R. v. Lavigne, 2006 SCC 10, [2006] 1 SCR 392

                                                 SUPREME COURT OF CANADA

Between:

Her Majesty the Queen

Appellant

and

Richard Lavigne

Respondent

Official English Translation

Coram: McLachlin C.J. and Bastarache, LeBel, Deschamps, Fish, Abella and Charron JJ.

______________________________

R. v. Lavigne, [2006] 1 S.C.R. 392, 2006 SCC 10

Her Majesty The Queen                                                                                  Appellant

v.

Richard Lavigne                                                                                            Respondent

Indexed as:  R. v. Lavigne

Neutral citation:  2006 SCC 10.

File No.:  30508.

2005:  December 8; 2006:  March 30.

Present:  McLachlin C.J. and Bastarache, LeBel, Deschamps, Fish, Abella and Charron JJ.

on appeal from the court of appeal for quebec

Criminal law — Proceeds of crime — Forfeiture — Fine instead of order of forfeiture of property that proceeds of crime — Whether ability of accused to pay factor that court may consider in deciding to impose fine instead of forfeiture or in determining amount of fine — Criminal Code, R.S.C. 1985, c. C‑46, s. 462.37 .

The accused pleaded guilty on a count of conspiring to produce and traffic in cannabis, possess cannabis for the purpose of trafficking and possess property derived from trafficking in cannabis, and on another count of committing indictable offences for the benefit of a criminal organization.  The sentence imposed for an offence under Part XII.2 of the Criminal Code  on proceeds of crime consists of two elements:  the penalty for committing a designated offence, and forfeiture of any property that is proceeds of crime; where forfeiture is not practicable, the court “may” impose a “fine in an amount equal to the value of that property” instead of making a forfeiture order (s. 462.37(3)).  The trial judge sentenced the accused to imprisonment for 19 months for the offences he had committed.  Regarding the fine instead of a forfeiture order, he found that the accused had received at least $150,000 from the crimes in question but that he was no longer in possession of that amount, as he had squandered a large part of it.  Taking the ability of the accused to pay into consideration, the judge found that a $20,000 fine was justified.  The prosecution appealed in respect of the amount of the fine.  The Court of Appeal dismissed the appeal.

Held:  The appeal should be allowed.

The trial judge should have imposed a fine of $150,000.  In imposing a fine instead of forfeiture, a court has a discretion that is limited both by the words of s. 462.37(3) and by its context.  The clear words of s. 462.37(3) provide that the fine is “equal to the value of [the] property”.  For the substitution to be genuine, the amount of the fine must be equal to the value of the property being replaced.  The court’s discretion applies both to the decision whether or not to impose a fine and to the determination of the value of the property.  It must be exercised in light of the evidence, and once this process has been completed, the court may not take the offender’s ability to pay into consideration as a basis for deciding either to impose no fine or to reduce the amount of the fine.  The provisions relating to proceeds of crime are specific rules that partially preclude the application of the general rules on sentencing.  Taking the ability of the accused to pay into consideration is not compatible with the objectives of these specific provisions, which are intended to deprive the offender and the criminal organization of the proceeds of their crime and to deter them from committing crimes in the future.  The effect of the word “may” in s. 462.37(3) cannot therefore be to grant the court a broad discretion, having regard to the objectives of the provision, the nature of the order and the circumstances in which the order is made. [16] [27] [35] [44] [51‑52]

An analysis of the broader context of the rules on sentencing, and in particular of s. 734(2)  of the Criminal Code , also supports an interpretation of s. 462.37(3) that precludes consideration of the offender’s ability to pay.  To read s. 734(2) narrowly and to find that the court is neither required to take ability to pay into consideration nor prevented from doing so disregards both the words of s. 462.37(3) and the comments made at the time of the amendment of s. 734(2), which clearly preclude consideration of the ability to pay. [38] [42] [44]

Since the time allowed for paying the fine and the conditions applicable to the issuance of a warrant of committal are not addressed in Part XII.2 of the Code, the common law principles and the general sentencing provisions apply on a suppletive basis.  Thus, the ability to pay is a factor that may be taken into consideration at the stage of determination of the time limit for payment.  In addition, when the time allowed for payment of the fine instead of forfeiture has expired, the court may not issue a warrant of committal unless it is satisfied that the offender has, without reasonable excuse, refused to pay the fine.  Failure to pay because of poverty cannot be equated to refusal to pay. [45] [47]

Cases Cited

Referred to:  Quebec (Attorney General) v. Laroche, [2002] 3 S.C.R. 708, 2002 SCC 72; R. v. Savard (1998), 126 C.C.C. (3d) 562; R. v. Neves (2005), 202 C.C.C. (3d) 375, 2005 MBCA 112; R. v. Garoufalis (1998), 131 C.C.C. (3d) 242; R. v. Geschwandtner (2004), 241 Sask. R. 248, 2004 SKCA 15; R. v. Wu, [2003] 3 S.C.R. 530, 2003 SCC 73.

