U.S.-based civil forfeiture abuses could happen here too

Blog, Property Rights, Joseph Quesnel

A Massachusetts couple who have been in the motel business since the 1950s have encountered problems with the feds.

In this piece, it is documented that drug use was discovered in some of the hotel rooms over the years.

The problem is the motel property is worth about $1 million and the couple was set to retire. The couple was not involved in drugs whatsoever themselves.

The feds are able to acquire title to the property through a process known as asset forfeiture, or civil forfeiture. If someone is using property for an illegal purpose, it can be seized. The problem is third parties who are not involved in that crime can sometimes become entangled in this mess.

But, these kinds of horrible situations can occur in Canada too. The main difference between the Canadian and the American forfeiture regime is under the U.S. system forfeitured proceeds can go directly to the police. The Institute for Justice has documented how this can created a perverse incentive to “police for profit.” Thankfully, in Canada this is avoided.

But civil forfeiture is governed by the provinces (thankfully none of the territories yet have adopted civil forfeiture regimes) and property is subject to forfeiture if it determined to be “instrument of crime,” meaning it was used somehow to facilitate the activity. A vehicle carrying drugs or used by an intoxicated driver, or a boat or a home for a grow-op operation are all examples of potential “instruments of crime.”

Some provinces make it easier to acquire such property. But, this is how abuses happen. In 2010, an elderly woman in Calgary had to fight for her condo after the Crown went after it under Alberta’s Victims Compensation and Restitution Payment Act when her son and other associates who lived in a condo under her name were involved in a fraud scheme.

This is similar to the Massachusetts couple  who were targeted for activities they did not commit. But, how are they as motel owners supposed to police the conduct of their private guests? Also, how could this woman know everything her son and his friends were doing in her condo?

This puts too much burden on innocent third parties.

On top of all this, civil forfeiture in all provinces where it exists does not require a criminal conviction and the burden of proof is a lower civil one of balance of probabilities rather than the stricter criminal beyond reasonable doubt most Canadians are familiar with.

It’s time the public demanded provinces tighten up these laws or get rid of them altogether.