|
Criminal - Sex Trade - Material Benefit [CCC 286.2]. R. v. Kloubakov
In R. v. Kloubakov (SCC, 2025) the Supreme Court of Canada dismissed a criminal appeal, this from an Alberta CA ruling that allowed a Crown appeal against an Alberta QB decision in which "the trial judge held that these offences [SS: 'receiving a material benefit from sexual services and of procuring': CCC 286.2 and 286.3] prohibited the safety measures contemplated in Bedford [SS: Canada (Attorney General) v. Bedford (SCC, 2013)] and therefore infringed s. 7 of the Charter".
Here the court canvasses the law of 'material benefit' respecting the trade in sexual services [CCC s.286.2]:B. Material Benefit Offence (Section 286.2)
(1) The Prohibition (Section 286.2(1))
[27] Section 286.2(1) creates a new “material benefit” offence that modernizes the living on the avails of prostitution offence that was found to be unconstitutional in Bedford. Section 286.2 states that it is an offence to receive a financial or other material benefit knowing that it is obtained by or derived directly or indirectly from the commission of the purchasing offence set out in s. 286.1. Section 286.2(1) provides:286.2 (1) Every person who receives a financial or other material benefit, knowing that it is obtained by or derived directly or indirectly from the commission of an offence under subsection 286.1(1), is guilty of
(a) an indictable offence and liable to imprisonment for a term of not more than 10 years; or
(b) an offence punishable on summary conviction. [28] Section 286.2(2) creates a separate offence, with more severe punishment, of receiving a material benefit from sexual services provided by a person under the age of 18.
(2) Exceptions (Section 286.2(4))
[29] Section 286.2(4) narrows the material benefit offence by creating four exceptions to s. 286.2(1) and (2), such that it is not an offence to receive a material benefit if the person who receives the benefit does so: (1) in the context of a legitimate living arrangement with the provider of the sexual services; (2) as a result of a legal or moral obligation of the provider; (3) in consideration for goods and services offered on the same terms and conditions to the general public; or (4) in consideration for goods and services to the provider of sexual services under certain conditions. Section 286.2(4) provides:(4) Subject to subsection (5), subsections (1) and (2) do not apply to a person who receives the benefit
(a) in the context of a legitimate living arrangement with the person from whose sexual services the benefit is derived;
(b) as a result of a legal or moral obligation of the person from whose sexual services the benefit is derived;
(c) in consideration for a service or good that they offer, on the same terms and conditions, to the general public; or
(d) in consideration for a service or good that they do not offer to the general public but that they offered or provided to the person from whose sexual services the benefit is derived, if they did not counsel or encourage that person to provide sexual services and the benefit is proportionate to the value of the service or good. (3) Exceptions to the Exceptions (Section 286.2(5))
[30] Section 286.2(5) provides five exceptions to the exceptions to the material benefit offence, such that it continues to be a criminal offence to receive a material benefit if the person who receives the benefit: (1) used, threatened to use, or attempted to use violence, intimidation, or coercion in relation to the sex worker; (2) abused a position of trust, power, or authority in relation to the sex worker; (3) provided a drug, alcohol, or any other intoxicating substance to the sex worker; (4) engaged in conduct in relation to any person that would constitute an offence under s. 286.3 (procuring); or (5) received the benefit in the context of a commercial enterprise that offers sexual services for consideration. Section 286.2(5) states:(5) Subsection (4) does not apply to a person who commits an offence under subsection (1) or (2) if that person
(a) used, threatened to use or attempted to use violence, intimidation or coercion in relation to the person from whose sexual services the benefit is derived;
(b) abused a position of trust, power or authority in relation to the person from whose sexual services the benefit is derived;
(c) provided a drug, alcohol or any other intoxicating substance to the person from whose sexual services the benefit is derived for the purpose of aiding or abetting that person to offer or provide sexual services for consideration;
(d) engaged in conduct, in relation to any person, that would constitute an offence under section 286.3; or
(e) received the benefit in the context of a commercial enterprise that offers sexual services for consideration. ....
