Administrative monetary penalties, or AMPs, have become an increasingly important enforcement tool in the Canadian regulatory landscape. They are embedded in a wide range of federal and provincial statutes spanning numerous regulated activities and industries. They provide for financial sanctions for breaches of statute or regulation imposed as a remedy following an enforcement action. In principle, their objective is to promote compliance and deter individuals or businesses from contravening the law.
As the use of AMPs has expanded, some AMP regimes have been amended to reflect very high ceilings for the amount that can be ordered against a regulated party. Under the Competition Act,1 the Competition Tribunal may order maximum penalties for certain types of reviewable conduct in an amount up to three times the value of the benefit derived from the conduct, or if that amount cannot be reasonably determined, 3% of a corporation’s worldwide gross revenues. For multinationals and global enterprises, the potential exposure can be extremely large. The threat of substantial penalties has sparked renewed debate about whether their magnitude brings them into the realm of “criminal” or “penal” sanctions, such that Charter protections ought to apply.
The Wigglesworth Test – When are Charter protections triggered?
Under Canadian law, a party targeted by the state in a penal or criminal proceeding will be afforded significantly greater procedural and substantive rights than a party subject to a regulatory enforcement action. The added protections in a penal or criminal process include the Charter right against unreasonable search and seizure (s. 8), the presumption of innocence, the right to be found liable on a standard of proof beyond a reasonable doubt (s. 11(d)), and the right not to be prosecuted based on retroactive changes to the law (ss. 11(g) and (i)).
In R v. Wigglesworth, the Supreme Court of Canada established the principle that a regulatory proceeding may be characterized as criminal where it is penal “by its very nature” or “may lead to a penal consequence”.2 Fines or penalties will cross the line and become “true penal consequences … if they are punitive ‘in purpose or effect’”.3 In assessing whether a monetary penalty is punitive, relevant considerations include the magnitude of the penalty, to whom it is paid, whether its magnitude is determined by regulatory considerations rather than traditional principles of criminal sentencing, and whether there is stigma associated with it.4
In simple terms, if a penalty resembles a true penal consequence—either in its purpose or effect—Charter protections under s. 11 and s. 8 will be engaged. Conversely, if the penalty is seen as genuinely administrative and compliance‑oriented, the Charter will not apply. The Supreme Court’s 2015 decision in Guindon v. Canada confirms that many AMP schemes will not be viewed as criminal in nature because they are designed to secure compliance, not to redress a public wrong, and because their consequences are calibrated to regulatory objectives rather than punishment for its own sake.5 However, the line between compliance and punishment is not always clear.
As the Court explained in Guindon, “[t]he magnitude of the sanction on its own is not determinative.” That said, if the amount at issue is “out of proportion” to the amount required to achieve regulatory purposes, it is likely to constitute a true penal consequence. The Court was careful to note that very large penalties under AMP regimes may be appropriate and necessary to deter non-compliance with an administrative scheme.6
The Competition Act AMP toolkit
Amendments to the Competition Act (the Act) in 2022 and 2023 enacted a suite of higher maximum penalties for certain types of reviewable conduct:
- Abuse of dominance: Where the Commissioner of Competition establishes abuse of a dominant market position or anti-competitive practices, the Tribunal may order AMPs up to the greater of (a) $25 million (for a first order) and $35 million (for subsequent orders) and (b) three times the value of the benefit derived, or, if that amount cannot be reasonably determined, 3% of the regulated party’s annual worldwide gross revenues.7 In deciding the amount of the penalty, the Tribunal will consider a number of factors, including the effects on competition; the gross revenue from sales affected by the practice; any actual or anticipated profits affected by the practice; the financial position of the regulated party; and compliance history.8
- Deceptive marketing practices: AMPs are also available where the Tribunal finds that a regulated party has engaged in deceptive marketing practices by, for example, making representations to the public that are false or misleading in a material respect. For corporations, the maximum AMP is the greater of a fixed dollar amount (up to $10 million, rising to $15 million for subsequent orders) and three times the value of the benefit derived from the deceptive conduct, or, if that amount cannot be reasonably determined, 3% of the corporation’s annual worldwide gross revenues.9 In assessing the penalty, the Tribunal shall take into account the following factors: evidence about the reach, frequency and duration of the conduct; the vulnerability of persons adversely affected; the effect on competition; and the corporation’s financial position and compliance history.10
- Agreements or arrangements that substantially prevent or lessen competition: Similar to the abuse of dominance and deceptive marketing provisions, agreements or arrangements that substantially prevent or lessen competition can result in AMPs of up to 3% of annual worldwide gross revenues.11
For all these AMP provisions, the Act expressly states that the purpose of an order is to promote compliance, not to punish.12 While not determinative, statutory clauses emphasizing “compliance, not punishment” are signals of legislative intent that may influence whether a provision is seen to authorize a true penal consequence.
Google’s constitutional challenge to the Competition Act AMP regime
In November 2024, the Commissioner of Competition commenced an application against Google alleging anti-competitive conduct in online advertising markets under the abuse of dominance provisions.
