CPC-3-24-01 — Administrative Monetary Penalties (AMPs) Under the Radiocommunication Act — Guidance to Stakeholders

Issue 1

Posted on Industry Canada website: 

Preface

This document provides guidance to Canadians, in plain language, about how administrative monetary penalties (AMPs) will be used by Industry Canada and should not be used as a substitute for the Radiocommunication Act.

Comments and suggestions may be directed to the following address:

Industry Canada
Spectrum Management Operations Branch
235 Queen Street
Ottawa, Ontario K1A 0H5

Attention: Spectrum Management Operations

Email: ic.spectrumpublications-publicationsduspectre.ic@canada.ca

All Spectrum Management and Telecommunications publications are available on the following website: www.ic.gc.ca/spectrum.



1. Introduction to spectrum management in Canada

The radio frequency spectrum is a valuable and scarce resource. Under the Radiocommunication Act, Industry Canada is responsible for developing policies for how this resource may be used and ensuring its effective management for the benefit of all Canadians. When providing access to spectrum and regulating its use, the Department seeks to maximize the economic and social benefits that Canadians derive from the use of this resource. As such, it seeks to increase the quality and availability of radiocommunication and wireless services to consumers, and to foster the efficiency and competitiveness of the Canadian telecommunications industry.

Canadian consumers rely on their smart phones and tablets to connect to people and information instantly. These hand-held devices depend on spectrum — an invisible infrastructure on which wireless information travels — to communicate wirelessly. Spectrum is also used for a wide range of other purposes, such as radio networks used by businesses and first-responders (police, fire, ambulance), as well as services to support aeronautical and marine operations and critical infrastructure. In order to ensure that spectrum is available and can be used reliably, Industry Canada establishes technical and non-technical requirements that are set out in licences, standards and operating certificates. These requirements also ensure that wireless devices in Canada are safe and that they support a competitive wireless market.

Radio users and wireless stakeholders participate in the development of Industry Canada’s procedures, rules and standards through consultation processes that are held on a regular basis. Compliance with these requirements is accomplished primarily through information provided to individuals and organizations by the Department in public announcements and on its website, as well as through regular outreach and education efforts by departmental officials in communities across Canada. Such compliance is vital to ensuring continued access to spectrum so that Canadians enjoy the full benefits of its use.

Most licence holders and users of radio equipment comply with licence conditions, technical standards and other rules and procedures established by Industry Canada. Where these requirements are not being met, most cases are inadvertent, often accidental, and are usually resolved by communicating and working with the party to identify solutions and ensure compliance. In some cases, written notices may be issued advising the party of the need to come into compliance with the requirements set by the Department.

2. What is an administrative monetary penalty (AMP)?

In cases where Industry Canada’s spectrum requirements are not being met through voluntary compliance, an administrative monetary penalty (AMP) may be imposed. AMPs are financial penalties that encourage compliance with regulatory requirements, such as those established by Industry Canada relating to spectrum management and wireless services in Canada. AMPs allow for a measured, proportionate response to a wide range of violations under the Radiocommunication Act.

The imposition of AMPs is one of several different actions that may be taken by the Department to enforce its requirements, particularly in cases of more serious violations. Other possible actions include: issuing tickets under the Contraventions Act, which include small fines; issuing orders to take specific measures to come into compliance where radio interference is being caused; seizing devices that do not meet technical standards or are prohibited, such as jammers; and prosecution of regulatory offences.

Under the Radiocommunication Act, Industry Canada can impose AMPs for individuals up to a maximum of $25,000 for a first violation and $50,000 for subsequent violations and for corporations and other entities, up to a maximum of $10 million for a first violation and $15 million for subsequent violations.

3. Under what circumstances would an AMP be imposed?

An AMP may be imposed for a variety of violations of requirements established by Industry Canada. These requirements are defined in the Radiocommunication Act and elaborated upon in the Radiocommunication Regulations, departmental standards and certification procedures, as well as in the various licensing and policy frameworks published by the Department.