(3) The Material Benefit Offence Does Not Prevent Taking Safety Measures
(a) The Purpose of the Material Benefit Offence (Section 286.2)
[82] The material benefit offence prohibits persons from receiving a financial or other material benefit knowing that it is obtained by, or derived directly or indirectly from, the purchase of the sexual services of others. This offence modernizes the living on the avails of prostitution offence that was found to be unconstitutional in Bedford. The scope of the material benefit offence is narrowed by the four legislated exceptions in s. 286.2(4), which allow sex workers to take the safety measures contemplated in Bedford. At the same time, the legislated exceptions exclude five circumstances (the exceptions to the exceptions) listed in s. 286.2(5), all of which the legislation regards as being exploitative in nature.
[83] Consistent with both aspects of the safety-related purpose of the PCEPA, the purpose of the material benefit offence is to prevent third parties from profiting from the sex work of others, while allowing sex workers to take the safety measures identified in Bedford. The material benefit offence “criminalizes receiving a material benefit from the prostitution of others in exploitative circumstances, including from participation in business activities involving prostitution from which third parties profit”, and permits “those who sell their own sexual services [to enter] into legitimate family and business relationships on the same basis as anyone else” (Technical Paper, at pp. 6-7).
(b) The Material Benefit Offence Allows Sex Workers To Take Safety Measures
[84] The exceptions to the material benefit offence set out in s. 286.2(4) ensure that sex workers can lawfully take the safety measures contemplated in Bedford and maintain regular familial or business relationships. The debate before this Court focused on two exploitative circumstances (or exceptions to the exceptions) that remain within the scope of the material benefit offence under s. 286.2(5): (1) a material benefit obtained “in the context of a commercial enterprise that offers sexual services for consideration”, under s. 286.2(5)(e); and (2) a person who provides “a drug, alcohol or any other intoxicating substance” to a sex worker for the purpose of aiding or abetting that person to sell sexual services, under s. 286.2(5)(c).
[85] The appellants argue that s. 286.2(5)(c) and (e) effectively nullify the exceptions set out in s. 286.2(4) and once again prohibit the safety measures contemplated in Bedford. They assert that the “commercial enterprise” provision criminalizes non-exploitative business arrangements that would allow sex workers to take safety precautions. They also argue that the “drug, alcohol or any other intoxicating substance” provision exposes a third party, hired to provide security for a sex worker, to criminal liability if, for example, they provide the latter with any “drugs” such as “a Tylenol tablet for a headache” (C.A. reasons, at para. 72, quoting the trial judge’s constitutional ruling, at para. 171) to help them continue to sell their sexual services.
[86] We disagree with these submissions. Neither provision prevents sex workers from taking the safety measures contemplated in Bedford.
(i) “Commercial Enterprise” Provision (Section 286.2(5)(e))
[87] We begin by considering the scope of the “commercial enterprise” provision and whether it prevents sex workers from taking safety measures. Recall that s. 286.2(5)(e) provides that a third party cannot rely on the exceptions to the material benefit offence if they received the benefit “in the context of a commercial enterprise that offers sexual services for consideration”.
[88] The term “commercial enterprise” is not defined in the PCEPA. The trial judge interpreted this term, based on its dictionary definition, as meaning “any enterprise or business entered into for profit” (constitutional ruling, at paras. 174-75). She noted that Parliament could have insisted on a requirement of exploitation, such as by requiring third party profiteering or making excessive profits, but that it chose not to do so (para. 175). She concluded that the provision criminalizes any for-profit business offering sexual services for consideration, even if the business involves no exploitation. According to the trial judge, third parties who provide security services through a for-profit business to persons who sell their own sexual services would be subject to criminal prosecution, even if they do not engage in exploitation (para. 183).
[89] Like the Alberta Court of Appeal, we reject the trial judge’s interpretation of the term “commercial enterprise”. The trial judge failed to consider the purpose of this provision in the context of the PCEPA as a whole. As noted by the Ontario Court of Appeal in N.S. (at para. 76 (emphasis added)), whose analysis the Alberta Court of Appeal adopted (at para. 69), “a ‘commercial enterprise’ in s. 286.2(5)(e) necessarily involves the making of a profit derived from third party exploitation of the sex worker. In other words, it involves the making of a profit from the commodification of sexual activity by a third party.” The key question for identifying a commercial enterprise is whether a third party shares in the profits of another person’s sex work.
