On Wednesday the Supreme Court of Canada will hear a case, 9147-0732 Québec Ltd, that asks, for the first time, whether the Constitution’s guarantee against “cruel and unusual punishment” can extend to legal persons, i.e., corporations. How the court addresses this issue will be consequential. The court will decide whether legal persons — and, through them, their human stakeholders — enjoy the protection of the Canadian Charter of Rights and Freedoms when facing fines or other punishments that are grossly disproportionate and so excessive as to be outrageous.
In 2012, a privately owned Quebec company was issued a fine of $30,834 under the province’s Building Act for carrying out construction work as a contractor without holding the requisite licence for that purpose. The corporation responded by challenging the constitutionality of the fine in court, arguing that it violated the corporation’s right to be protected against “any cruel and unusual treatment or punishment” under Section 12 of the Charter of Rights and Freedoms.
The Court of Appeal of Québec concluded that Section 12 does in fact protect both legal and natural persons. The majority held that, although the right has its roots in the protection of natural persons, its purpose has evolved and its scope should now extend to protect legal persons, as well. Notably, the majority found that nothing in the words of Section 12 indicates its protection should be limited to natural persons.
One judge dissented, however. He concluded that there has to be an infringement of human dignity (“la dignité humaine”) for Section 12 to be engaged. So non-human persons could not claim the section’s protection.
In deciding the case, courts must begin with the language and context of the Charter provision itself. Section 12 provides that “everyone has the right not to be subjected to any cruel and unusual treatment or punishment.” The case thus turns on whether the word “everyone” includes legal persons as well as natural ones.
The Supreme Court has held that “everyone” does include legal persons with respect to: the freedom of expression under Section 2(b) of the Charter; the right against unreasonable searches and seizures in Section 8 (Southam v. Hunter); and the right to be tried within a reasonable time under Section 11(b) (R. v. CIP). It has also held that a corporation may challenge a law as an unreasonable limit on the freedom of religion guaranteed in Section 2(a). Supreme Court jurisprudence also tells us, in R. v. Boudreault, that a punishment in the form of a fine can indeed constitute cruel and unusual punishment. Thus both the text and context of Section 12 do amply support an interpretation that protects legal persons against “cruel and unusual treatment or punishment.”
This is not to say corporate rights operate in the same way as do the rights of natural persons. In many cases, the law correctly treats the rights of natural persons and artificial persons differently. To be sure, an ultimate determination that corporations enjoy rights against cruel and unusual punishment would not imply they enjoy all other Charter rights: it has been previously determined, given the word “life” in Section 7’s guarantee of “life, liberty and security of the person,” that legal persons do not enjoy that right’s protection.
A finding that Section 12 does protect legal persons results from the specific text of that Charter provision, then, and would not invite a broader extension of constitutional protections to legal persons. The creep of corporate personality into our constitutional structure that many American observers feared after the U.S. Supreme Court’s decision granting religious liberty rights to the Hobby Lobby drugstore and free speech rights to Citizens United — and enabling corporations to deny employees coverage of birth control on related grounds — need not be of concern here.
Corporations are structures composed of human stakeholders whose livelihood and liberty are tied up with the ultimate fate of the entity. Imagine a small business is convicted of some form of criminal negligence and a fine is applied that is tantamount to court-sanctioned bankruptcy. That would obviously have bad effects on these individuals. Such draconian punishments may be justified where they are proportionate to the criminal harm caused. But where they are not there is no reason in law or policy that they cannot constitute “cruel and unusual punishment.”
It may be that the threshold for “cruel and unusual punishment” of a corporation is significantly higher, or different, than for humans. Still, the focus of the Charter is on protecting the sphere of human liberty from state intrusion, and this does and should extend to the myriad ways in which human beings associate themselves and organize their affairs, including by forming corporations.
This op-ed originally appeared in the Financial Post.