Subsections of the Radiocommunication Act for which AMPs can be applied:

  • 4(1) install, operate or possess radio apparatus without or not in accordance with an authorization, other than as permitted elsewhere in the Act;
  • 4(3) manufacture, import, distribute, lease, offer for sale or sell any radio apparatus, interference-causing equipment or radio-sensitive equipment that does not comply with technical standards;
  • 4(4) install, use, possess, manufacture, import, distribute, lease, offer for sale, or sell a jammer; and
  • 5(1.5) failure to comply with any procedure, standard, or condition applicable in respect of a system of competitive bidding established by the Minister under section 5(1.2).

4. How much will I have to pay?

When assessing AMPs in response to a violation, Industry Canada will take into account the following factors:

  1. the nature and scope of the violation;
  2. the history of compliance with this Act by the person who is believed to have committed the violation;
  3. any benefit that the violator obtained through the commission of the violation;
  4. the violator’s ability to pay the penalty; and
  5. any factors established by the regulations or any other relevant factors.

Additional information describing the valuation of penalties for different violations can be found in Annex A.

5. Procedures

5.1 Before a notice of violation is issued

Normally, when a violation has been identified and before a penalty is issued, Industry Canada contacts the individual or corporation or other entity and a verbal and/or written warning is issued. Industry Canada will, whenever possible, assist the violator in coming into compliance while, in many cases, avoiding a penalty. If, after these steps have been taken, the violator does not come into compliance, the Department may take additional enforcement action, including issuing a notice of violation. It is also possible that in some cases, such as when the health and safety of Canadians is jeopardized, a notice of violation will be issued without any warnings delivered.

5.2 Notice of violation is served

Where Industry Canada determines that a violation has occurred and that it is appropriate to use an AMP, it will issue a document, called a notice of violation, to the individual, corporation or other entity.

Each notice of violation provides the following information:

  1. the name of the person believed to have committed the violation;
  2. a description of the type of violation that occurred;
  3. the action that caused the violation;
  4. the dollar amount of the penalty that you must pay; and
  5. the next steps that you must take to pay the penalty or seek an alternative.

As soon as a notice of violation is served, the violator should take action to address the violation and come into compliance. AMPs can be applied for each violation and, where appropriate, for each item, such as unlicensed radio apparatus or jammers that are connected to the violation.

5.3 Response options available to the violator

When a notice of violation has been issued, the violator generally has 30 calendar days from the date that the notice of violation was served in which to respond. The notice of violation will identify key dates, will include instructions concerning how to respond to the notice and will provide information about the actions that violators may take, as described below:

Option 1: Pay the Penalty

AMPs are payable to the Receiver General for Canada. The notice of violation will provide specific instructions concerning how and where to pay the penalty. By paying, you are acknowledging that you have committed the violation. Other than maintaining compliance, no further action is required after payment is made.

Option 2: Request an Undertaking

Should you identify a challenge related to your violation that makes it difficult for you to come into compliance and wish to discuss a method for addressing that challenge, you may approach Industry Canada to seek an undertaking.

All requests for undertakings must be made in writing to the Industry Canada official who issued the notice of violation within 30 days after the day on which the notice of violation is served. Industry Canada will work in partnership with the violator to address the issues that led to a notice of violation. The Department is not, however, obligated to agree to participate in an undertaking.

If your request for an undertaking is granted, Industry Canada will work with you to establish the terms and conditions under which you will come into compliance. This arrangement will be in the form of a compliance agreement that must be agreed to by both you and Industry Canada before it takes effect.

A compliance agreement will identify specific actions that the violator will undertake to come into compliance with the Act and the time frame for doing so. It will also require that the violator pay a specified penalty. Generally, the penalty will be the amount listed on the original notice of violation. However, in exceptional circumstances, the penalty may be reduced by a small amount to reflect, for example, extraordinary costs to the violator to come into compliance.

