Diversion programs for those accused of criminal offences are not new in Canada. In Québec, for example, first-time individual accused or accused suffering from a psychiatric or medical condition may participate in a diversion program, which results in the criminal charges being dropped. Corporations may also benefit from diversion programs, such as the Competition Bureau’s Immunity and Leniency Programs.
Transparency International Canada (“TI Canada”), a non-governmental anti-corruption organization, released a report in July, 2017 “urging” the Canadian government to adopt a Deferred Prosecution Agreement (“DPA”) mechanism, modeled closely to the current regime in the U.K. A DPA is an agreement between the prosecutor and the accused suspending outstanding charges and requiring the accused to fulfill a certain number of commitments. Once the accused has completed its contractual undertakings, the prosecutor will drop the charges.
TI Canada’s Recommended DPA Mechanism
The proposed scheme, according to TI Canada, addresses all the pitfalls of the current DPA regime in the U.S., but retains all of the advantages, including encouraging greater enforcement and self-reporting, saving costs and resources for both parties, and promoting certainty and transparency for all stakeholders involved.
TI Canada recommends that the proposed DPA scheme only be available to corporate accused who are charged with economic crimes. The DPA scheme would be legislatively enacted and judicially monitored to fulfill the underlying three objectives of financial reparations, sincere compliance reform, and accountability of individual wrongdoers.
Below is a summary of the proposed regime.
On December 10, 2015, SNC-Lavalin announced that it had signed the first-ever administrative agreement with the Government of Canada under the Integrity Regime.
The Integrity Regime, in effect since July 2015, bars companies and their related legal entities from bidding on government contracts if they are charged with or convicted of certain criminal or administrative charges. SNC-Lavalin is currently battling fraud and corruption charges filed in February, 2015 regarding three of its legal entities. This administrative agreement allows it to bid and win government contracts as it signifies the government’s satisfaction with SNC-Lavalin’s ethics and compliance programs.
SNC-Lavalin had to undertake and institute a comprehensive ethics and compliance program. Some of the measures it took include an antitrust and competition policy, a whistleblowing policy, a political contribution policy, appointing compliance officers in every business sector, and obligatory compliance training and certification for all employees.
This is a significant step towards addressing what many companies and legal advisors believe to be a harsh policy. Until now, the Integrity Regime allowed very little discretion to the government to create an alternative to debarment of the accused, pending a judicial decision on criminal charges. While on its face, the Integrity Regime remains rigid, in practice, it now appears that companies facing criminal charges or under investigation may have other options.
On July 3, 2015, the Government of Canada introduced a new and controversial procurement policy with serious repercussions should a company be charged with certain criminal offences.
The Department of Public Works and Government Services Canada’s (PWGSC) Ineligibility and Suspension Policy  states that if a person or company is charged criminally, they may be barred (also known as “debarment”) from doing business with the federal government for up to ten years.
For individuals and corporations who do, or want to do, business with the Canadian government, this policy is a game changer. Such companies must now consider if and how they can avoid being charged.
Many companies already take steps to avoid criminal prosecution. But in an increasingly complex business world, where companies have operations globally, the risk of running afoul of the law, both at home and abroad, cannot be eliminated. Recent changes to Canada’s Criminal Code, which have expanded who within a company can create criminal liability for a corporation, have increased this risk.