[90] We pause to consider the meaning of “commodification”, why it is a key contextual factor when interpreting the PCEPA, including the scope of a “commercial enterprise”, and why Parliament views commodification through a commercial enterprise as being inherently exploitative, rather than seeing any exploitation as turning on the specific factual circumstances of the commodification in question.
[91] The heading in the Criminal Code above the new offences introduced by Bill C-36, “Commodification of Sexual Activity”, informs the interpretation of all these provisions, including the term “commercial enterprise” (see R. v. Lucas, 1998 CanLII 815 (SCC), [1998] 1 S.C.R. 439, at para. 47; Law Society of Upper Canada v. Skapinker, 1984 CanLII 3 (SCC), [1984] 1 S.C.R. 357, at p. 377; Sullivan, at § 14.05[3]). The term “commodification” refers to “the action of turning something into or treating something as a mere commodity” (D. Watt, K.C., M. Fuerst and J. D. Makepeace, The 2025 Annotated Tremeear’s Criminal Code (2024), at p. 740). Under the PCEPA, Parliament views the commodification of another human being’s sexual activity as being inherently exploitative because it reinforces gender inequalities in society and normalizes the harmful idea that a person’s body is a commodity to be bought and sold. Parliament is also concerned about exposing children to this harmful idea and the risk of perpetuating a cycle of exploitation. As the Technical Paper explains:Prostitution reinforces gender inequalities in society at large by normalizing the treatment of primarily women’s bodies as commodities to be bought and sold. In this regard, prostitution harms everyone in society by sending the message that sexual acts can be bought by those with money and power. Prostitution allows men, who are primarily the purchasers of sexual services, paid access to female bodies, thereby demeaning and degrading the human dignity of all women and girls by entrenching a clearly gendered practice in Canadian society.
Prostitution also negatively impacts the communities in which it takes place through a number of factors, including . . . exposure of children to the sale of sex as a commodity and the risk of being drawn into a life of exploitation . . . . [Emphasis added; footnotes omitted; p. 4.] [92] When seen from the perspective of the new paradigm of the PCEPA, Parliament views profiting from the commodification of another human being’s sexual activity as inherently involving exploitation. Parliament’s perspective that commodification necessarily involves exploitation does not turn on whether the commercial enterprise makes “excessive” profits, nor does it require a specific act of exploitation, beyond profiting from the commodification of another human being’s sexual activity. Under the PCEPA, commodification, and thus exploitation, results from the fact of profiting from the sale of another human being’s sexual activity.
[93] For this reason, we agree with the Alberta Court of Appeal that the term “commercial enterprise” in s. 286.2(5)(e) does not require factually exploitative conduct or third-party profiteering, in the sense of making excessive or unreasonable profits (paras. 68-70). Factually exploitative conduct is prohibited by s. 286.2(5)(a) and (b), which stipulate that none of the exceptions to the material benefit offence is available if violence, intimidation, or coercion is used (s. 286.2(5)(a)) or if a position of power or trust is abused (s. 286.2(5)(b)) in relation to a sex worker. Third-party profiteering, in the sense of making excessive or unreasonable profits, is prohibited by s. 286.2(4)(d) because the proportionate benefit exception to the material benefit offence is only available if the benefit received is proportionate to the value of the service or good provided. The prohibition on “commercial enterprises” instead targets the inherent exploitation that Parliament sees as arising from commodification and commercialization of sex work by third parties. This provision prevents third parties from profiting from the commodification of sex work.
[94] We will consider below whether, as urged by the appellants and certain interveners, Parliament’s perspective under the PCEPA of viewing commodification as inherently exploitative is a ground for challenging the law under s. 7 of the Charter. For now, we simply note that this is the perspective that Parliament has adopted under this legislation.
[95] This takes us to the question of what specific type of profit-making entity would be considered a “commercial enterprise”. It will be for the courts to determine on a case-by-case basis whether any given enterprise is a “commercial enterprise” engaged in the commodification of sexual activity. That question must be determined based on specific facts and on a contextual and purposive reading of the term “commercial enterprise” under the PCEPA. Even so, three observations can be made regarding what is necessarily excluded from the scope of a “commercial enterprise” as a matter of statutory interpretation. This may help future consideration of this issue.
