On September 25, 2017, the Government of Canada announced the launch of a public consultation seeking input on potential enhancements to the Integrity Regime and on whether deferred prosecution agreements (“DPAs”) should be used in Canada. The purpose of the consultation is to ensure the Government “has effective mechanisms in place to continue addressing corporate wrongdoing in an evolving marketplace.”

Integrity regime

The Integrity Regime was introduced in 2015 to prevent suppliers with a record of unethical behaviour from being awarded contracts and real property agreements. Public Services and Procurement Canada determines whether a supplier is ineligible to do business with the government according to criteria set out in the Ineligibility and Suspension Policy. The policy generally applies to procurement and real property transactions over $10,000.

The government is looking for input from the public and private sector and other stakeholders on how to make the regime more effective and to ensure that it is achieving its objectives.

Deferred prosecution agreements

DPAs – sometimes called “non-prosecution agreements” – are voluntary agreements negotiated between an accused and the prosecutor to allow the accused to avoid being convicted in exchange for compliance with the terms of the DPA, which usually involves full cooperation with law enforcement.

Currently, Canadian law enforcement does not use DPAs as a means of resolving bribery offences under the Corruption of Foreign Public Officials Act (“CFPOA”) or other corporate crimes. The government has stated that it is considering DPAs as an additional tool for prosecutors to use to hold offenders to account and deter corporate wrongdoing. In its Expanding Canada’s toolkit to address corporate wrongdoing: The deferred prosecution agreement stream discussion guide, the government acknowledges that the potential advantages of DPAs may be that they encourage self-disclosure of misconduct, thereby enhancing detection and enforcement, and improving corporate culture and compliance.

Lessons from other jurisdictions

The United States and the United Kingdom have had DPA regimes in place for a number of years – in the United States, since the early 1990s. DPAs have been used effectively in a number of high profile cases in these jurisdictions to resolve investigations into alleged corporate offences, such as bribery offences or tax evasion (for example, see our posts on February 3, 2017 and September 15, 2017).

Other countries have jumped on the wagon. In late 2016, France adopted a DPA-like mechanism for anti-corruption investigations. In May 2017, Australia completed consultations on a draft law for DPAs.

The time has come for Canada to follow suit. As we have previously commented, DPAs could be an important tool to help Canadian law enforcement resolve cases involving criminal misconduct by corporations and to encourage companies to self-disclose wrongdoing, including bribery offences under the CFPOA.

The government’s consultation is open until November 17, 2017. More information on the consultation is available on the Consultation for Expanding Canada’s Toolkit to Address Corporate Wrongdoing web page.