Federal Victim Surcharge in New Brunswick: An Operational Review

1. Introduction

1. Introduction

A surcharge is a monetary penalty imposed on offenders at the time of sentencing. The monies collected by the provincial and territorial governments are used to provide various support services for victims of crime within their jurisdictions. To date there has been a gross shortfall in the anticipated federal victim surcharge revenue for New Brunswick as is the case in most provinces (Li, 2005). This trend of not maximizing the projected revenues has remained stable even after an amendment in 1999 that rendered the imposition of the federal victim surcharge automatic unless waived by the court. This report will attempt to unearth contributing factors and possible solutions to this situation.

1.1. Background

1.1.1. Victims in Canada

A victim of crime in Canada is defined for the purposes of the Victim Impact Statement provisions in the Criminal Code in section 722:

Additionally, section 2 of the Criminal Code contains a general definition specifying that the term “victim” includes the victim of an alleged offence. Most provinces and territories also have their own victims’ legislation. In New Brunswick, Regulation 91-67 under the Victims Services Act, Chapter V-2.1, 1987, defines a victim in section 2.2(b) as:

  1. a person against whom an offence is committed in New Brunswick;
  2. with respect to a person who is ill or incapacitated and against whom an offence is committed in New Brunswick, anyone who acts on behalf of the person and who has in law or fact custody or is responsible for the care or support of the person;
  3. the parent or guardian acting on behalf of a minor against whom an offence is committed in New Brunswick; or
  4. the spouse, common-law partner, child, parent or guardian of a person against whom an offence is committed in New Brunswick.

The history of victim services in Canada has been relatively short. Alberta was the first province to set up a Criminal Injuries Compensation Program in 1969. New Brunswick followed suit by instituting their Crime Compensation Program in 1971 offering innocent victims of crime direct compensation for harm inflicted. In 1983, Justice Canada funded two pilot projects in two sites, Saint John and Campbellton (English and bilingual), New Brunswick, where the current staff-based system government service delivery model was implemented to provide a range of victim services to victims of crime coming to the attention of the criminal justice system. In 1988, the decision was then made by the Government of New Brunswick to implement victim services throughout the province, hiring staff with the same classification as probation officers with respect to salaries, union classification and qualifications required. While victims’ advocacy groups have been garnering increased attention in the media and political circles, and the profile of victims of crime continues to rise, New Brunswick has consistently recognized the need for equity in the delivery of victim and offender services in the province. Today, there is a victim services component within the criminal justice system in each province and territory within Canada and the Policy Centre for Victim Issues has been established in Justice Canada (established in 2000). In many provinces, such as New Brunswick, the funding for victim services comes from a single source – the revenue generated by federal and provincial victim surcharges. There are many different service delivery models throughout Canada for the delivery of victim services. All Atlantic Provinces have a staff system-based victim services delivery model as part of an overall government program. New Brunswick is one of the few provinces in Canada where probation officers, child protection workers, social workers and victim services coordinators have equivalent position classifications in government.

1.1.2. Federal Victim Surcharge

The federal victim surcharge provisions of the Criminal Code were first enacted in 1988, proclaimed in July 1989, with amendments in 1999. It is an imposed payment on an offender who is convicted of any Criminal Code offence, or a Controlled Drugs and Substances Act offence involving controlled or restricted drugs, as well as individuals who received an absolute or conditional discharge. The original Criminal Code provision set an upper limit on the amount of the surcharge, but the real limits were set in regulations. This approach was intended to permit the maximum amount to be raised over time.  Note that the original intent of the surcharge was its inclusion as a part of the sentence and was not to be characterized as a “tax” or levy to simply raise revenue.

The original legislation required an offender to pay a surcharge of an amount not exceeding:

The regulations prescribed $35 as the “lesser amount” for non-fine offences. As a result of the combined effect of the regulations and the Code provisions, the surcharge was an amount up to 15% for fines and up to $35 for other dispositions, with judges maintaining discretion on whether or not to impose any surcharge. These regulations, which were not set out in the Code, lead to a great deal of confusion and inconsistent practices surrounding the applicable amounts. In addition, the prescription of a maximum amount permitted judges to impose a lower surcharge and still comply with the legislation – but defeat the goals of the surcharge, i.e., to make offenders in a small way accountable to victims in general and to generate revenue for victim services.

At the same time that the federal victim surcharge was implemented in 1989, federal/provincial cost sharing programs for provincial victim crime compensation programs were eliminated. This was because the federal government anticipated that the federal victim surcharge would provide additional funding per capita not only for crime compensation but for other criminal justice victim services. Because these revenues were not realized as anticipated, a number of provinces eliminated or significantly revised crime compensation programs.