Entering into a compliance agreement will conclude the proceedings related to the original notice of violation. However, failure to fulfill the terms of the compliance agreement represents a separate violation for which an AMP may be imposed. Similarly, violations that continue after an AMP has been paid may be subject to further enforcement actions under the either the Radiocommunication Act or the Contraventions Act.

Option 3: Dispute the Penalty

You can dispute the imposition of the AMP by making a written representation to Industry Canada, within 30 calendar days after the day on which the notice of violation is served.

The representation must include:

  • a copy of the notice of violation;
  • a description of what aspect(s) of the notice of violation you are disputing;
  • detailed information supporting the disputed aspect(s) of the notice of violation;
  • a statement of the relief being sought; and
  • your contact information.

The Department will review the written representation and the evidence that was used to issue the notice of violation. Additional questions may be posed to the violator if the Industry Canada official responsible for the review needs further information. Following a review of all of the information, Industry Canada will issue a decision and will either uphold the penalty as stated in the notice of violation, or reduce or cancel it.

A copy of this decision will be provided to the violator. If a penalty is still outstanding, the dollar amount set out in the decision is payable to the Receiver General for Canada within 30 calendar days of the date that the decision is served.

If you wish to dispute the decision by Industry Canada, you may seek leave to appeal to the Federal Court. Additional information is available at www.fct-cf.gc.ca.

5.4 Failure to pay an AMP

If a violator does not respond to a notice of violation within the period as specified in the notice of violation, the alleged violator will be deemed to have committed the violation and the AMP is immediately payable. This means that failure to respond to a notice of violation within the allotted time period has the same effect as admitting to having committed the violation.

6. Publication of information

Industry Canada will publish information concerning violations, AMPs, undertakings and representations. All significant and subsequent violations committed by individuals, as well as all violations committed by corporations and other entities, will be posted individually on the Department’s compliance web page. Published information will include the name of the violator, a description of the violation and the amount of the AMP. Other violations assessed against individuals will be published in summary form on an annual basis.

If applicable, information will also be published on the Department’s compliance web page on the terms of an undertaking and/or a decision following a representation. This information will be published after the violator has either paid the penalty or entered into a compliance agreement, or when the response period has passed.

Furthermore, all judicial decisions arising from appeals of AMPs issued by Industry Canada will be posted on the Department’s compliance web page.


Annex A — Additional Information on Assessing Administrative Monetary Penalties (AMPs)

The Minister of Industry has the authorityFootnote 1 to impose AMPs for individuals of up to $25,000 for a first violation of certain sections of the Radiocommunication Act and $50,000 for subsequent violations; and for corporations and other entities up to $10 million for a first violation, and $15 million for subsequent violations.

1. Factors to be taken into account when assessing AMPs

When assessing AMPs for violations, Industry Canada will take into account the following factors:

Nature and scope
Penalty amounts will take into account the nature of the violation, as well as the scope of its impacts on the radio frequency environment, use of the spectrum resource and on individual Canadians, communities and the Canadian marketplace. This means that, in general, penalties will be higher the greater the scope of the violation and more severe its impact.
Compliance history
Penalty amounts will take into account the violator’s history of compliance with the Act. This means that penalties will be higher for second and subsequent instances of the same violation.
Benefits obtained
Penalty amounts will take into account benefits that may have been obtained by committing the violation. These benefits may include, for example, increased revenues or profits, a gain in market share or cost savings. This means that, in general, penalties will be higher the greater the benefits obtained by the violator.
Ability to pay
Penalty amounts will take into account the size of a violating entity (or individual), which may be measured by factors such as annual revenues, market capitalization or number of employees. This means that, in general, penalties will be higher for larger violators.

Industry Canada may also take into account any other factors that it considers relevant.

2. Assessing penalties

For purposes of assessing AMPs, applicable violations under the Act will be classified into two categories that generally reflect their broad nature and scope.

