core element of proportionality review is the minimal impairment test.
144The court in Michaud described this test as follows, at para. 122:
In the minimal impairment analysis, the court asks “whether there are less harmful means of achieving the legislative goal” while at the same time deferring to the legislature in instances where it is better situated to choose among a range of alternatives: Hutterian Brethren, at para. 53; Carter, at para. 102. In order to satisfy this branch of the Oakes test, an alternative must achieve the purpose of the legislation to the same extent: Hutterian Brethren, at para. 54.
145Section 1 of the Charter does not demand that the limit on the right be perfectly calibrated, judged in hindsight, but only that it be reasonably and demonstrably justified: see Alberta v. Hutterian Brethren of Wilson Colony, 2009 SCC 37, [2009] 2 S.C.R. 567, at para. 37.
146In this case, the impugned Regulation is minimally impairing for the same reason it is not overbroad. It does not capture individuals who are not actively involved in criminal organization gambling. It only sweeps into its ambit conduct that fits the description of “criminal organization” as well as the other limiting language of the criminal organization provisions.
147As well, with respect to s. 202(1)(e), any interference of freedom of expression is narrowly targeted due to the operation of the s. 204 exemptions. With respect to the freedom of association, the numerical exemption provided for in s. 204(1)(a)(iii) is one of several such exemptions. For example s.204(1)(b) allows gambling without a profit motive and is not linked to a number of participants. This suggests that the s. 204(1)(a)(iii) exemption is meant to apply to small scale betting.
148By providing exemptions for small groups and private, not-for-profit bets, Parliament has created a scheme that minimally impairs the rights to expression and association. Book-making and pool-selling is permitted in circumstances considered less harmful by Parliament, demonstrating that Parliament considered and engaged tools to tailor the scheme to its objectives.
(d) The Proportionality of the Legislative Effects
149The court in Michaud describes this element as follows, at para. 137:
The proportionality analysis under s. 1 of the Charter differs from the analysis undertaken at the second stage of s. 7 relating to the application of the principles of fundamental justice. The s. 1 analysis is prescribed by the Supreme Court in Hutterian Brethren: Is the limit on the right proportionate in effect to the public benefit conferred by the limit (para. 73)? This analysis “takes full account of the ‘severity of the deleterious effects of a measure on individuals or groups’” (para. 76). It entails a broad assessment of whether the “benefits of the impugned law are worth the costs of the rights limitation” (para. 77), or whether “the deleterious effects are out of proportion with the public good achieved by the infringing measure” (para. 78).
150With respect to the s. 7 alleged infringement, any deleterious effects caused by the impugned provisions are outweighed by their salutary benefits. The impugned provisions of the Regulation, in conjunction with the criminal organization provisions of the Criminal Code, represent a balanced approach which is proportionate to the clearly articulated scope of the harm. The benefits of the impugned provisions are worth the costs of the rights limitation. The potential impact on liberty is minimized because the criminal organization regime does not interfere with the imposition of a proportionate sentence.
151With respect to the ss. 2(b) and (d) alleged infringements regarding s. 202(1)(e) of the Criminal Code, it cannot be said that conduct in relation to gambling, like that of prostitution, lies at, or even near, the core of the guarantee of freedom of expression or association: see Reference re ss. 193 & 195.1(1)(c), at para. 5.
152Even if such activity were to engage the core of these protections, gambling is not subject to an absolute ban. Persons who wish to participate in betting and wagering, or even offer such services, are free to do so within the regulatory scheme provided by federal and provincial law.
153The impugned s. 202(1)(e) of the Criminal Code prevents individuals from engaging in for-profit ventures without having to submit to measures meant to control the venture and protect the participants. These measures only restrict individuals where their conduct is harmful to others and to the public at large. The benefit of prohibiting this conduct is clear, and outweighs the deleterious effects of the minimal infringement on the rights to expression and association.
(e) Conclusion
154I would uphold the impugned legislation and Regulation under s.1 of the Charter if any of the impugned provisions therein were found to be in breach of a Charter right under either s. 7 or ss. 2(b) or (d) of the Charter. The Crown has justified any breaches of a Charter right in this case as a reasonable limit that is demonstrably justified in a free and democratic society under s. 1 of the Charter.
Summary and Conclusion
155To reiterate, I find as follows:
The gambling provisions in s. 202 of the Criminal Code are not ultra vires the federal criminal law power;
Regulation SOR/2010-161 does not breach s. 7 of the Charter. If the impugned provisions of the Regulation were found to breach s. 7, I find they would be justified under s. 1 of the Charter; and
Section 202(1)(e) of the Criminal Code either on its own or when viewed together with s. 204(1)(a)(iii) of the Criminal Code does not breach either ss. 2(b) or (d) of the Charter. If the impugned provisions were found to breach either ss. 2(b) or (d) of the Charter, I find they would be justified under s. 1 of the Charter.
156Accordingly, for the above reasons, the impugned provisions of the Criminal Code and federal Regulation are constitutionally valid in their entirety. The application is dismissed.
M.F. Brown J.
Released: February 4, 2016
CITATION: R. v. Hair, 2016 ONSC 900
COURT FILE NO.: CR-15-40000148-0000
DATE: 20160204
ONTARIO
SUPERIOR COURT OF JUSTICE
HER MAJESTY THE QUEEN
Respondent
– and –
DAVID HAIR, WILLIAM MILLER, MARK LANDON, CHRISTOPHER RUTLEDGE, JIM LUCKI and SHLOMO BUCHLER
Applicants
REASONS FOR DECISION
M.F. Brown J.
Released: February 4, 2016