[96] First, an individual selling their own sexual services, whether independently or cooperatively with others, is not subject to criminal prosecution under the PCEPA. In such circumstances, no third party profits from the commodification of the sexual services of another person. Persons who sell their own sexual services would keep the proceeds from their activities and would benefit from the immunity from prosecution provided under s. 286.5. We therefore agree with the Technical Paper that a “commercial enterprise” cannot capture “individuals who sell their own sexual services, whether independently or cooperatively, from a particular location or from different locations” (p. 8; see also N.S., at para. 75).
[97] We also agree with the Ontario Court of Appeal in N.S. that the hypothetical situation of a cooperative arrangement among sex workers — under which sex workers share costs to lease premises, or hire drivers, receptionists, bodyguards, managers, or other security services — would not be a “commercial enterprise”, because no third party would profit from the commodification of the sexual services of another, and because each sex worker would benefit from the immunity under s. 286.5(1). As the Ontario Court of Appeal explained:The hypothetical [of a lawful arrangement] describes a cooperative: an arrangement where sex workers cooperate to obtain premises and services related to their respective sales of sexual services. The cost of the premises and services is shared; each sex worker pays their share out of their earnings from the sale of their sexual services. The cooperative is not engaged in or concerned with profit. It operates on a shared cost basis. It is the opposite of an enterprise concerned with profit. Each individual sex worker, not the cooperative, is concerned with profit. [para. 74] [98] The term “cooperative” in this context does not refer to a specific legal entity or form of business association. It refers to a way of operating in which each sex worker controls both their own work and the revenue generated from it, as well as their working conditions. Under such a cooperative arrangement, one sex worker could delegate to other sex workers or to a manager tasks associated with the operation of the cooperative.
[99] Such legal entities or business associations could include, for instance, a business arrangement, such as a sole proprietorship, partnership, or joint venture, through which a sex worker or a group of sex workers could hire employees or make use of services that contribute to a safer working environment. Sex workers could contribute to the payment of expenses, provided that any profits are ultimately retained by the sex workers and are not shared with any third party. The key feature is that no one shares in the profit of sex work other than the sex worker. Each of these arrangements addresses the risks associated with the sex work industry and identified by this Court in Bedford: they permit sex workers to use a fixed indoor location and create an employment relationship between sex workers and those whom they hire.
[100] A third party, such as a driver, receptionist, bodyguard, or manager, who provides security services to persons who sell their own sexual services under a cooperative arrangement, could do so lawfully, as long as they do not counsel or encourage such persons to sell sexual services, and provided that the payment or other benefit they receive is proportionate to the value of services they provide (s. 286.2(4)(d)). To interpret “commercial enterprise” under s. 286.2(5)(e) so broadly as to exclude sex workers from lawfully hiring persons who provide security services would nullify s. 286.2(4)(d), a related statutory provision. Such an interpretation should be avoided (Sullivan, at § 13.02[3]; Côté and Devinat, at paras. 1060-62; Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce, 1996 CanLII 149 (SCC), [1996] 3 S.C.R. 727, at para. 66).
[101] We will consider further below whether such a cooperative arrangement is illusory, as urged by the appellants. For now, we simply note that such a cooperative arrangement does not violate the law.
[102] Second, a not-for-profit “safe house” from which sex workers could operate safely indoors would not be a “commercial enterprise”. For example, in Bedford, this Court described how “Grandma’s House”, a charitable enterprise, had run a safe house in the Downtown Eastside of Vancouver where street sex workers could safely bring their clients at a time of growing fears of a serial killer prowling the streets (para. 64). McLachlin C.J. observed that, for some sex workers, “particularly those who are destitute, safe houses such as Grandma’s House may be critical. For these people, the ability to work in brothels or hire security, even if those activities were lawful, may be illusory” (para. 64). She concluded that a law that prohibits sex workers from bringing clients to a safe house is grossly disproportionate to the objective of deterring community disruption and therefore infringes s. 7 of the Charter. As she explained, a law that prevents sex workers “from resorting to a safe haven such as Grandma’s House while a suspected serial killer prowls the streets, is a law that has lost sight of its purpose” (para. 136). Under the PCEPA, however, an enterprise like Grandma’s House that operates as a charitable, not-for-profit safe house would not be considered a “commercial enterprise”, because it would not profit from the sale of the sexual services of another person. As a result, the PCEPA does not prohibit such a safe house from operating. It bears noting that the appellants’ circumstances are far removed from a safe house such as Grandma’s House.