2.1 Type I Violations

Using radio equipment improperly and/or equipment that does not meet standards established by Industry Canada can have direct and immediate impacts on the radio frequency environment. These effects are often localized in nature, i.e. within the vicinity of the radio equipment being used. Similarly, using radio equipment without a licence or using a jammer can have negative impacts, such as interfering with radiocommunications and other licensed radio equipment. In some cases, this may also pose risks to public health and safety. The impacts of these violations will typically be well defined and measurable. Penalties for Type I violations, along with the dollar values that will generally be assigned to these violations, are listed in Table 1. These values are listed on a per-device and per-violation basis.

Table 1 — Penalties for Type I Violations
Violation
Short-Form Description
Penalty Amounts
Individuals Corporations and
Other Entities
1st
Violation
2nd +
Violation
1st
Violation
2nd +
Violation
Installation, operation, or possession of any radio apparatus in contravention of any term or condition of a radio licence $500 $1,000 $1,500 $3,000
Installation, operation, or possession of any radio apparatus without a radio licence or operation of any radio apparatus without a radio operator certificate where one is required $1,000 $2,000 $2,500 $10,000
Installation, operation or possession of a jammer $1,500 $3,000 $5,000 $10,000

As noted above, the amounts set out in this table will normally apply to each instance of a violation and, where appropriate, each item, such as a radio apparatus or jammer. For example, an individual who possesses three jammers could face an AMP valued at $4,500, i.e. $1,500 for each jammer.

Where circumstances warrant, Industry Canada may adjust Type I penalties to take into account the direct and indirect impacts of the violation on the radio frequency environment or the benefits obtained and the ability to pay on the part of the violator.

2.2 Type II Violations

Type II violations may have wider and/or indirect impacts on the radio frequency environment, as well as broader impacts on spectrum management, individual Canadians, communities and the Canadian marketplace. The impacts of these violations will likely differ from case to case and often will be defined and measured differently in each case for the purposes of assessing penalties.

Penalties for Type II violations will normally apply to each instance of a violation and to each applicable licence or certificate. The number of devices involved, such as radio apparatus or jammers may also be taken into account. Penalties for Type II violations will be assessed on a case-by-case basis with penalties assessed up to the maximum amounts listed in Table 2.

Table 2 — Maximum Penalties for Type II Violations
Violation
Short-Form Description
Penalty Amounts
Individuals Corporations and
Other Entities
1st
Violation
2nd +
Violation
1st
Violation
2nd +
Violation
Installation, operation, or possession of any radio apparatus without a spectrum licence or, when used for broadcasting, without a broadcasting certificate $25,000 $50,000 $10M $15M
Installation, operation, or possession of any radio apparatus in contravention of any term or condition of a spectrum licence or, when used for broadcasting, in contravention of any term or condition of a broadcasting certificate $25,000 $50,000 $10M $15M
Installation, operation or possession of radio apparatus in contravention of standards established by Industry Canada to meet Health Canada’s Safety Code 6 $25,000 $50,000 $10M $15M
Manufacture, importation, distribution, leasing, offering for sale, or sale of any radio apparatus, interference- causing equipment, or radio-sensitive equipment that does not comply with standards established by Industry Canada $25,000 $50,000 $10M $15M
Manufacture, importation, distribution, leasing, offering for sale, or sale of a jammer $25,000 $50,000 $10M $15M
Contravention of any procedure, standard or condition applicable in respect of a system of competitive bidding $25,000 $50,000 $10M $15M

Violations of spectrum licence conditions include those related to deployment requirements, antenna siting,Footnote 2 tower-sharing and roamingFootnote 3 and spectrum licence transfersFootnote 4 among others.

Violations of Safety Code 6 guidelines include failure to comply with the guidelines for exposure to radio frequency fields as set out by Health Canada.Footnote 5 They also include failure to provide information requested by Industry Canada to verify compliance with these guidelines.

Rules specific to each competitive bidding system, such as a spectrum auction, will be established in advance by Industry Canada in the licensing framework for the applicable spectrum. These rules normally include prohibitions from cooperating, collaborating, discussing or negotiating agreements with competitors, relating to the spectrum being auctioned or relating to the post-auction market structure, as well as failure to disclose the names of affiliated entities in an application to bid in an auction and failure to provide data, information and reports as specified in auction rules and procedures.