Statutes and Regulations Cited

Criminal Code , R.S.C. 1985, c. C‑46  [am. c. 42 (4th Supp.)], ss. 2 “property”, Part XII.2, 462.3(1) “proceeds of crime”, 462.31(1), (2), 462.32, 462.37, 465, 467.12, 734(2) [am. 1995, c. 22, s. 6; am. 1999, c. 5, s. 33(1)], 734.7(1)(b), 787.

Treaties and Other International Instruments

Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, Can. T.S. 1990 No. 42.

Authors Cited

Canada.  House of Commons Debates, vol. 135, 1st Sess., 36th Parl., November 4, 1998, p. 9840.

Canada.  House of Commons.  Minutes of Proceedings and Evidence of the Legislative Committee on Bill C‑61, Issue No. 1, 2nd Sess., 33rd Parl., November 5, 1987, p. 1:8.

Canada.  House of Commons.  Minutes of Proceedings and Evidence of the Legislative Committee on Bill C‑61, Issue No. 9, 2nd Sess., 33rd Parl., June 1, 1988, p. 9:27.

Driedger, Elmer A.  Construction of Statutes, 2nd ed.  Toronto:  Butterworths, 1983.

German, Peter Maurice.  Proceeds of Crime:  The Criminal Law, Related Statutes, Regulations and Agreements.  Scarborough, Ont.:  Carswell, 1998 (loose‑leaf updated 2005, rel. 3).

APPEAL from a judgment of the Quebec Court of Appeal (Baudouin, Proulx and Rochon JJ.A.), [2004] R.J.Q. 1796, 23 C.R. (6th) 313, [2004] Q.J. No. 6963 (QL), affirming a decision of Marchand J.C.Q., [2003] Q.J. No. 14742 (QL), imposing a fine of $20,000 on the accused.  Appeal allowed.

Yvan Poulin and Michel F. Denis, for the appellant.

No one appeared for the respondent.

Lucie Joncas, as amicus curiae.

English version of the judgment of the Court delivered by

1                                   Deschamps J. — The issue in this appeal can be stated as follows: is an offender’s ability to pay a factor that a court may consider in deciding to impose a fine instead of ordering the forfeiture of property that is proceeds of crime (s. 462.37(3)  of the Criminal Code , R.S.C. 1985, c. C‑46  (“Cr. C.”))?  For the reasons that follow, I am of the opinion that the discretion granted under that provision is limited and that ability to pay may not be taken into consideration either in the decision to impose the fine or in the determination of the amount of the fine.

1.      Facts, Arguments and Judgments of the Court of Québec and the Court of Appeal

2                                   In the course of an investigation it undertook in 2001 in cooperation with a number of municipal police services, the Sûreté du Québec, Canadian and American customs officers and the United States Drug Enforcement Administration, the Royal Canadian Mounted Police identified a cannabis trafficking ring.  On July 3, 2002, 26 individuals, including the respondent, were charged.  The respondent pleaded guilty before a judge of the Court of Québec on a count of conspiring to produce and traffic in cannabis, possess cannabis for the purpose of trafficking and possess property derived from trafficking in cannabis (s. 465 Cr. C.), and on another count of committing indictable offences for the benefit of a criminal organization (s. 467.12 Cr. C.).

3                                   The prosecution suggested a sentence of imprisonment for six years less time served in pre‑trial detention, and a fine instead of an order of forfeiture (s. 462.37(3) Cr. C.).  It submitted that the money could not be located because the respondent had disposed of it by making various gifts and purchases.  Counsel for the respondent recommended a sentence of 40 months that, once the period of pre‑trial detention was taken into account, would have been reduced to eight and a half months’ imprisonment, which could have been served in the community.  On the question of the fine, counsel argued that the respondent had not benefited personally from the money, but rather had spent it on his friends and family.

4                                   After sentencing submissions were made, the judge found that the respondent had personally participated in transporting the cannabis and that he was not just an underling.  He had brought another individual into the ring, trained him, and received a share of the income that this individual made from the illegal activities.  The respondent had received at least $150,000 from the crimes in question.  The judge determined the appropriate sentence to be imprisonment for 50 months, which he reduced to 19 months to take the period of pre‑trial detention into account.  Because of the nature of the charges, he denied the respondent’s request to serve the sentence in the community.  Regarding the request for a fine instead of a forfeiture order, the judge said that he was unable to find that the respondent was still in possession of the $150,000 he had received from the illegal activities.  Stating that he was exercising his discretion and finding that the majority opinion in the case law required him to take the respondent’s ability to pay into consideration, the judge concluded that a $20,000 fine was [translation] “justified” ([2003] Q.J. No. 14742 (QL), at para. 56).

5                                   The prosecution appealed to the Court of Appeal solely in respect of the amount of the fine imposed instead of a forfeiture order.  It submitted that the judge did not have authority to reduce the amount of the fine.  The Court of Appeal dismissed the appeal ([2004] R.J.Q. 1796).  It first observed that a forfeiture order under s. 462.37(1) is mandatory.  However, it considered the imposition under s. 462.37(3) of a fine instead of a forfeiture order to be optional.  In the Court of Appeal’s view, while s. 734(2) does not obviate the general rule that an offender’s ability to pay should be taken into consideration, that rule is simply not mandatory in the case of a fine instead of forfeiture.  The court concluded that it would be unfair not to take ability to pay into account.

6                                   The prosecution was granted leave to appeal to this Court.  The respondent was not represented, and the Court appointed counsel to act as amicus curiae.

2.      Analysis

7                                   The case at bar concerns the interpretation of s. 462.37(3) Cr. C.  I propose to apply what is now referred to as the modern approach to interpretation: “the words of an Act are to be read 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” (E. A. Driedger, Construction of Statutes (2nd ed. 1983), at p. 87).  I will therefore briefly discuss the context in which the provisions relating to the proceeds of crime were enacted and will provide an overview of the provisions as a whole, in order to determine their spirit and object, and the intention of Parliament.  I will then discuss the provision in question in the context of Part XII.2 (Proceeds of Crime), and will conclude by considering the impact of the general sentencing provisions.

2.1    Context in Which the Provisions Relating to the Proceeds of Crime Were Enacted and Overview of the Provisions

8                                  In 1989, Canada honoured the commitment it had made when it signed the Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, Can. T.S. 1990 No. 42, by amending the Criminal Code  to add Part XII.2 (Proceeds of Crime): R.S.C. 1985, c. 42 (4th Supp.) (formerly S.C. 1988, c. 51), s. 2.  The new provisions allowed the prosecution to use unprecedented investigative methods (s. 462.32), created new offences (s. 462.31(1)) and established special rules for sentencing (ss. 462.31(2) and 462.37).  As P. M. German correctly writes, Parliament goes beyond the offender him or herself and targets the proceeds of crime (Proceeds of Crime:  The Criminal Law, Related Statutes, Regulations and Agreements (loose‑leaf ed.), at p. 3‑4):

Part XII.2 goes much further than other crime control initiatives, representing a paradigmatic shift from the traditional, single transaction, individual‑oriented structure of criminal law with which Canadians are familiar, to one which is both property‑driven and premised upon multiple transactions perpetrated by criminal organizations.  It focuses upon the proceeds of crime, as opposed to the offender, individual or corporate; the avowed purpose being to neutralize criminal organizations rather than punish individual offenders.  Its effectiveness in achieving these goals is inexorably tied to the speed by which criminal proceeds can be seized or frozen and as a result, it acts prospectively, in anticipation of a conviction in later proceedings.  [Citations omitted.]

9                                  Great importance is thus attached to the proceeds of crime, and one of the stated goals is to neutralize criminal organizations by depriving them of the profits of their activities.  The Honourable Ray Hnatyshyn, who was the Minister of Justice when the bill was introduced, said that traffickers had been insufficiently deterred by traditional sentencing methods.  Canada therefore had to adopt methods by which it could deprive offenders of the profits of their crimes and take away any motivation to pursue their criminal activities.  Of all the methods chosen, the primary one is forfeiture (House of Commons, Minutes of Proceedings and Evidence of the Legislative Committee on Bill C‑61, Issue No. 1, November 5, 1987, at p. 1:8).  The effectiveness of the adopted methods depends largely on the severity of the new provisions and on their deterrent effect (Quebec (Attorney General) v. Laroche, [2002] 3 S.C.R. 708, 2002 SCC 72, at para. 25).

2.2      Provision in Issue in the Context of Part XII.2 (Proceeds of Crime)

10                              The sentence imposed for an offence under Part XII.2 on proceeds of crime consists of two elements:  the penalty for committing a designated offence (s. 462.3(1)), and forfeiture of the proceeds of crime (s. 462.37(1)).  The new provisions are in addition to existing methods.  The intention of Parliament is clear.  Not only must the act itself be punished, but it must not benefit the offender.  Parliament’s purpose in doing this is to ensure that crime does not pay.  Although the appeal concerns the discretion of a court that imposes a fine instead of forfeiture, the objective of the primary provision must be correctly established for it to be possible to identify the objective of the provision authorizing this sentence.

