R. v. Blondin, 2012 ONCJ 826

Citation: R. v. Blondin , 2012 ONCJ 826 THE ONTARIO COURT OF JUSTICE IN THE MATTER OF THE PROVINCIAL OFFENCES ACT R.S.O. 1990 HER MAJESTY THE QUEEN Vs. STEVEN BLONDIN * * * * * * * * P R O C E E D I N G S A T T R I A L BEFORE HIS WORSHIP JUSTICE OF THE PEACE V.

BUBRIN on November 1, 2012 at 70 Centre Avenue, TORONTO, Ontario Courtroom ‘C2’, at 3:00 p.m. * * * * * * * * Charge(s): s. 132 Employment Standards Act Fail to Comply with Order to Pay 34480 s. 103(8) Employment Standards Act 2000, S .O. 2000, c.41, as amended s. 132 Employment Standards Act Fail to Comply with Order to Pay 34487 s. 103(8) Employment Standards Act 2000, S .O. 2000, c.41, as amended s. 136 Employment Standards Act Fail to Comply with Director Order 34479 s. 106 Employment Standards Act 2000,

S .O. 2000, c.41, as amended * * * * * * * * Appearances: Ms. N. Wilson Provincial Prosecutor In Person Steven Blondin * * * * * * * * THE ONTARIO COURT OF JUSTICE TABLE OF CONTENTS Exam. Cr- Re- WITNESSES : in-Ch. exam. exam. ********** EXHIBITS EXHIBIT NUMBER ENTERED ON PAGE ********** Reasons for Sentence 3 ********** Transcript Ordered: December 6, 2012

Transcript Completed: January 28, 2012 Ordering Party Notified: THURSDAY, NOVEMBER 1, 2012 THE COURT: So Mr. Blondin, normally one stands during the sentence but because my reasons will be on the lengthier side, you will probably be more comfortable sitting down. REASONS FOR SENTENCE BUBRIN, J.P. (Orally): This is the Court’s judgment with respect to the matter of sentencing of Mr. Steven Blondin and the companies of which he was the sole director. On October 5, 2011 the self-represented defendant, Mr.

Steven Blondin, entered guilty pleas on his own behalf and on behalf of his companies: Steven’s Inc. of Alliston, Ontario, Automotive Containment Solutions Inc. of Concord, Ontario, Automotive CSI Inc. of Richmond Hill, Ontario, Automotive CSI Inc. of Alliston, Ontario, Automotive CSI Inc. of Newmarket, Ontario, and AXCEA International Inc. of Toronto, Ontario, to 112 charges in all of failing to Comply with Orders issued by an Employment Standards Officer, pursuant to section 103(8) of the Employment Standards Act, and thereby did commit an offence under

section 132 of the said Act . Specifically, the defendant and the Corporations of which he was the sole director failed to comply with 112 Orders to Pay issued between February 2008 and March 2010 and failed to appeal the said Orders with the Ontario Labour Relations Board. According to the Agreed Statement of Facts in Exhibit 1, the companies in question were registered corporations under the laws of Ontario. The companies provided quality assurance testing in assembly under contract with various manufacturing companies in several locations in the Province of Ontario.

Steven Blondin, who, among his other aliases, is also known as Allan Davidson, Allen Davidson, Steven Blondin, Steven A. Blondin, Steven J. Blondin, Steve Joseph Blondin, Steven Joseph George Blondin, Steven Davidson and Steven Anderson, was the sole director of all the companies during the period in question. Between March 2007 and October 2009, 61 workers employed by Mr. Blondin’s companies filed claims with the Ministry of Labour for unpaid wages. Employment Standards Officer, Janet Peat investigated the claims and found that the wages were owed to all 61 workers. Subsequent to Ms.

Peat’s investigation Orders to Pay were issued. None of the Orders was appealed as provided for in

section 116 of the Employment Standards Act , which then led to the charges before this Court. According to the submissions of Ms. Wilson, the prosecutor for the Ministry of Labour, Mr. Blondin and his six companies owe some $142,000 in unpaid wages to 61 employees. A review of the evidence before this Court indicates that the employees were administrative staff, secretarial support staff, tradesmen and managers. The wages owed range from $183.20 to $9,491.42. Sections 132, 135 and 136 of the Employment Standards Act provide as follows: Under

section 132, A person who contravenes this Act or the Regulations or fails to comply with an Order, Direction or other requirement under this Act or the Regulations is guilty of an offence and, on conviction, is liable,

(a)if the person is an individual, to a fine of not more than $50,000 or to imprisonment for a term of not more than 12 months or to both. (b)Subject to clause (c), if the person is a corporation, to a fine of not more than $100,000, and (c), If the person is a corporation that has previously been convicted of an offence under this Act or predecessor to it, (

i) if the person has one previous conviction to a fine of not more than $250,000, and (ii) if the person has more than one previous conviction, to a fine of not more than $500,000.

Section 135 states as follows: If an employer is convicted under

section 132 of contravening a provision of this Act , other than

section 74 or paragraph 4, 6, 7 or 10 of subsection 74.8(1) the Court shall, in addition, to any fine or term of imprisonment that is imposed, assess any amount owing to an employee if affected by the contravention and order the employer to pay the amount assessed to their Director.

Section 136 reads as follows: A director of a corporation is guilty of an offence, if the director (a)fails to comply with an order of an Employment Standards officer under

section 106 or 107 and has not applied for a review of that order, or (

b) fails to comply with an order issued under

section 107 or - 106 or 107 that has been amended or affirmed by the Board on review of that Order under

section 116 or with a new Order issued by the Board on such a review. With respect to 132(c), the prosecution did not allege any previous convictions against Mr. Blondin or any of the companies in question, under the Employment Standards Act . Although Mr. Blondin, the Court has learned, and this was supported by Exhibit 3, has a criminal record which will be addressed later on, it would appear that this record does not bear on the provisions of

section 132(

c) as such.

Section 136(

b) does not apply in this case because as already stated, when the Orders to Pay were issued no appeal was filed with the Board and there are therefore no amendments, affirmations or new orders by the Board. Given that there was non-compliance of Orders to Pay as stipulated in section 103(8) of the Employment Standards Act , the enforcement and compliance provisions resurface in section 135(1) in

Part 25 of the Act under “Offences and Prosecutions and Additional Orders re Other Contraventions”. To repeat, 135(1) indicates that: The Court shall assess any amount owing to an employee and order the employee - employer to pay the amount assessed. This non-discretionary provision came into effect when this Court signed the restitution orders with respect to the wages owed by Mr. Blondin and his companies on October 5th, 2011, which was in advance of today’s sentencing proper.

The Crown’s position with respect to penalty, as articulated in submissions immediately after the guilty pleas were entered and the Agreed Statement of Facts read, a position reiterated on March 29 th , 2012 and confirmed once again on today’s date, the Crown’s position is that a fine of $135,000 be imposed against Mr. Blondin personally, that a fine of $325,000 be imposed against Mr. Blondin’s

six companies, and finally, that a term of imprisonment of eight to 10 month be ordered against Mr. Blondin, to be served concurrently. The prosecutor’s position was based on sentencing provisions of the Employment Standards Act , the sentencing principles set out primarily in Regina v. Cotton Felts , and precedents found in the Crown’s Book of Authorities on Sentencing. The points underscored by the prosecutor in Regina v. Cotton Felts strike this Court as particularly relevant in arriving at the appropriate sentencing disposition in the present case and the reasons for that disposition.

And I will summarize the main principles from R. v. Cotton Felts . The enforcement of statutes is achieved by fines imposed on offending corporations. The amount of the fine will be determined by complex considerations including the size of the company involved, the scope of the economic activity in issue, the extent of actual and potential harm to the public and the maximum penalty prescribed by Statute. Above all, the amount of the fine will be determined by the need to enforce regulatory standards by deterrence. The next point raised by R. v.

