Transport Canada Roadmap Provides Direction on Consent Agreements
Transport Canada Roadmap Provides Direction on Consent Agreements
Transport Canada recently released guidance on the use and development of consent agreements to resolve contraventions (or perceived contraventions) of the Motor Vehicle Safety Act (the “Act” or the “MVSA”) and related regulations.[1] This guidance comes after consent agreements were added as an enforcement mechanism under the Act in 2018.[2]
The Minister of Transport (“Minister”) may use consent agreements as an alternative to pursing prosecution or issuing an administrative monetary penalty (not yet in force) when a person or company contravenes the Act or its regulations. However, such agreements are not a guaranteed remedy. Rather, the Minister has the discretion to decide in each case whether a consent agreement is appropriate. Relevant factors include whether the entity acknowledges that they have contravened the Act, whether a consent agreement will bring the entity into compliance faster than using another enforcement mechanism, and whether the consent agreement will reduce the chance that the entity will reoffend.
By entering into a consent agreement, Transport Canada and the other party agree to specific terms and conditions that remedy a contravention or perceived contravention of the Act. Such terms and conditions may include financial penalties, reporting obligations and a requirement that the entity take certain steps to correct non-compliance (such as changes to a company’s safety culture). Importantly, after the entity and Transport Canada decide on the terms, the consent agreement is registered with the Federal Court of Canada. Breaches of the consent agreement constitute violations of a court order. This means that the Federal Court has authority to impose further penalties where the contravener does not follow the consent agreement.
Transport Canada’s discretion to use consent agreements reflects a broader trend of Canadian authorities being empowered to use flexible compliance and enforcement tools such as remediation agreements. Remediation agreements (also known as deferred prosecution agreements) allow the Crown to use an alternative to prosecution as an enforcement mechanism to combat corporate crime (see our related bulletin series here). Although flexible enforcement mechanisms are becoming more readily available to regulators, whether they will be regularly exercised by Transport Canada with respect to the MVSA is not yet clear.
by Timothy Cullen, Chris Kalantzis and Ricki-Lee Williams (Articling Student)
[1] Transport Canada: Establishing a consent agreement under the Motor Vehicle Safety Act.
[2] See our prior bulletin on amendments to the MVSA here.
A Cautionary Note
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2021
Insights (5 Posts)View More
Canada’s Anti-Money Laundering and Sanctions Overhaul Gets Serious: New Players, More Rules and Broad Reports
Canada’s Anti-Money Laundering Overhaul Gets Serious: New Players, More Rules and Broad Reports
Alert for Advisers: What Registered Advisers Need to Know About “National Instrument 93-101 – Derivatives: Business Conduct”
NI 93-101 - Derivatives: Business Conduct establishes a comprehensive framework for the conduct of dealers and advisers in the OTC derivatives market.
What’s New in the FAQs: Recent Competition Bureau Guidance on the Amendments to Canada’s Competition Act
Commenting on the Competition Bureau's FAQs describing how the Bureau will enforce the amended merger and reviewable conduct provisions of the Competition Act.
Developer-Friendly Changes Proposed for Ontario’s Record of Site Condition Regime
Ontario is proposing to amend its Record of Site Condition legislation to streamline brownfield development and support other development projects.
Buyer’s Remorse: Asset Purchaser Liable for Pre-Closing Employment Liabilities of Vendor
In a recent British Columbia decision, an asset purchaser was held liable for the pre-closing employment-related liabilities of the vendor.
Get updates delivered right to your inbox. You can unsubscribe at any time.