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Draft Administrative Monetary Penalties Policy

Table of Contents

Background

The Agriculture and Agri-Food Administrative Monetary Penalties Act (AAAMP Act) was enacted in 1995 as an alternative to the penal system and as a supplement to existing enforcement measures. The intent of the legislation was to establish a fair and efficient monetary penalty system for the enforcement of certain agri-food lawsFootnote 1 administered by the Canadian Food Inspection Agency (CFIA). Implementation of administrative monetary penalties (AMPs) across the various laws listed in the AAAMP Act was to be phased in over a number of years.

AMPs are one of several enforcement tools available to the CFIA in responding to situations where regulated parties do not comply with regulations. The intent is to discourage non-compliance by creating financial disincentives, which in turn, should result in behaviour changes and improved compliance.

The AAAMP Act provides for the issuance of two types of AMPs: a "notice of violation (NOV) with warning" and a "notice of violation with penalty". As part of the CFIA's overall approach to enforcement, AMPs are intended to be applied within a suite of enforcement responses ranging from sending a letter of non-compliance to prosecution. AMPs may be used as a stand-alone enforcement measure or combined with other enforcement measures to achieve desired compliance.

The AAAMP Act and Agriculture and Agri-Food Administrative Monetary Penalties Regulations (AAAMP Regulations) set a framework for AMPs issued to either individuals or regulated parties engaging in commercial activities that do not comply with regulatory requirements. For example, individuals violating a prohibition of firewood movement order under the Plant Protection Regulations or regulated parties who fail to comply with instructions from an official veterinarian that a food or animal must be condemned or held and segregated under the Meat Inspection Regulations.

Schedule 1 of the AAAMP Regulations sets out each provision for which a violation may result in an AMP and classifies them as minor, serious, or very serious.

Schedules 2 and 3 of the AAAMP Regulations provide for adjustments to penalties for serious and very serious commercial violations based on a scale that decreases or increases the penalties up to 50%. These adjustments are determined based on the total gravity values assigned to three factors: history, intent and harm.

As stipulated in the AAAMP Act, regulated parties issued a NOV with warning may request a review of the facts of the violations before the Minister or the Canada Agricultural Review Tribunal (CART). Regulated parties issued a NOV with penalty have three options available:

  1. Pay the penalty; or
  2. Request to enter into a compliance agreement with the CFIA, the terms of which nullify the penalty, and in its place, agree to spend up to double the penalty amount on corrective actions to ensure future compliance; or
  3. Seek recourse by requesting a review of the facts of the violations before:
    1. The Minister; or
    2. The CART.

Policy Statement

The CFIA will apply AMPs to discourage non-compliance of regulated parties through fair, timely and effective application of financial disincentives within the Agency's graduated enforcement approach.

Objectives

This policy will guide:

  1. Consistency and coherence in the use of AMPs within the overall program design of AMPs for the CFIA's food, plant and animal health business lines;
  2. Appropriate and effective use of AMPs within the CFIA's graduated enforcement approach; and
  3. Effective management of the AMPs regime.

This policy aligns with the direction and requirements provided in the CFIA Program Policy Management Framework for the management of CFIA program policies, as well as the overarching CFIA compliance and enforcement approach.

Definitions

Binary violation
any violation that is simple (straightforward), unambiguous, clearly understood, and involves a choice or condition of two alternatives (as present-absent or yes-no).
Canada Agricultural Review Tribunal (CART)
an independent, quasi-judicial regulatory appellate tribunal, established in 1983 by the Parliament of Canada, in accordance with Section 4.1 of the Canada Agricultural Products Act. It provides an impartial review of NOVs issued under the AAAMP Act. Members of the public may seek a review of certain agriculture and agri-food violations before the Tribunal.
History, Intent and Harm
the adjustment factors for the calculation of a penalty as set out in Section 6 and in Schedule 3 of the AAAMP Regulations.
NOV with Penalty
a notice of violation issued to a non-compliant regulated party that sets out a penalty, as defined in Section 9 of the AAAMP Act.
NOV with Warning
a notice of violation issued to a non-compliant regulated party that contains a warning, as defined in Section 8 of the AAAMP Act.
Violation
any contravention of an agri-food act or its regulations that may be proceeded with, in accordance with the AAAMP Act.