[103] Third, in keeping with the purpose of the material benefit offence to prevent the development of economic interests in the exploitation of the sex work of others, as well as its institutionalization and commercialization, operations that would be considered “commercial enterprises” would include, for example, enterprises owned by third parties that present themselves as a strip club or massage parlour, but operate in part for the purpose of facilitating the purchase of sexual services. Such enterprises, which allow third parties to profit from the commodification of another person’s sexual activity or from the sex work of others, contribute to institutionalizing the commercial sex work industry. They would therefore be excluded from the exceptions set out at s. 286.2(4) and would be captured by the meaning of “commercial enterprise”. At the same time, an individual or entity that merely rented premises to an independent sex worker and did not participate in commodifying sexual activity would not be considered a “commercial enterprise”.
[104] In summary, s. 286.2(5)(e) does not restrict the ability of sex workers from taking the safety measures contemplated in Bedford. It allows sex workers, either individually or collectively with other sex workers, to enter into business arrangements through which they can hire staff to provide a safe working environment, including drivers, receptionists, bodyguards, or managers, provided that third parties do not profit from the sale of sexual services. Nor does this provision prevent sex workers from operating from not-for-profit safe houses.
(ii) Drug, Alcohol, or Any Other Intoxicating Substance (Section 286.2(5)(c))
[105] The appellants also argue that the trial judge correctly concluded that s. 286.2(5)(c) would criminalize the act of a third party, such as a driver or bodyguard, in giving a Tylenol pill to a person who sells their own sexual services, if doing so is to aid or abet that person to offer or provide sexual services for consideration. Criminalizing such conduct, the appellants submit, undercuts the ability of sex workers to hire third parties, like the appellants, to protect their security.
[106] Like the Alberta Court of Appeal, we reject this argument. The trial judge’s reading of s. 286.2(5)(c) is inconsistent with the principles of statutory interpretation. Section 286.2(5)(c) states that the conduct of a person who provides “a drug, alcohol or any other intoxicating substance” to the person from whose sexual services the benefit is derived falls within the scope of the material benefit offence. Although the word “drug” in the English text version of s. 286.2(5)(c) might refer to both narcotics and other medications (such as a Tylenol pill), any ambiguity is resolved by the narrower word “drogue” in the French text version, which only refers to narcotics, and not to other medications (Le Grand Robert de la langue française (electronic version)). The narrower French text reflects the shared meaning and is therefore preferred under the rules of bilingual interpretation (Canada (Transportation Safety Board) v. Carroll-Byrne, 2022 SCC 48, at para. 72, citing Medovarski v. Canada (Minister of Citizenship and Immigration), 2005 SCC 51, [2005] 2 S.C.R. 539, at para. 25, and Côté and Devinat, at para. 1131; see also R. v. Daoust, 2004 SCC 6, [2004] 1 S.C.R. 217, at paras. 28-29). In this case, the shared meaning also reflects Parliament’s intention (Côté and Devinat, at para. 1134).
[107] In addition, including the word “drug” in a list with the other associated words “alcohol or any other intoxicating substance” suggests a common feature among the words, namely, that they only refer to intoxicating substances (Opitz v. Wrzesnewskyj, 2012 SCC 55, [2012] 3 S.C.R. 76, at para. 41). A Tylenol pill is not an intoxicating substance.
[108] Lastly, this interpretation is consistent with the objective of the PCEPA as a whole to target the exploitation of sex workers. As the Technical Paper notes, entry into sex work and remaining in it are influenced by “a variety of socio-economic factors, such as . . . drug addiction” (p. 4). This provision targets third parties who exploit drug addiction to exercise power and control over sex workers. It does not criminalize giving a Tylenol pill or another non-intoxicating substance to a sex worker.
(iii) Conclusion
[109] Section 286.2(5)(c) does not prevent sex workers from taking the safety measures contemplated in Bedford.
|