Cotton Felts is that, The amount of the fine must be substantial and significant so that it will not be viewed merely as a licence for illegality nor as a mere slap on the wrist. The amount must be one that would be felt by the defendant. It should also serve as a warning to others who might be minded to engage in similar illegal activity, that it will be costly for them to do so even if they do not succeed in their illegal aims. R. vs. Cotton Felts then continues by indicating that, “...the fine imposed must reflect the gravity of the offences - offence.

The fine must not be tantamount to a licence fee to commit illegal activity, but must be sufficiently substantial to warn others that such illegal activity will not be tolerated...” And finally, “...a sentence by emphasizing community disapproval of

an act and branding it as reprehensible has a moral and educative effect and thereby affects the attitude of the public...” Throughout these proceedings the Court has been given a reasonable amount of description regarding the size of Mr. Blondin’s companies and the scope of their economic activity. Individually, the companies could be defined as relatively small, but together they represent a medium-sized enterprise spread around the Greater Toronto Area and southern parts of Ontario with at least 61 employees. This number is based on the number of the individuals who claimed unpaid wages.

The amount of money owed is also significant, $142,000. The six victim impact statements contained in Exhibit Number 2 provide some insight into the consequences suffered by individual employees whose wages were not fully paid, such as declined offers of employment, inability to pay bills and rent, accumulation of debt, forcing one victim to sell her apartment, having to tap into lines of credit to make ends meet, borrowing money from relatives and friends, destroyed credit ratings, and the like.

Apart from their rightful entitlement to earned wages, the prosecutor quite correctly emphasized the hardships experienced by the affected employees as a result of Mr. Blondin’s actions. As aggravating factors, it was pointed out that Mr. Blondin knew what his obligations were as an employer, making these, in effect, mens rea offences. However, he chose to skirt his responsibilities and to ignore Ministry’s Orders to Pay following the Ministry’s investigation into the many complaints. While there were no allegations of any previous convictions under the Employment Standards Act against Mr.

Blondin and his six companies, the prosecutor argued, based on Mr. Blondin’s criminal record in Exhibit 3, that the defendant had a propensity to commit offences of a similar nature under the Criminal Code , notably two convictions of fraud over and fraud under $5,000 in October 2003 and October 2005, respectively. The better part of Mr. Blondin’s submissions consisted of explanations and excuses for the non-payment of wages, ranging from the ups and downs of the economy, bad management decisions, personal problems, allegations of theft and cheating by employees, to employee disloyalty.

And these are contained in Exhibit 4, which the Court considered in addition to Mr. Blondin’s oral submission. Allegations of theft and cheating by employees and employee disloyalty, in this Court’s view may have been relevant as a basis for launching an appeal with the Ministry of Labour and the Labour Relations Board. This was not done and at this sentencing stage, these allegations have minimal probative value.

The Court also heard from Mr. Michael Tsunac, who was called by Mr. Blondin, who testified about Mr. Blondin’s business fortunes and misfortunes. Mr. Tsunac also spoke about Mr. Blondin’s efforts to re-establish his business in Western Canada. In his submissions, Mr. Blondin reiterated his guilty plea to all the charges; however he appeared to say little with respect to his responsibility and very little that would give this Court some insight into any, what could be defined as, genuine remorse. And I am speaking now of the initial submissions immediately after the guilty pleas. While Mr.

Blondin admitted that he owed money as per the Ministry of Labour’s orders, his focus at that point of his submissions was getting back into business, getting back on his feet, financially. Accepting that re-establishing himself in business was one of the ways in which Mr. Blondin would be able to pay restitution, the Court considered particularly relevant regarding the business he started up in Alberta, Black Hawk Enterprise, and the conversion of Steven’s Inc. to a logistics firm specializing in local, long haul, emergency, and on-demand deliveries.

He indicated that his companies lost credibility and were no longer viable enterprises in Ontario. While Mr. Blondin did not express any opposition to paying restitution as ordered by the Ministry of Labour, he did make the argument that, if sentenced to a term of imprisonment, it would make it impossible for him to pay restitution. Moreover, he outlined a plan based on anticipated contracts and earnings of his companies in the West of Canada to start paying restitution in short order.

At the end of both parties’ submissions on October 5, 2011, the Court ordered a pre-sentencing report and adjourned the sentencing hearing to March 29, 2012. With the filing of a presentencing report, the Court was prepared to give the prosecutor and the defendant an opportunity to make additional submissions. However, due to Mr. Blondin’s absence from court on the 29th of March and the late filing of the presentencing report, the sentencing was then adjourned to June 21, 2012.

Since no restitution had been paid by October 11, 2011, and since restitution was considered by the Court throughout these proceedings as the top priority in determining the appropriate sentence, when the parties reconvened on June 21st, 2012, the matter was once again adjourned to November 1st, 2012, today’s date, to give Mr. Blondin additional time to start paying restitution as per his commitment articulated before this Court in his submissions and in his response to the prosecutor’s submissions following the guilty pleas.

Let me briefly turn to the presentencing report, which, as I indicated, was received in March 2012. According to this report, filed by probation and parole officer Adam Roth, it was difficult to contact Mr. Blondin and once when contact was established, Mr. Blondin, who now resides in Alberta, indicated that he did not have the funds to travel to Toronto to meet with Mr. Roth. This is understandable. The interview was consequently, for the purpose of a report, conducted by telephone. It is for this reason that the probation officer, Mr.

Roth, indicated that - given that the interviews took place over the telephone - he was unable to confirm the identity or the accuracy of the information provided by the defendant. On the resumption date, Ms. Wilson reminded the Court to take note that in the five months since the Court’s sitting on October 5, 2011 no restitution had been paid by Mr. Blondin. The probation and parole officer’s assessment of Mr. Blondin is found in the concluding paragraphs of the presentencing report on page eight contained in Exhibit 5.

I will read into the record that assessment. “The subject presents with a family history characterized by conflict and frequent arguments starting from his teenage years. The subject also had a difficult employment history, given that he has been unable to maintain any of his various businesses in the long run without running financially afoul. He appears to place blame for his family troubles firmly on the shoulders of his parents and intimate partners and spoke at length about how he has been victimized.

Similarly, he blamed his employees for his financial difficulties, for spreading rumours about past illegal violations and exacerbating his financial difficulties with current business; noting that they sought to ruin him. Though(sic) his conversations with the writer, the subject made no mention of the impact of his actions on the others, whether they be family members with whom he had cut communication or employees, who may have been struggling with financial hardships as a result of his business decisions. He spoke only about how others have hurt him.

His lack of the transparency accountability has caused him to violate the trust of his employees by not being fiscally responsible in his business dealings, causing his employees to suffer with non-payment of wages, mounting debt and the loss of their homes. Violations of trust appear to be continuing - a continuing theme among the people affected by the subject and his portrayal of

himself as the victim of these matters is all that much more troubling...” This assessment, while not totally consistent with the Court’s own perception of Mr. Blondin in the course of these submissions, does reflect certain traits which the Court recognizes. While accepting that Mr. Blondin is obligated to pay restitution as ordered, he appeared to minimize in these proceedings his responsibility for the wrongdoing and showed little remorse. He was more focussed on his own hardships, financial and otherwise, than on the consequences of his actions on his employees.

Let me qualify this by indicating that both in his last letter, entered into evidence as Exhibit 6, Mr. Blondin indicates outright that he feels for the individuals who were hurt by his actions, and today he, once again articulated similar sentiments. How genuine Mr. Blondin is with respect to this remorse is open to question. I will accept that he feels sorry, but at the same time, I also have the impression that his focus is on getting his business back on track, and priority number one, rather than the restitution that needs to be paid, even though the two are not separable.

Let me complete the chronology of events preceding Mr. Blondin’s appearance in court today. Mr. Blondin sent to the Court, and to the prosecutor, a package of information describing the current state of his personal finances and business venture in Alberta. Receipts of money generated by selling off some home entertainment items and a copy of a cheque dated October 23, 2012 forwarded to the Director of Employment Standards in trust, in the amount of $1,650 as part of the Director’s liability payment for July, August and September, which amounts to about $550 per month.

The monies that were sent to the Employment Standards Director, in trust appear to have been generated from the sales of the noted home entertainment items. And today the Court has learned that Mr. Blondin has handed over a cheque in the amount of $550, as part of the restitution owed. These monies appear to be the only payments to date made by Mr. Blondin toward the restitution ordered by the Court on October 11th, 2011. The offences of which Mr. Blondin and his six corporations have been convicted of on October 5, 2011 are grave.

Based on the information considered by this Court, the nonpayment of wages has caused varying degrees of hardship to a number of people. Unlike some of the sentencing precedents offered by Ms. Wilson in her Book of Authorities, which involve for the most

part large amounts of money affecting only a few people, the situation here is the opposite. A relatively large number of people and smaller amounts of money owed individually; as indicated in the range of $180 to $9000. The total amount of 142,000 and the cumulative effect, however, are significant. Moreover, even a smaller amount owed to a person of meagre means, as some of Mr. Blondin’s employees appear to have been, can understandably have a devastating impact and cause undue hardship directly to the individuals concerned and by extension, to their families.

This much has been demonstrated in the course of these sentencing procedures, taking into account the victim impact statements. The Court agrees with the prosecution that in addition to the already issued orders to pay restitution, monetary fines against Mr. Blondin and his corporations need to be imposed. I am going to separate the arguments and the considerations for monetary fines and also the question of a term of incarceration as I move to the last part of this judgment.

I am reminded that under the Provincial Offences Act of Ontario custodial sentences are rare and represent punishment of last resort, while monetary fines need to be considered proportionately in the light of the seriousness of the offence. Throughout the various sittings, from October to today, the Court remained open to consider Mr. Blondin’s argument against detention and postponed sentencing on at least two occasions to afford him time to start paying restitution.

One year has gone by and it was only one week before today’s sentencing hearing that a sum of $1650 was sent to the Director of Employment Standards, in trust, as the first and only payment towards the $142,000 owed in restitution. Another $550 was provided today. The money appears to have been generated by selling off of some home entertainment equipment. The income statements of Mr. Blondin submitted to show his and his Alberta companies’ financial state does not look promising at all. Income from his company on which Mr.

Blondin was relying and continues to rely to pay restitution has not and appears unlikely to materialize in the foreseeable future. If Mr. Blondin is to rely on paying restitution by selling off some of his personal household items, the Court seriously doubts that such steps will generate meaningful amounts to be paid to the Director of Employment Standards, in trust, as restitution.

Based on the evidence and arguments considered in the course of these sentencing proceedings, as well as based on the guiding principles for sentencing contained in the prosecutor’s Book of Authorities and sentencing provisions under the Employment Standards Act and Provincial Offences Act , the following sentence in several parts will be imposed. For the purpose of completeness, I will reiterate that the Court has already ordered Mr. Blondin to pay restitution pursuant to section 135(1) of the Employment Standards Act . With respect to Mr.

Blondin, as the individual defendant, the Court will impose on him a fine of $40,000. This is taking into consideration the varying amounts of money owed by Mr. Blondin to 61 employees and accepting that hardship is very difficult to determine from individual to individual and that the issue of hardship can only be addressed cumulatively. With respect to the corporations, the Court imposes a fine of $240,000 against all of Mr. Blondin’s six corporations.

That is together, Steven’s Inc., Automotive Containment Solutions Inc., Automotive CSI Inc., Automotive CSI-Alliston Inc. and Automotive CSI- Newmarket and AXCEA International Inc. It comes to about approximately $40,000 per company. As for a term of imprisonment, the Court remained open throughout to weigh that point against any meaningful payments towards restitution, acceding to Mr. Blondin’s reasoning that if imprisoned he would not be in a position to generate any income to be able to meet these responsibilities.

Given that to date no meaningful restitution has been paid and one year has passed since the pleas of guilty were entered, that argument unfortunately is no longer persuasive. The Court will therefore order that Steven Blondin be imprisoned for a period of three months to be served concurrently. The Court is satisfied that these fines and custodial sentence are proportionate to the seriousness and gravity of the offences committed. I have earlier indicated that these offences have the characteristics of mens rea offences and there is something in Mr.

Blondin’s own history that suggests a propensity to offences of this nature. The Court is satisfied that the principles of specific and general deterrence have been addressed, that the sentence and the fines imposed are appropriate as punishment for the actual and potential harm to the public, and that they are high enough as not to be, or appear to be, a licence fee to commit illegal activity as was committed by Mr. Blondin and his corporations contrary to the Employment Standards Act . I am open to submissions from the parties with respect to the amount of time to pay the fines.

I have in mind, given some insight into the financial circumstances of Mr. Blondin and his business, that a period of two years be allowed to pay the fines. Ms. Wilson, do you have any submissions on this point? MS. WILSON : I have no submissions to make on that point. THE COURT : Mr. Blondin, I think two years is reasonable. If there are outstanding monies to be paid after two years, an extension can be sought and applied for with appropriate reasons and arguments. With respect to the term of imprisonment, if there are no compelling reasons, the Court orders Mr. Blondin to step into custody today. Mr. Blondin?

THE DEFENDANT: Your Honour, is there any way that I can do house arrest so that way I can keep everything to help the people and to make the payments? If I lose everything like that it will take me a long time to get started, to generate even just normal employment to help. And I am asking if I can please do house arrest and - and allow me to continue to generate funds to make payments to restitution. I understand the three month imprisonment and I accept that. It’s just I am asking if I can please have house arrest and do my job and keep making payments. THE COURT: Ms. Wilson?

MS. WILSON: Well a couple of things to say about that. There is no provision under the Provincial Offences Act for this Court to allow for - in effect, what the defendant is asking for is a conditional sentence. And there is no authority for the Court to do that. And you’ll note that in the decision of Pelligrini , the Court talks about that. That was in my casebook. So unfortunately, there is no ability for this Court to - to do that. So with respect to his request, I think that it’s not in the Court’s hands to make such an order.

THE COURT: That is, that is my understanding of the law and this Court’s jurisdiction. This is not a criminal case. It is a Provincial Offence matter and, and house arrest is not an option for, for - as a substitute for imprisonment. The other complicated matter is that you are in Alberta. So I really don’t see a way around. THE DEFENDANT: I have an RCMP office just two blocks from me. I can report to them all the time. Your Honour, I mean.... THE COURT: Mm-hmm. Go ahead, Mr. Blondin. THE DEFENDANT: I understand the imprisonment.

And I understand the suffering that everybody went through whether it’s a small amount or a large amount. I - I want to make good, but if I cannot keep going and work and generate funds and when I come out there is nothing. There is no way to make restitution. And I want to make restitution and I want to keep going and, and honour the debt. I am asking, please if there is some way. The RCMP office is so close and I will report to them every night if I have to, when I get home from work. I work from 5:30 in the morning to seven o’clock at night. I’ve just started to stabilize that income and there is potential.

There really is potential. And the only way I can help the families and help the people is to make the restitution. If I come out and I have nothing, how do I even help? I can’t help. It’s going to take me forever to - to find a job. It - I am just asking, please? THE COURT: The only form of incarceration is straight time and under some circumstances, a term of imprisonment to be served intermittently. I do not see a way of imposing a term of imprisonment in these circumstances outside of straight time. It’s unfortunate.

I sympathize with what you are saying, but I do not see a way around this, having pronounced the, the sentence of three months. Okay. Thank you. MS. WILSON: Thank you, Your Worship. ******** Form 2 CERTIFICATE OF TRANSCRIPT (SUBSECTION 5 (2)) Evidence Act I, Karen Dougan-McKenzie , (Name of Authorized Person) certify that this document is a true and accurate transcript of the recording of R.v. Steven Blondin in the Provincial Offences Courtroom |”C2” (Name of Case) (Name of Court) held at 70 Centre Avenue, TORONTO (Court Address) taken from Recording C4860_C2_20121101_083643 , which has been certified in Form 1.

January 28, 2013 (Date) (Signature of Authorized Person(s))