11                              The primary provision on forfeiture is capable of very broad meaning.  It reads as follows:

462.37 (1)  Subject to this section and sections 462.39 to 462.41, where an offender is convicted, or discharged under section 730, of a designated offence and the court imposing sentence on the offender, on application of the Attorney General, is satisfied, on a balance of probabilities, that any property is proceeds of crime and that the designated offence was committed in relation to that property, the court shall order that the property be forfeited to Her Majesty to be disposed of as the Attorney General directs or otherwise dealt with in accordance with the law.

12                              The property that is liable to forfeiture is property that is “proceeds of crime”.  This expression is defined as follows in s. 462.3(1):

462.3 (1) . . . 

“proceeds of crime” means any property, benefit or advantage, within or outside Canada, obtained or derived directly or indirectly as a result of

(a)  the commission in Canada of a designated offence, or

(b)  an act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence.

The word “property” is defined in s. 2:

2. . . .

“property” includes

(a)  real and personal property of every description and deeds and instruments relating to or evidencing the title or right to property, or giving a right to recover or receive money or goods,

(b)  property originally in the possession or under the control of any person, and any property into or for which it has been converted or exchanged and anything acquired at any time by the conversion or exchange,

. . .

13                              There is thus a wide range of property that could be proceeds of crime.  Such property may consist of real rights or personal rights, of corporeal or incorporeal property.  Forfeiture may apply to the original property, or property acquired in exchange for or by conversion of the original property.  It could also apply to a right in a portion of property.  The link between the property or right and the designated offence need not be direct.  It is enough that the offence be committed “in relation to” the property or the right.

14                              As is clearly stated in s. 462.37(1), a court imposing sentence on an offender convicted of an offence involving the proceeds of crime “shall”, on application of the Attorney General, order the forfeiture of the property where the offence was committed in relation to that property.

15                              The broad meaning of the expressions “proceeds of crime” and “in relation to”, combined with the fact that no discretion whatsoever is provided for in s. 462.37(1), is significant.  Parliament has made this provision mandatory by requiring forfeiture and making the provision apply to the widest possible range of property.

16                              Parliament’s intention in enacting the forfeiture provisions was to give teeth to the general sentencing provisions.  While the purpose of the latter provisions is to punish an offender for committing a particular offence, the objective of forfeiture is rather to deprive the offender and the criminal organization of the proceeds of their crime and to deter them from committing crimes in the future.  The severity and broad scope of the provisions suggest that Parliament is seeking to avert crime by showing that the proceeds of crime themselves, or the equivalent thereof, may be forfeited.

17                              The severity shown by Parliament is further illustrated by s. 462.37(2), which provides that where the evidence does not establish a connection between property and the offence of which an offender has been convicted, the property may nevertheless be forfeited if it is proven to be proceeds of crime.

18                              Forfeiture of the proceeds of crime is not always practicable, however.  The proceeds of a crime may have been used, transferred or transformed, or may simply be impossible to find.  To ensure that the proceeds of a crime do not indirectly benefit those who committed it, Parliament has provided that the court may impose a fine instead of forfeiture of the proceeds of crime.  It is therefore from the perspective of the objective of the forfeiture provisions that the fine instead of forfeiture must be considered.

19                              While the words used by Parliament allow the court no flexibility where the property can be located, it uses more permissive language in respect of a fine imposed instead of forfeiture.  Section 462.37(3) provides that where forfeiture is not practicable, the court “may” impose a fine instead of making a forfeiture order.  It reads as follows:

462.37 . . .

(3)    Where a court is satisfied that an order of forfeiture under subsection (1) should be made in respect of any property of an offender, but that that property or any part thereof or interest therein cannot be made subject to such an order and, in particular,

(a)  cannot, on the exercise of due diligence, be located,

(b)  has been transferred to a third party,

(c)   is located outside Canada,

(d)  has been substantially diminished in value or rendered worthless, or

(e)   has been commingled with other property that cannot be divided without difficulty,

the court may, instead of ordering that property or part thereof or interest therein to be forfeited pursuant to subsection (1), order the offender to pay a fine in an amount equal to the value of that property, part or interest.

20                              It may seem strange for Parliament to have directed that a forfeiture order be made where the prosecution can establish a connection between particular property and the offence for which the offender is being sentenced, but to have used an expression that generally reflects discretion in respect of the process that the court must engage in to decide whether or not to impose a fine instead of forfeiture.