Scope

This policy applies to the design, delivery and reporting of AMPs for violations identified in the AAAMP Act and Regulations.

Authorities

Authority to issue AMPs is derived from the AAAMP Act and Regulations.

Guiding Principles

The following principles guide the application of AMPs as an enforcement tool:

Fair and Consistent
The application of AMPs is objective, evidence-driven and consistent.

Effective
The CFIA uses AMPs as a graduated and proportionate response to non-compliance. AMPs are considered ineffective when they become a "cost of doing business".

Risk-based
In determining regulatory response, the CFIA undertakes a risk-based approach, which includes the consideration of health, environmental and economic risks.

Timely
AMPs, and reviews of AMPs, are processed according to the established time standards.

Transparent
A transparent approach is taken in making information on AMPs issuance available to the public.

Results-Oriented
The CFIA uses performance measurement information as the basis for determining whether the tool is working to improve compliance.

Right to Recourse
Regulated parties have access to recourse mechanisms or options, as part of the CFIA's commitment to accountability.

Requirements

  1. Provisions to which AMPs are applicable are identified based on compliance objectives and enforcement priorities. Where possible, emphasis is placed on real-time issuance of AMPs for binary violations.
  2. Provisions that are subject to AMPs are clear and unambiguous. If provisions are unclear, guidance is developed to clarify compliance requirements.
  3. Classification levels of AMPs violations (i.e. minor, serious and very serious) are assigned based on the level of risk and severity of consequences.
  4. AMPs are issued on a discretionary and risk-informed basis. When determining whether to issue an notice of violation with warning or with penalty, consideration is given to the proportionality of the warning or penalty amount to the contravention and its likelihood to discourage non-compliance.
  5. AMPs programming (e.g. when to apply AMPs, time standards) is defined clearly through program guidance.
  6. Designated staff are authorized, trained and supported by operational guidance to issue AMPs as intended.
  7. Regulated parties are made aware of the elements of the AMPs regime and the available recourse options.
  8. The non-compliant regulated party is informed of the AMPs violation in a timely manner. Reviews of AMPs are processed within the established time standards.
  9. Information regarding AMPs violations is made available to the public in an unbiased and consistent manner.
  10. The AMPs regime is delivered, managed and documented in a manner that facilitates the completion of efficacy reviews, performance assessments and continuous improvement with the overall enforcement strategy in mind.
  11. Performance of the AMPs regime is measured by appropriate performance indicators in accordance with the CFIA Performance Measurement Framework.

Roles and Responsibilities

The Vice-President of PPB is responsible for reviewing and maintaining this policy to ensure that the AMPs regime is administered as intended. The Vice-President of PPB is responsible for the development of AMPs programming.

The Vice-President of Operations Branch is responsible for the development of operational guidance and delivery of training, and ensuring that the implementation of AMPs programming is consistent across all the CFIA business lines.

Monitoring and Reporting

The policy governing the use of AMPs will be reviewed to evaluate its implementation, its success in achieving its stated objectives, and whether it needs to be updated. The review will take place at least once every five years.

Inquiries

For interpretation, clarification or inquiries regarding this policy please contact:

Program Policy Integration Division
Program, Regulatory & Trade Policy Directorate
Policy and Programs Branch
CFIA-Modernisation-ACIA@inspection.gc.ca

Effective Date

This policy comes into effect on [TBD].

Approval

The Administrative Monetary Penalties Policy has been approved by the Vice-President of the Policy and Programs Branch.

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Signature

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Date

Date modified: