John Campion, Antonio Di Domenico, Sep 13, 2012
Administrative Monetary Penalties (“AMPs”) are monetary penalties where payment is ordered by a decision maker acting under a statutory power. AMPs are popular among regulators, including the Commissioner of Competition, because they fill the gap between true administrative remedies and criminal sanctions. They allow regulators to collect considerable sums without having to prove their cases on the “beyond a reasonable doubt” criminal standard. However, some AMPs are so large that they arguably amount to penal sanctions, triggering constitutional protections under theCanadian Charter of Rights and Freedoms.
Recently, in Rowan v. Ontario Securities Commission, AMPs under Ontario’sSecurities Act survived a constitutional challenge. The penalties imposed in that case totalled more than $1.2 million. Under the federal Competition Act, AMPs for an initial breach of the civil deceptive marketing practices provisions can be up to $750,000 for individuals and $10 million for corporations. These penalties increase to $1 million for individuals and $15 million for corporations for subsequent orders. Further, the AMPs for abuse of dominance are up to $10 million for the first breach and $15 million for subsequent orders.
Rowan provides some constitutional comfort for regulators imposing extremely high AMPs. However, this does not mean that the AMPs under theCompetition Act are impervious to constitutional scrutiny. A defendant subject to a financially devastating AMP under the Competition Act may insist on testing their constitutionality. The judicial analysis that would arise from such a constitutional test would be helpful, particularly since the AMPs under the Competition Actare far more severe than those available under the Securities Act.