21                              According to one interpretation, the word “may” indicates that the court has a broad discretion to adjust the amount of the fine by applying the general principles of sentencing, subject to the specific rules that have been expressly provided for.  This is the approach taken by the Quebec Court of Appeal in R. v. Savard (1998), 126 C.C.C. (3d) 562, and in the case at bar.  The majority of the Manitoba Court of Appeal in R. v. Neves (2005), 202 C.C.C. (3d) 375, 2005 MBCA 112, was also of the opinion that where a court imposes a fine instead of forfeiture, it may take ability to pay into consideration in deciding whether to impose this sanction.  However, the majority in Neves did not find that the court’s discretion allows it to reduce the amount of the fine to take into account the offender’s ability to pay as a factor in individualization.  According to a second interpretation, the word “may” conveys an obligation and is equivalent to “shall” once the court finds that the property cannot be forfeited.  This is the interpretation adopted by the minority in Neves, by the Manitoba Court of Appeal in R. v. Garoufalis (1998), 131 C.C.C. (3d) 242, and by the Saskatchewan Court of Appeal in R. v. Geschwandtner (2004), 241 Sask. R. 248, 2004 SKCA 15.  Finally, according to a third interpretation, the court has a limited discretion when it imposes a fine, but the offender’s ability to pay is not a factor that may be taken into consideration.  This is what the prosecution is suggesting, correctly in my opinion, in the instant case.

2.2.1      First Interpretation:  Broad Discretion

22                              The word “may” is often used to indicate a broad discretion.  It is necessary to avoid falling into the trap of literal interpretation, however.  The courts developed the modern approach to interpretation after realizing how unreliable the literal approach was.

23                              The court’s discretion is necessarily limited by the purpose of the order to be made.  It may be exercised only to impose a fine instead of forfeiture.  This option is not available in every case.  The discretion may be exercised only where the court cannot order forfeiture or where forfeiture is not practicable.  Because the purpose of forfeiture is to deprive offenders of the proceeds of crime and in so doing to deter the offenders themselves as well as criminal organizations from committing the designated offences, the discretion must also be exercised having regard to the fact that Parliament is seeking to deter not only offenders, but also criminal organizations.

24                              The list of circumstances in which the court may, inter alia, impose a fine instead of forfeiture also illustrates the limits of the discretion.  For instance, the discretion may be exercised (a) where the property cannot, on the exercise of due diligence, be located or (b) where the property has been transferred to a third party.  The list does not appear to be restrictive, given the use of the expression “in particular”, which suggests that there are other circumstances that do not appear on the list.  However, those circumstances must be similar in nature to the ones that are expressly mentioned.  The judge could not therefore decline to impose a fine simply because the offender is no longer in possession of the property or simply because (c) the property is located outside Canada.  Thus, the judge cannot transform circumstances in which a fine may be ordered instead of forfeiture into circumstances that justify not imposing a fine.

25                              The amicus curiae argues that the effect of imposing a fine without regard to the general principles of sentencing is to punish the offender twice.  What that argument fails to consider is that those principles are not all disregarded and that a fine instead of forfeiture is seen as a separate component of the sentence.  While such an order is technically part of the sentence, it is nevertheless distinguished by the fact that its purpose is to replace the proceeds of crime.  It is not regarded as punishment specifically for the designated offence.

26                              The actual objective of Part XII.2 is to deal with the proceeds of crime separately from, and in addition to, the punishment for committing a crime.  The fine imposed in this instance has some special features:  there are specific rules for imprisonment in default of payment (s. 462.37(4) and (5)).  The fine or imprisonment imposed as the primary sentence punishes the commission of the designated offence, while forfeiture or a fine instead of forfeiture deprives the offender of the proceeds of his or her crime and deters potential offenders and accomplices.

27                              The effect of the word “may” cannot therefore be to grant a broad discretion.  The exercise of the discretion is necessarily limited by the objective of the provision, the nature of the order and the circumstances in which the order is made.

2.2.2    Second Interpretation:  The Word “May” Is Equivalent to “Shall”

28                              The second interpretation is no more satisfactory, because it cannot be reconciled with the provisions of Part XII.2 as a whole.  It is important to recall that the objectives are to deprive offenders of the proceeds of their crimes and to deter potential offenders and criminal organizations.  On the one hand, the word “may” must not be read to say “must” unless such an interpretation is dictated by the context.  That is not the case here.  It can be seen from the provisions of Part XII.2 as a whole that “may” is being used in its literal sense.  On the other hand, a court may face circumstances in which the objectives of the provisions do not call for a fine to be imposed.  An example of this would be if the offender did not profit from the crime and if it was an isolated crime committed by an offender acting alone.  In such a case, none of the objectives would be furthered or frustrated by a decision not to impose a fine instead of forfeiture.  The word “may” allows for an exercise of discretion that is consistent with the spirit of the whole of the provisions in question.

