Can they really send me to jail for selling $30 wipes?

Can they really send me to jail for selling $30 wipes?

Prosecutions for Price Gouging under the EMCPA.

Under the Emergency Management and Civil Protection Act, (the EMCPA) the Provincial Government has the power to make temporary Orders.  These Orders are not criminal law, but they are enforced by police officers, By-Law Officers and Special Constables.  Violations of the Orders can result in fines or even jail.  Today the Legislature meets to extend the state of emergency under the EMCPA to June 2, 2020.  They State of Emergency may be extended further beyond that date.

As the COVID-19 crisis wears on, more businesses may be charged with violating Orders such as “Price Gouging.”  In here you will find the answers to the following:

  1. What Offences are there are for “Price Gouging?”
  2. Police enforcement powers?
  3. Penalties for violating Orders?

If you have been charged with violating an Order, feel free to contact me for a consultation on what possible defences and options you have for fighting the charges.

The May 12, 2020 article in the Toronto Star indicates that:

  • There have been 22,500 complaints of price gouging
  • Consumer protection Ontario has reviewed 8,500 of the complaints
  • The police are reviewing 200 of those cases.

When will the Order prohibiting Price Gouging expire?

The Order prohibiting Price Gouging is set to expire on May 19, 2020.  The Legislature is sitting today to extend the Declared Emergency to June 2, 2020.  When that passes, you can assume the Order prohibiting Price Gouging will be extended an additional 2 weeks.

What sellers does the Order Cover?

  • Persons who own a retail business.
  • Persons who did not ordinarily deal in necessary goods before March 17, 2020.

The Order covers retailers as we might expect.  However, it also covers people who may be advertising goods on Ebay, Amazon or other websites.  This is meant to cover people who bought a large amount of goods right at the beginning of the pandemic and are trying to re-sell them at a large markup.

What is prohibited?

The Order prohibits selling goods at an “unconscionable price.”  However, the Order goes further and prohibits advertising at an unconscionable price.  In other words, the police do not need to have a complaint that someone bought the good before they can charge you.

What is an “unconscionable price?”

The Order does not define what an unconscionable price is beyond stating that, “An unconscionable price includes a price that grossly exceeds the price at which similar goods are available to like consumers.” (emphasis).  In using the word includes the Order does not necessarily limit “unconscionable price” to prices that grossly exceed that of similar goods.

The definition leaves several questions unanswered:

  • What percent markup is “grossly?” 100% markup, 200% markup, or 1000% markup?
  • What happened to the free market?  Why can’t I sell my goods for whatever people want to pay for them?
  • If there really is no other supply, then how can they prove that there are, “similar goods available?”

What items are covered by the prohibition?

Once again, the Order does not provide an exhaustive definition of “necessary goods.” The Act defines necessary goods as [including] “…food, water, electricity, fossil fuels, clothing, equipment, transportation and medical services and supplies” (emphasis added)  The Order does state that, “For greater certainty, ‘necessary goods’ includes the following:”

  1. Masks and gloves used as personal protective equipment in relation to infections;
  2. Non-prescription medications for the treatment of the symptoms of the coronavirus (COVID-19), as those symptoms are described by Public Health Ontario;
  3. Disinfecting agents intended for cleaning and disinfecting objects or humans;
  4. Personal hygiene products, including soap products and paper products.

The question remains if someone wants to sell olive oil at $25.00 a litre verses $5.00 a litre is that a sale at an unconscionable price? What if you wanted to sell Lysol wipes at $11.99 instead of $5.99?  What if that was the last case of wipes?

The Police have come into my business, do I need to provide them with identification?

The Orders made under the EMCPA include an Order requiring people to identify themselves if they are being investigated for violating the act.  If you refuse to identify yourself, the officer has the discretion to:

  • arrest you,
  • bring you to the station so they can attempt to identify you
  • as well as charging you with “obstruction” of the officer in the performance of their duty.

The Order for the requirement to identify states:

(1)       A police officer or any other provincial offences officer within the meaning of subsection 1 (1) of the Provincial Offences Act[1] who has reasonable and probable grounds to believe that an individual has committed an offence under section 7.0.11 of the Emergency Management and Civil Protection Act may require the individual to provide the officer with the individual’s correct name, date of birth and address.

(2)       Every individual who is required under subsection (1) to provide a provincial offences officer with their correct name, date of birth and address shall promptly comply.

I got a ticket for violating an Order.  Can they really put me in jail?

The short answer is yes.  The penalties for violating orders are set out in the EMCPA at s. 7.0.11.  they state that violating an order or interfering or obstructing anyone, “the exercise of a power or the performance of a duty conferred by an order” is liable upon conviction to the following:

(a) in the case of an individual, subject to clause (b), to a fine of not more than $100,000 and for a term of imprisonment of not more than one year;

(b) in the case of an individual who is a director or officer of a corporation, to a fine of not more than $500,000 and for a term of imprisonment of not more than one year; and

(c) in the case of a corporation, to a fine of not more than $10,000,000. 

What Orders are in effect at this time? 

Orders can have effect for up to two weeks and may be renewed.  A list of Orders made during the pandemic that have been extended and are currently in force until May 19, 2020, unless revoked can be found here.

What do I do if I have been charged with violating an Order?

If you or a client has been charged with violating an Order please feel free to call for a consultation.

[1] “provincial offences officer” means,

(a) a police officer,

(b) a constable appointed pursuant to any Act,

(c) a municipal law enforcement officer referred to in subsection 101 (4) of the Municipal Act, 2001 or in subsection 79 (1) of the City of Toronto Act, 2006, while in the discharge of his or her duties,

(d) a by-law enforcement officer of any municipality or of any local board of any municipality, while in the discharge of his or her duties,

(e) an officer, employee or agent of any municipality or of any local board of any municipality whose responsibilities include the enforcement of a by-law, an Act or a regulation under an Act, while in the discharge of his or her duties