In May 2025, Google brought a motion before the Competition Tribunal challenging the constitutionality of s. 79(3.1)(b) (the AMP provision for abuse of dominance) on the basis that it authorizes a true penal consequence. Google’s position was that an AMP measured at 3% of its global revenues could amount to $91 billion—“a financial sanction of even a fraction of that amount would be staggering”, far outstripping the total revenues generated from its entire display advertising business in Canada. A fine or penalty of that magnitude would also exceed the cumulative total of all fines for competition offences imposed in the country’s history.
Google’s arguments reflect a basic concern articulated in earlier cases that an AMP regime must not produce or enable penalties that are “out of proportion” to what is required to achieve a valid regulatory purpose. This concern is amplified by the sheer magnitude of a potential order representing 3% of worldwide gross revenues for a large multinational. Google says using worldwide gross revenues to calculate an AMP invites consequences disconnected from a company’s Canadian operations. It risks fines untethered from the effects or benefits relating to reviewable conduct in Canada.
Google’s core assertion is that a provision that, on its face, authorizes such extreme consequences must be constitutionally offside. The Tribunal’s discretion or a “compliance, not punishment” clause cannot cure such a provision. Google also stresses the reputational stigma attached to a sanction that it says would effectively mirror a criminal fine.
Given its position that the Act authorizes a true penal consequence, Google submits that it ought to have had the benefit of s. 11 Charter protections (the presumption of innocence, proof beyond a reasonable doubt, non‑retroactivity). It also alleges a breach of s. 8 of the Charter arising out of the Commissioner’s compelled production of Google’s internal records during its investigation.
The Commissioner’s response is that the Act expressly states that the purpose of an AMP order is to promote compliance, not to punish. This, in its view, is a substantive limit: the Tribunal lacks jurisdiction to order any AMP that is punitive in purpose or effect. Therefore, properly construed, the AMP regime does not give rise to a true penal consequence.
The Commissioner stresses that the magnitude of a potential fine is not, in itself, determinative; high AMPs may be necessary to ensure that penalties are not treated by regulated parties as simply “a cost of doing business.” It says the amount of an AMP must be established based on a range of factors, including a company’s gains, the effects on competition, and ability to pay. In that respect, 3% of worldwide gross revenues is a ceiling, not a formula, and the Tribunal has the discretion to anchor any AMP to Canadian effects and benefits.
Legal implications and takeaways
Google’s motion was heard by the Tribunal in September 2025. The decision is currently under reserve.
There is little doubt that, on the face of the legislation, extreme outcomes that could lead to punitive fines or penalties are possible. A key issue is whether the prospect of such outcomes is sufficient to invalidate the scheme as a whole. In other contexts, the Supreme Court has held that provisions that pose the threat of unconstitutional outcomes cannot be salvaged by a case-by-case exercise of discretion.13
The analysis will likely turn on whether the Tribunal accepts that the AMP regime under the Act provides reasonable safeguards to protect against extreme—and punitive—outcomes. It will test the Commissioner’s argument that the regime effectively constrains the jurisdiction to impose disproportionate penalties on regulated parties by virtue of the factors to be considered, as well as the statutory requirement that the purpose of an AMP order is to promote compliance, not to punish.
The outcome of the Google case could have significant implications for AMP regimes across the country. If Google is successful, it will likely prompt additional challenges and require legislatures to craft more tailored provisions with lower maximum penalties.
However, even if the regime is upheld, the decision will likely invite more rigorous scrutiny of AMPs. For regulated parties, detailed economic evidence of actual benefits or effects from any alleged reviewable conduct will be a critical component to any defence. Likewise, regulators will have to “show their work” to satisfy decision-makers that the AMP being sought is carefully calibrated to compliance objectives, anchored in relevant factors. Finally, in the exercise of their remedial discretion, decision-makers will need to ensure any AMPs do not cross the line into punitive sanctions. As the scope of permissible AMPs are demarcated in the case law, extreme or even borderline cases will attract greater appellate review.
1 R.S.C., 1985, c. C-34 [Competition Act].
2 R v. Wigglesworth, [1987] 2 SCR 541, at para. 30.
3 John Howard Society of Saskatchewan v. Saskatchewan (Attorney General), 2025 SCC 6, at paras. 30, 47, 50 [JHS]; Guindon v. Canada, 2015 SCC 41, at para. 76 [Guindon].
4 Guindon, at paras. 50, 75-76.
5 Guindon, at paras. 87, 108.
6 Guindon, at paras. 76-77, 108.
7 Competition Act, s. 79(3.1).
8 Competition Act, s. 79(3.2).
9 Competition Act, s. 74.1(1)(c)(ii).
10 Competition Act, s. 74.1(5).
11 Competition Act, s. 90.1(1.3).
12 Competition Act, ss. 74.1(4), 79(3.3) and 90.1(1.5).
13 R v. Nur, 2015 SCC 15, at paras. 90-95.
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Zain Naqi acts in complex, high-profile cases with extensive experience in corporate/commercial disputes, shareholder litigation, negligence and tort claims, regulatory prosecutions, and appellate work. He has developed expertise in highly regulated industries, including telecommunications, infrastructure, health care, financial services, and transportation. He also maintains a robust public law and pro bono practice, helping clients on challenging administrative and constitutional law issues. Zain is active in the legal community and a member of the Civil Rules Review Working Group, tasked with recommending reforms to the civil justice system in Ontario.