2.2.3   Third Interpretation:  The Judge Has a Limited Discretion That Does Not Allow Ability to Pay to Be Taken Into Consideration

29                               I said earlier that in my opinion the judge has a limited discretion in imposing a fine instead of forfeiture.  I also gave examples of limits on that discretion and cited a case in which it might be exercised.  The factual circumstances that may give rise to an exercise of the discretion may vary, and it would be unrealistic to claim to foresee all of them.  I will therefore limit my discussion to the single factor that was argued:  ability to pay.

30                               It is plain from the context of the provision that Parliament’s intention is to focus on depriving offenders of the proceeds and on the measure’s deterrent aspect.  On its face, it would seem to be inconsistent with those objectives to consider ability to pay.  It is particularly true where, as in the case at bar, drug trafficking is involved that the proceeds of crime often consist of cash.  If the offender no longer has the money, it will often be because he or she has spent it.  If the fact that the money has been spent is a ground for being exempted from the order, would this not incite offenders to quickly squander the proceeds of crime?  This result would undoubtedly run counter to the intended purpose, which is to deprive offenders and criminal organizations of the proceeds of their crimes.  As well, if inability to pay were a ground for reducing the fine, criminal organizations would be able to engage poor people in the knowledge that the courts will show clemency in imposing fines.  Consideration of inability to pay can therefore have perverse effects that run directly counter to Parliament’s objective of deterrence.

31                               Obviously, where a sum of money is concerned, a reduction in the value of such property is most often associated with the use thereof, which is itself often associated with an absence of other income.  If one of the objectives is to ensure that crime does not pay, use of the proceeds of crime must be a basis for ordering a fine instead of forfeiture of the property and cannot be a basis for mitigating the impact of the measure.

32                               The mere fact that the property has been used cannot therefore justify exercising the discretion to reduce the amount of the fine, especially where the property consists of cash.  The fact that the offender no longer has enough money must not therefore serve as a way to avoid a fine.  A fine can be ordered only if the property cannot be forfeited or if forfeiting it is impracticable.  Moreover, s. 462.37(3)(d) is significant: a fine may be imposed where the property has been substantially diminished in value.  The purpose of the order, to replace the property, would be thwarted if the offender could avoid the fine simply by spending the proceeds of the crime.

33                               Reducing the fine to take ability to pay into account can in fact undermine the purpose of the order.  A forfeiture order is made in addition to the sentence imposed for the designated offence.  Because the sentence may itself include a fine and because the court must, under the general rules, take ability to pay into account, ability to pay would, if it were a valid consideration under s. 462.37(3), be taken into account twice, which could have the effect of reducing the amount the court could assess to nil.

34                               The limits on the court’s discretion can be deduced from the objective and context of s. 462.37(3) Cr. C.  They are also incorporated into the words of the provision itself.  The court’s discretion is limited not only by the circumstances in which the substitution may be made, in particular those listed in paras. (a) to (e), but, even more importantly, by the clear words of the provision itself.  The amount of the fine is established by the Criminal Code : the court “may, instead of ordering that property . . . to be forfeited . . ., order the offender to pay a fine in an amount equal to the value of that property . . .”.  The words are crystal clear.  Parliament has itself determined the amount of the fine.

35                               The fine, as that provision says, is equal to the value of the property.  Further, equivalency between the value of the property and the amount of the fine is inherent in the words “instead of”.  The fine takes the place of forfeiture.  For the substitution to be genuine, the value must be equal.  The court’s discretion applies both to the decision whether or not to impose a fine and to the determination of the value of the property.  It must be exercised in light of the evidence, and once this process has been completed, the court may not take the offender’s ability to pay into consideration as a basis for deciding either to impose no fine or to reduce the amount of the fine.

36                               Where, as in the instant case, a lengthy term of imprisonment is imposed, the impecuniosity of an offender may make it more difficult for him or her to pay the fine.  However, the objective of deterrence pursued in Part XII.2 requires the court to look beyond the offender him or herself.  Reducing the fine because of inability to pay is difficult to reconcile with the general objective of deterrence.  Other provisions of the Criminal Code  are not rendered inapplicable by Part XII.2 and may be applied if need be.  I will discuss those provisions below.