The provinces’ experience with the 1989 surcharge provisions quickly led to calls for reform. Within a few years after enactment, provinces and territories noted the need to revise the Criminal Code victim fine surcharge provision to address concerns regarding its implementation and revenue raising capacity.

Research conducted by Justice Canada consultants in the early 1990’s[1] revealed that in many cases the imposition of the surcharge was ignored or forgotten, particularly where the disposition was other than a fine. In situations where a jail term was imposed, judges often relied on the undue hardship provision to waive imposition. In addition, the imposition of the $35 surcharge where a term of imprisonment (or other non-fine disposition) was imposed was criticized as disproportionate to the gravity of the offence. Other reasons cited explaining the lack of acceptance of the surcharge included the perception that surcharge revenue would be deposited into general revenues with no guarantee that existing services for victims would be expanded or new services developed. At that time the low revenue from the federal surcharge was attributed to several factors including lack of awareness, concerns regarding the use of surcharge revenue and the restrictions on the maximum limits.

Despite the lower than anticipated revenues, provinces did not initially recommend increased amounts due to the fact that awareness and acceptance of the surcharge was improving and changes to the amounts could have impeded progress. No consensus on this issue was reached until December 1997, when Provincial and Territorial Ministers of Justice urged the federal Minister of Justice to proceed with revisions to the surcharge scheme.

The Federal Provincial Territorial Working Group (FPTWG) on Victims of Crime proposed that s. 737 of the Code be amended to provide that:

In 1998, the Standing Committee on Justice and Human Rights tabled its report following its review of the victim’s role in the criminal justice system; Victims’Rights - a Voice Not a Veto. The Committee noted the problems with the original surcharge provisions, including judges’ inadvertent failure to impose the surcharge and non-aggressive enforcement and collection initiatives by pertinent departments.

The report affirmed that additional resources were needed to provide adequate victim services across the country and that increasing the victim surcharge would be a reasonable way to generate more revenue, particularly given that the maximum surcharge amounts had not increased since 1989.

The Government’s Response (December 1998) noted that the recommendations of the FPTWG and those of the FPT Attorneys General were consistent with those of the Committee. The Response included a commitment by the Minister of Justice to pursue Criminal Code amendments to revise the amount of the minimum surcharge and to provide for automatic imposition while preserving the undue hardship exemption and providing adequate notice to the accused. The Government’s Response also encouraged that a federal victim’s office be established that could work in collaboration with the provinces and territories, to among other things, explore effective enforcement mechanisms to ensure that funding would be available to the provinces and territories for their victims' services. The Policy Centre for Victim Issues (PCVI) was established in 2000 as a response to this recommendation. Criminal Code amendments to address the needs of victims of crime were proclaimed into force in 1999, including new surcharge provisions designed to address the concerns noted. These concerns and subsequent amendments focused on the amount of the minimum surcharge and the possibility to provide for automatic imposition while preserving the undue hardship exemption.

The only exception to the mandatory imposition of this surcharge is when the offender can prove undue hardship (Criminal Code s.737(5)). The surcharge may be waived if the offender establishes undue hardship to either her/himself or his/her dependants as a result of the imposition of the federal victim surcharge. When the court waives a federal victim surcharge, it is required to provide reasons and state them in the record of proceedings (s.737(6)). While there is a Fine Option Program, which is an opportunity for the offender to satisfy fines by means of community work through a formula calculating the number of hours the offender works, the Fines Option Program cannot specifically be used to satisfy a surcharge (s.736 and s.737(10)). Furthermore, section 734.8(5) of the Criminal Code clarifies that where a part payment is made for a fine, the money is applied first to the costs (s.734(5)(a)(i)) second to the surcharge and then to the fine (Section 737).

Similar to the federal victim surcharge, there is a provincial victim surcharge in New Brunswick as set out in section 3 of Regulation 91-67 of the New Brunswick Victims Services Act:

A surcharge for the purpose of subsection 18(2) of the Act is as follows:

  1. an amount equal to twenty per cent of any fine or money penalty imposed where a person is convicted of an offence under any Act of the Legislature or any regulation under such Act;
  2. an amount equal to twenty per cent of any payment made under any Act of the Legislature or any regulation under such Act, on which payment the person is deemed to have been convicted of an offence; or
  3. an amount equal to twenty per cent of any fine or money penalty described in paragraphs 14(5)(a) and (b) of the Provincial Offences Procedure Act where a person makes a payment in accordance with subsection 14(1) or (2) of that Act in respect of an offence charged in a ticket served on the person under that Act.

The primary difference between the provincial victim surcharge and the federal victim surcharge is that the provincial surcharge is mandatory and always applied, while judges can per s.737(5) waive the federal surcharge. It should be noted that the provincial victim surcharge is the primary source of funding for Victim Services in New Brunswick. The federal victim surcharge is the other source of funds. Approximately $1.1 million is realized annually from the provincial victim surcharge where the federal surcharge has remained constant at $250,000. This is similar in other jurisdictions and was one of the issues raised by Manitoba at the Federal/Provincial/Territorial Ministers meeting in 2005 that resulted in this study. Non-criminal surcharge revenue (PVS) is being used to fund crime victim services.

1.1.3. The New Brunswick Federal Victim Surcharge Experience

The underlying philosophy of the federal victim surcharge rests in s.737(7) of the Criminal Code which states that the surcharge is imposed for the purpose of providing a concrete means of assisting victims of crime with a broad range of services. To this end, New Brunswick, like all provinces, has established a special purpose account under the New Brunswick Victims Services Act for the sole purpose of Victim Services to distribute the federal and provincial victim surcharges revenue thereby providing services to victims of crime in the province where the federal victim surcharge is collected.

The benefit of this designation is that the fund is a protected entity not subject to the typical budgetary fluctuations that occur with differing governing priorities. Thus, the money cannot be funnelled towards competing government priorities and can only be used to fund victim services. The drawback of this special designation is that the account cannot run a deficit from year-to-year. This potentially jeopardizes victim services, which is heavily dependent on victim surcharge revenue from the previous fiscal year. In short, less monies generated by the victim surcharge regime translates into fewer services for victims of crime in the province.

Currently, Victim Services NB has an annual operating budget of $1.4 million for victim service programs. These programs provide victims of crime with: information on the criminal justice system and court processes, referrals for counselling to assist in dealing with the trauma of being victimized, court preparation, court support for vulnerable persons, assistance in preparing victim impact statements, victim notification of offender release from provincial institutions, victim notification of reviews and outcomes in cases where the accused has been found not criminally responsible and compensation programs for victims of crime. Additional services will be implemented in 2005/06 as the province is implementing a Domestic Violence Criminal Court and a dedicated victim services coordinator will be assigned to work in this specialized court.

The surcharge collection in New Brunswick has remained at approximately $250,000 annually since the early 1990’s even though amendments to increase the surcharge were passed in 1999, leading to the study question as to why revenue has not increased. These services are directly and adversely affected when a systematic shortfall in federal victim surcharge revenue continues to occur. At present the federal victim surcharge only contributes 17% to total expenditures by NB Victim Services. Table A below presents actual and potential federal victim fine surcharge revenues for 2001/2002.

Table A - Actual Versus Potential Victim Fine Surcharge Revenues, 2001/2002*
  Actual Revenues* Potential Revenues Difference between Actual and Potential Revenue
Prince Edward Island $48,313 $84,628 $36,315
New Brunswick $266,000 $415,927 $149,927
Newfoundland and Labrador $141,394 $214,697 $73,303
Quebec $2,234,606 $1,396,300 -$838,306
Ontario $1,237,323 $6,647,395 $5,410,072
Alberta $1,137,000 $1,836,991 $699,991
British Columbia $612,000 $1,964,039 $1,352,039
Northwest Territories $35,741 $43,403 $7,562

*Figures represent actual federal surcharge revenue received from 8 jurisdictions for 2001/2002. Some jurisdictions cannot separate out provincial and federal surcharge revenue and so figures for these jurisdictions are not included.

Figures are based on a table "Potential Surcharge Revenues" developed by the Research and Statistics Division where the surcharge is 15% of the fine amount (as in the current provisions). Please see the table in the appendix for an explanation of how potential surcharge revenues were generated.

Prepared by the Research and Statistics Division and the Policy Centre for Victim Issues

1.2. Purpose

The objective of this research project is to develop a better understanding of the challenges and possible solutions to those challenges of the federal victim surcharge regime. The New Brunswick Provincial Court System was selected as the site for this review. Some of the challenges that have been documented in the past include: waivers by judges on a mere assertion of inability to pay; disposition records that do not refer to the surcharge, even though it is required to be paid; default and ineffective enforcement. Since the introduction of the federal victim surcharge in 1989, and moreover since the automatic imposition (subject to waiver) of the surcharge regime in 1999, the process has consistently recovered only a portion of its anticipated revenue. This estimated shortfall has been noted in jurisdictions across the country and is based on conviction rates provided by the Research and Statistics Division of Justice Canada (Li, 2005). The question is whether or not this lack of revenue is due to the federal victim surcharge being waived or whether the problem is primarily due to the collection process. If the problem of low revenue is embedded in the imposition and/or the waiver process of the federal victim surcharge, there is also the question of whether this is due to courts waiving the federal victim surcharge on a per individual case basis or whether this is due to local court-based practices of systematically not imposing the federal victim surcharge, i.e., blanket non-imposition.

