R. v. Carson, 2018 SCC 12 – Criminal law — Fraud on government — Influence peddling
On appeal from a judgment of the Ontario Court of Appeal (2017 ONCA 142) setting aside the acquittal entered by Warkentin J. (2015 ONSC 7127).
C was formerly a Senior Advisor in the Office of the Prime Minister. The year following his departure from this position, he agreed to use his government contacts to help H2O Professionals Inc. sell water treatment systems to First Nations. In exchange, H2O promised to pay a commission to his then girlfriend. After this agreement was made, C spoke to government officials in order to promote the purchase of H2O’s products. He sought to convince Indian and Northern Affairs Canada to set up a project whereby it would fund the purchase of H2O’s products to pilot them in First Nations communities. Sections 121(1)(a)(iii) and 121(1)(d)(i) of the Criminal Code criminalize the selling of influence in connection with any matter of business relating to the government. C was charged with influence peddling under s. 121(1)(d). At trial, he took the position that his assistance was not in connection with a matter of business relating to the government. The trial judge agreed and acquitted him on the basis that First Nations, rather than government, decided whether to purchase the type of water treatment systems sold by H2O. A majority of the Court of Appeal allowed the appeal. It set aside the acquittal, entered a verdict of guilty and remitted the matter to the trial judge for sentencing.
Held (8-1): The appeal should be dismissed.
Per McLachlin C.J. and Abella, Moldaver, Karakatsanis, Wagner, Gascon, Brown and Rowe JJ.: By criminalizing influence peddling, s. 121(1)(d) of the Criminal Code strives to preserve both government integrity and the appearance of government integrity. It helps ensure that government activity is driven by the public interest and promotes confidence in our democratic process. Section 121(1)(d) creates a conduct offence. The offence is complete once the accused demands a benefit in exchange for a promise to exercise influence in connection with a matter of business that relates to government. The accused does not need to actually have influence with the government, endeavour to exercise influence, or succeed in influencing government to be found guilty of this offence. The relevant constituent elements of the offence are: having or pretending to have influence with the government, a minister, or an official; directly or indirectly demanding, accepting, or offering or agreeing to accept a reward, advantage or benefit of any kind for oneself or another person; as consideration for the cooperation, assistance, exercise of influence, or an act or omission; in connection with a transaction of business with or any matter of business relating to the government.
The offence under s. 121(1)(d)(i) requires that the promised influence be in fact connected to a matter of business that relates to government. Simply showing that the accused accepted a benefit in exchange for promising to influence government does not suffice to make out the offence. Nevertheless, the phrase “any matter of business relating to the government” must be interpreted broadly. Reading the words of this phrase in their entire context and in their grammatical and ordinary sense, harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament, a matter of business relates to the government if it depends on government action or could be facilitated by the government, given its mandate. Matters of business relating to the government include publicly funded commercial transactions for which the government could impose or amend terms and conditions that would favour one vendor over others. The phrase “any matter of business relating to the government” must not be restricted to matters of business that can be facilitated by government under its existing operational structure. The offence captures promises to exercise influence to change or expand government programs.
C’s promised assistance was in connection with a matter of business relating to the government. The federal government has the authority to provide services, including clean drinking water, on First Nations reserves. Therefore, it could have facilitated the sale of H2O’s products to First Nations. Although, at the time of the offence, First Nations could have purchased systems such as H2O’s with government funds without obtaining government’s prior approval, the government could have changed its mode of operations, modified its funding structure or terms and conditions, or created new pilot projects in a manner favorable to H2O. Further, it was clear that C believed, at the time he made the agreement, that the sale of H2O’s products to First Nations could be facilitated by the government. By demanding a benefit in exchange for his promise to exercise his influence with the government to H2O’s advantage, C undermined the appearance of government integrity. This is exactly the type of conduct s. 121(1)(d)(i) is intended to prohibit.
Per Côté J. (dissenting):
It is a fundamental substantive principle of criminal law that there should be no criminal responsibility if an element of the actus reus is missing at the time of the alleged offence. In order to make out the offence under s. 121(1)(d), the Crown must establish, as a distinct element of the offence, the existence of an actual connection with government business. This element should be interpreted narrowly by defining government business by reference to the operational structures of government in place at the time of the offence.
The purpose of s. 121(1)(d) is to preserve the integrity of government. It is not intended to protect the perceived integrity of government, which is the unique purpose underlying s. 121(1)(c). The quid pro quo required for all s. 121 offences other than ss. 121(1)(b) and 121(1)(c) is a corrupt practice that carries the potential to undermine government integrity. This requirement signals Parliament’s concern with actual government integrity. In contrast, s. 121(1)(c) (and presumably s. 121(1)(b), a mirroring provision,) seek to preserve the integrity of government and the appearance of integrity. No quid pro quo is required to establish these offences.
In order to make out the offence under s. 121(1)(d), the Crown must establish, as a distinct element of the offence, that the matter of business contemplated by the agreement actually relates to government. The matter of business must relate to the government in reality and must not merely be believed by the parties to the agreement to relate to the government. This interpretation is supported by a plain reading as well as a purposive and contextual analysis of s. 121(1)(d). It gives full effect to the language of the provision, whereby Parliament very carefully defined the requisite connection to the government. It ensures a consistent interpretation across s. 121 offences. All other offences under s. 121 which do not incorporate s. 121(1)(a)(iii) and (iv) by reference require that the business in question actually relate to the government. The purpose of s. 121(1)(d) confirms that the offence requires an actual connection with government business. It seeks to protect government integrity by criminalizing corrupt agreements, which, if successfully carried out, would pose an actual risk to it. No such risk exists in circumstances where the matter of business in question does not actually relate to the government.
The scope of s. 121(1)(d) should be limited to matters of business that depend on some government approval or action within existing operational structures of government. Section 121(1)(d) creates a conduct offence aimed at deterring behaviour that has the potential to inflict substantive harm, in this case entering into a corrupt agreement. As such, it requires no further action beyond the agreement itself. It follows that any relationship between the matter of business concerned and the government must exist at the time of the agreement. Where the government has intentionally placed matters of business outside of its operational reach, they cannot be said to be matters of government business simply because the government could, at a future date, reclaim control over them. A matter of business will relate to the government only if the operational structures in place at the time of the agreementare such that it depends on some government approval or action.
The agreement between C and H2O was not made in connection with a matter of business relating to the government. The matter of business contemplated by the agreement was the sale of point‑of‑use water treatment systems to First Nations. The trial judge avoided any reliance on the evidence relating to pilot projects or the Protocol for Decentralised Water and Wastewater Systems in First Nations Communities. The Crown did not seek to convict C on the basis that he agreed to use his influence to change government policies. As the federal government had, at the time of the agreement, granted First Nations complete autonomy with regard to the purchase of point‑of‑use water treatment systems, the agreement cannot be said to be in connection with a matter of business relating to the government.