37                               Given the clear objective, the fact that the words are equally clear, and the counter‑productive effects of taking ability to pay into consideration, I conclude that the court may not take ability to pay into account in determining the amount of the fine to be imposed instead of forfeiture.

38                               An analysis of the broader context of the rules on sentencing leads to the same conclusion.

2.3    Broad Context of the Rules on Sentencing

39                               I stated earlier that the provisions relating to the proceeds of crime are in addition to the other provisions of the Criminal Code  and that forfeiture, or the fine instead of forfeiture, is imposed in addition to the sentence for the commission of the designated offence.  Where the general rules set out in the Criminal Code  are compatible with the specific provisions, they are applicable as well.

40                               As part of the sentencing reform of 1996, Parliament required judges to take the ability of the accused to pay into account when imposing a fine: S.C. 1995, c. 22, s. 6.  Not long after that reform, on May 20, 1998, the Quebec Court of Appeal decided Savard, in which it held that the imposition of a fine instead of forfeiture was subject to the ability to pay (at p. 568):

[translation]  I consider that Parliament used the word “may” in s‑s. (3) of s. 462.37, because it wanted the court to give full effect to s‑s. (2) of s. 734, which provides that the court may only impose a fine where it is satisfied that the offender is able to pay the fine or discharge it under s. 736.

Parliament did not accept that interpretation, and the following amendment was proposed (S.C. 1999, c. 5, s. 33(1)):

734. . . .

(2)    Except when the punishment for an offence includes a minimum fine or a fine is imposed in lieu of a forfeiture order, a court may fine an offender under this section only if the court is satisfied that the offender is able to pay the fine or discharge it under section 736.

When the bill was moved for third reading, the parliamentary secretary to the Minister of Justice and Attorney General of Canada described the content of the amendments to the House of Commons (House of Commons Debates, vol. 135, 1st Sess., 36th Parl., November 4, 1998, at p. 9840):

The bill also contains a series of sentencing reforms.  As with other amendments, the purpose is not to make fundamental changes to sentencing policy but to address certain specific concerns that have arisen with the sentencing reform bill, Bill C‑41, which took effect in late 1996.

Bill C‑41 created a number of general rules dealing with fines, conditional sentences and other measures.  The application of the new general rules to specific provisions of the Criminal Code  and other acts have had to be reconciled or adjusted in some cases as we begin to see how the various provisions are being applied by the courts.  It is too early to consider any fundamental changes to the sentencing provisions but there are a number of areas that warrant refinement in our opinion.

For example the legislation will clarify the relationship between the new general rules governing fines and other specific punishments in the Criminal Code  and other statutes.  There has been some question about whether the fine provisions would have priority over punishment rules for specific offences.  The proposed amendments will ensure that a specific fine imposed pursuant to a specific offence provision has priority over the general rules.  [Emphasis added.]

41                               Comments made during the debate on a bill must of course be treated with caution.  Sometimes, they represent no more than the opinion of the person who made them, and that opinion was not necessarily determinative of how members voted.  The final text is the one that is submitted for consideration by the courts, which attempt to give it meaning by applying the rules of interpretation.  Statements made during a debate are therefore merely one interpretative tool among many others.  The weakness of such evidence is illustrated by the fact that one witness who testified before the legislative committee considering the proceeds of crime bill expressed the opinion that it was not necessary to make certain requested amendments because the courts were armed with a broad discretion.  He then said that in his opinion a court could take the offender’s ability to pay into consideration (comments of R. G. Mosley, then Senior General Counsel of the Department of Justice, House of Commons, Minutes of Proceedings and Evidence of the Legislative Committee on Bill C‑61, Issue No. 9, June 1, 1988, at p. 9:27).  In Neves, the judges of the majority and the minority interpreted that testimony in ways that were contradictory.

42                               Nevertheless, I believe that in the case at bar, the chronology of events reinforces the above‑quoted comments made in 1998 when the amendment to s. 734(2) was proposed.  Those comments were made only a few months after May 20, 1998, when the Quebec Court of Appeal had delivered its decision in Savard.  They make it clear that Parliament did not intend to have the general rules apply notwithstanding the specific rules.  Rather, it intended that the specific provisions, in this case the determination of the amount of the fine on the basis of the value of the property, would prevail over the general provisions.  To read s. 734(2) narrowly and to find that the court is neither required to take ability to pay into consideration nor prevented from doing so disregards both the words of s. 462.37(3) Cr. C. and the comments made at the time of the amendment of s. 734(2), which clearly preclude consideration of the ability to pay.