The impetus of this study began with the Attorney General of Manitoba proposing to Federal Provincial and Territorial (FPT) Ministers Responsible for Justice that, as a symbolic measure where most victim surcharge revenue is raised through provincial surcharges on victimless violations not federal, the amount of the victim surcharge in the Criminal Code be increased from 15% on fines to 20% (January 2005). Ministers agreed to refer this issue to the FPT Working Group on Victims of Crime for consideration. The Working Group was tasked with undertaking additional research and exploring options for increasing federal surcharge revenues and asked to report to FPT Deputy Ministers. In response to this, the Deputy Minister of Justice for New Brunswick offered New Brunswick as a pilot site for any research on the surcharge. The results of the study will provide the foundation for discussions on the effectiveness of the surcharge provisions.

The present review focuses on a three-fold mandate: What is the documentation, imposition and collection process of the federal victim surcharge in New Brunswick? The seven primary research questions are:

  1. Does New Brunswick assume automatic imposition unless waived by the judge and so are court forms developed in this way?
  2. Are policy directives in place related to court administration of automatic imposition and are those directives being followed?
  3. What are the enforcement strategies in place in New Brunswick and what if any are the consequences of non-compliance?
  4. Is the default formula in the Criminal Code meaningful for collection and is it a meaningful consequence?
  5. What other options could be considered for collection and what are any impediments that would need to be overcome jurisdictionally to implement options other than default time as a penalty?
  6. What are the rates of imposition and compliance in New Brunswick?
  7. Why has the anticipated revenue to be generated in New Brunswick from the 1999 amendments to the Criminal Code provisions related to surcharge not been realized?

[1] Two studies were undertaken to review the impact of the new provisions, one in British Columbia and one in Ontario. The first was entitled, An Assessment of Victim Fine Surcharge in British Columbia, by Tim Roberts (1992). There were two types of analysis conducted in this study: i) an implementation analysis, which examined the degree to which and the geographical consistency with which the victim surcharge provisions were implemented in BC and the procedures involved in the process; and ii), an analysis of issues which have arisen in regard to particular types of cases and in regard to the implementation of victim surcharges.

Two primary methods were used: a survey of key justice system informants in 4 major locations, and to a lesser degree in 21 other sites; and, a file review of the use of victim surcharges in 1,195 completed cases with convictions.

Three themes emerged from the study findings

  1. There is considerable variability in the frequency of the imposition of the surcharge in BC.
  2. There is resistance by judges to the imposition of the victim surcharge.
  3. There is a lack of implementation of surcharges on non-fine dispositions.

The second study was entitled, Helping Victims through Fine Surcharges, by Lee Axon and Bob Hann (1994). This study examined Ontario’s experience with the surcharge and also reviewed practices in other jurisdictions. Findings from the study included:

  1. In Ontario, the revenue generated by the surcharge declined dramatically since the initial introduction in 1989 because it was being applied with less frequency.
  2. Only about 15% of the potential (allowing for undue hardship at 33% and default at 45%) was imposed in 1992 and only 2.7% actually collected.
  3. More than 80% of all surcharges were imposed on “victimless” crimes (impaired driving, morals offences, wilful damage).
  4. The major reason for the low rates of imposition of the surcharge in Ontario is judicial concern that the revenue is not being used to provide services for crime victims. Revenue was being deposited in the province’s Consolidated Revenue Fund. Three quarters of the judges responded that if the revenue were directed towards victim services, they would be more likely to impose the surcharge. Crown expressed similar views. Defence were almost unanimously opposed to the surcharge.
  5. In other jurisdictions, the study found that: there is widespread dissatisfaction with the regulated $35 maximum for non-fine dispositions; little attention has been given to informing offenders about the purpose of the surcharge; judges are more likely to impose the surcharge on fines than on non-fine dispositions; the surcharge has been most successful in those jurisdictions that have kept judges informed about how the revenue is being used; and most jurisdictions have developed a designated fund for the revenue.

There was no research conducted following the 1999 amendments.