As securities regulators grapple with the challenge of returning money to harmed investors, new data from Statistics Canada reveals that courts are making relatively little use of restitution orders in criminal cases.
Last year, both the Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization (CIRO) tabled proposals for mechanisms that would facilitate the return of money — paid in disgorgement as part of regulatory enforcement — to harmed investors.
The OSC’s proposal remains under consideration, and the consultation on CIRO’s proposal runs until Jan. 20.
In the meantime, new data from StatCan highlights the lack of restitution being ordered in criminal cases.
In mid-2015, new legislation, known as the Canadian Victims Bill of Rights (CVBR), was adopted, which grants certain rights to crime victims, “including the right to have the court consider issuing a restitution order against the offender,” the national statistical agency noted.
Yet, despite this effort to make financial compensation to victims a bigger feature of the justice system, there’s been no increase in the use of court’s restitution powers, StatCan found.
In fact, StatCan reported that, in the four years before the CVBR was adopted, about 5% of criminal convictions included restitution orders. This frequency didn’t change in the four-year period following its implementation, and it actually slipped to 4% in the April 2019 to March 2023 period.
While restitution was rarely ordered for most sorts of crimes, offenders were sentenced to pay restitution in 16% of cases where a property crime was the most serious offence, StatCan said.
And, among property crimes, fraudsters were most frequently ordered to pay restitution, it noted, with 24% of cases that included at least one charge of fraud resulting in a restitution order.
Yet, even for fraud, courts haven’t embraced restitution as a remedy.
According to the data, before the CVBR was implemented, 28% of fraud convictions received a sentence that included a restitution order. This declined to 23% in the four years after the new bill, and to 19% in the 2019 to 2023 period.
And, when restitution is ordered, the amounts are typically small.
“Based on the information from four provinces reporting the amount of restitution ordered, close to half (48%) of the restitution orders imposed… [between 2015 and 2019] were for less than $500,” StatCan reported.
The agency noted that the use of other sorts of monetary sanctions has also declined in recent years.
Between 2011 and early 2019, fines were ordered in 31% of criminal convictions, but this dropped to 23% for the period April 2020 to March 2023.
The use of victim surcharges in cases where fines are imposed has dropped too. StatCan reported that since the introduction of legislation in mid-2019, which re-introduced judicial discretion to waive victim surcharges, the prevalence of these orders fell from 89% of cases to 32%.