In assessing Type II penalties, Industry Canada will take into account the direct and indirect impacts on the radio frequency environment, the number of devices involved, as well as the impacts of the violation on the following:

  • individual Canadians and communities;
  • health and safety;
  • wireless services to consumers;
  • the wireless marketplace;
  • the integrity of the licensing processes, including spectrum auctions; and
  • Industry Canada’s ability to manage the spectrum for the benefit of all Canadians.

Annex B — Frequently Asked Questions

1. Q: What are administrative monetary penalties (AMPs)?

A: AMPs are financial penalties that Industry Canada can impose to respond to certain violations of the Radiocommunication Act. AMPs provide the Department with a flexible enforcement tool to complement other types of sanctions, such as tickets or licence suspension.

2. Q: Who will be subject to AMPs?

A: AMPs may be imposed on wireless carriers and broadcasters that violate conditions of licence established by Industry Canada; participants in spectrum licence auctions who break the rules; retailers, importers and distributers of wireless devices if those devices do not comply with standards; individuals or businesses operating radios without proper authorization; and those who use or acquire jammers.

3. Q: How do the amendments to the Radiocommunication Act affect participants in a spectrum licence auction?

A: Participants who break established auction rules may be subject to an administrative monetary penalty in accordance with section 15 of the Act.

4. Q: Do any other countries use AMP systems?

A: Yes. AMPs are being increasingly used for regulatory enforcement in Canada and other countries because they are an effective, alternative tool for promoting compliance. Currently, many telecommunications regulatory bodies in other countries — including the United States, the United Kingdom and Australia — use AMPs as part of their enforcement regimes. Several other federal and provincial agencies in Canada also use AMPs as part of their regulatory and compliance regimes, including the Canadian Food Inspection Agency, Transport Canada, the Canada Border Services Agency, the Canadian Radio-television Telecommunications Commission and the Financial Transactions and Reports Analysis Centre of Canada.

5. Q: What are the maximum penalties and how will penalties be determined?

A: Industry Canada has the authority to impose penalties of up to $25,000 for an initial violation and up to $50,000 for subsequent violations by an individual. For corporations and other entities, penalties of up to $10,000,000 for an initial violation and $15,000,000 for subsequent violations may be imposed.

A penalty for a given violation will take into account the nature and scope of the violation; the violator’s history of compliance with the Act; the benefit obtained from committing the violation; the violator’s ability to pay the penalty; and any other relevant factor(s).

6. Q: Will individuals and small businesses be subject to the same penalties as large corporations?

A: The size of the penalty assessed will account for the financial position of the violator to ensure that the penalty provides an appropriate incentive to comply with the legislation. Additionally, penalties listed in the Radiocommunication Act are maximums only; any penalty imposed will reflect the scope and nature of the violation and the violator’s circumstances.

7. Q: What is the process? What happens once a penalty is imposed? Does it need to be paid even if the individual or company promises to comply with the legislation?

A: Information will be provided on all notices of violation and will be available on Industry Canada’s website. Upon receipt of a notice of violation, the individual or company must take one of three actions within 30 calendar days: pay the penalty, work with the Department to enter into a compliance agreement, or dispute the penalty.

8. Q: How can the violator dispute the penalty?

A: A written representation can be sent to the Department within 30 calendar days of receiving the notice of violation. Industry Canada will review the representation and determine whether the penalty should stand or whether to modify it. The violator can also seek leave to appeal to the Federal Court.

9. Q: Where does the money that is collected go?

A: All cheques must be made out to the Receiver General for Canada, and the funds will be deposited into the general revenues of the Government of Canada.

10. Q: When will the AMPs regime be implemented?

A: Industry Canada’s AMPs regime became effective when the amendments to the Radiocommunication Act received royal assent on December 16, 2014.

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