43                               In s. 787 Cr. C., Parliament used the expression “fine of not more than”.  Thus, that section clearly grants the judge a discretion to adjust the amount of the fine downward, based on the general criteria for individualizing sentences.  In the case of s. 462.37(3), however, Parliament has provided that the fine must be “equal to the value of that property”.  These words are not open to interpretation.

44                               In their ordinary sense, the words used in s. 462.37(3) mean that the judge must determine the value of the property and impose a fine equal to that value.  When considered in conjunction with the general sentencing provisions, and in particular with s. 734(2), they must be interpreted as precluding consideration of the ability to pay.  When considered in the context of the objective of deterrence and the intention to deprive offenders and criminal organizations of the proceeds of their crimes, s. 462.37(3) also precludes any decision based on the offender’s ability to pay.  In short, the judge has a discretion that is limited both by the words of the provision and by its context.

3.     Time Limit for Payment and Issuance of Warrant of Committal

45                               The time allowed for paying the fine and the conditions applicable to the issuance of a warrant of committal are not addressed in Part XII.2.  The common law principles and the general sentencing provisions therefore apply on a suppletive basis.

46                               In R. v. Wu, [2003] 3 S.C.R. 530, 2003 SCC 73, at para. 31, the Court considered the terms of payment of a minimum fine.  A fine that must be equivalent to the value of the property it represents is analogous to a minimum fine, except that it is even more restrictive.  There can be no variation in the amount of the fine, which is not only a minimum, but also a maximum.

47                               In Wu, the Court reviewed a few principles recognized by the common law, including the following:  (1) “[i]f it is clear that the offender does not have the means to pay immediately, he or she should be given time to pay”, and (2) “[t]he time should be what is reasonable in all the circumstances” (para. 31).  These general principles apply with equal force to a fine instead of forfeiture.  While the court that imposes the fine has no discretion to vary the amount of the fine based on ability to pay, the ability to pay may nonetheless be taken into consideration in determining the time limit for payment.  In addition, under s. 734.7(1)(b) Cr. C., when the time allowed for payment of the fine instead of forfeiture has expired, the court asked to issue a warrant of committal may not do so unless it is satisfied that the offender has, without reasonable excuse, refused to pay the fine.  According to Wu, failure to pay because of poverty cannot be equated to refusal to pay.  The same factors do not apply at the various stages — the decision to impose the fine, the determination of the value of the property and the setting of a time limit — and these stages must not be confused.

48                               Accordingly, while ability to pay may not be taken into consideration by the court either in deciding to impose a fine instead of forfeiture or in determining the amount of the fine, it nonetheless comes into play at later stages that are not affected by the specific provisions relating to the proceeds of crime.

4.      Application to the Facts

49                               The trial judge clearly believed that the instant case was one in which deterrence was of particular importance:

[translation]  In light of the cases cited above, and based on the trend in the contemporary case law in cases of this nature involving a highly structured organization, it appears that the criteria of deterrence and denunciation are of particular importance.  [para. 33]

50                               He also concluded that the respondent had received the proceeds of his crime and had squandered part of them:

[translation]  The accused received substantial sums of money, but the evidence does not show that he still has all that money in his possession.  He has certainly squandered a large part of it on gifts, presents and a variety of purchases.  [para. 53]

51                               It cannot be concluded from these circumstances that it was open to the judge not to impose a fine instead of forfeiture.  Because he had determined the value of the proceeds of the crime to be $150,000, he should have imposed a fine in that amount.

5.      Conclusion

52                               The provisions relating to proceeds of crime are specific rules that partially preclude the application of the general rules on sentencing.  Taking ability to pay into consideration is not compatible with the objectives of the provisions at either the stage when the decision to impose a fine instead of forfeiture is made or the stage when the amount of the fine is determined.  However, the court must have regard to the ability to pay when determining the time limit for paying it.

53                               In the case at bar, the trial judge allowed 12 months to pay the fine of $20,000 that he had imposed.  The determination of the time limit is based on the offender’s particular circumstances.  No submissions were made to the Court concerning time for payment or the term of imprisonment that would apply in the event of a failure to pay the fine.  The case must therefore be remanded to the trial court to determine those times.

54                               For these reasons, I would allow the appeal, set aside the orders of the Court of Appeal and the Court of Québec as regards the fine, and sentence the respondent to pay a fine of $150,000 instead of forfeiture, and I would remand the case to the Court of Québec to determine the time limit for payment and the term of imprisonment that will apply in the event of a failure to pay the fine.

Appeal allowed.

Solicitor for the appellant:  Attorney General of Canada, Montréal.

Solicitors appointed by the Court as amicus curiae:  Desrosiers, Turcotte, Massicotte, Montréal.