Federal Court Allows Appeal on Administrative Monetary Penalty

Date: 20260115 Docket: T-2545-23 Citation: 2026 FC 58 Toronto, Ontario, January 15, 2026 PRESENT: Madam Justice Whyte Nowak BETWEEN: [COMPANY] Appellant and [NAME] OF CANADA Respondent

JUDGMENT AND

REASONS I. Overview [ 1 ] [COMPANY] [[NAME]] is a federally regulated [NAME] licensed under the Trust and Loan Companies Act, SC 1991, c 45 [ Trust and Loan Companies Act ]. [NAME] offers a variety of financial and trustee services including fixed rate residential mortgages as an alternative to large financial institutions. In January 2020, a customer made a formal complaint [Complaint] regarding undisclosed mortgage discharge fees charged by [NAME]. The matter was referred to the Financial Consumer Agency of Canada [[NAME]], an independent federal body created in 2001 pursuant to subsection 3(1) of the Financial Consumer Agency of Canada Act , SC 2001, c 9 [ [NAME] Act ]. The [NAME] is tasked with supervising financial institutions to determine whether they comply with the consumer provisions of various statutes applicable to them. [ 2 ] At the conclusion of the investigative and adjudicative processes, the Commissioner of the [NAME] [Commissioner] issued a decision dated October 30, 2023 [Decision] finding that [NAME] had contravened two provisions of the Cost of Borrowing (Trust and Loan Companies) Regulations , SOR/2001-104 [ Regulations ]: (i) paragraph 6(2.1)(b) [Violation 1]; and (ii) paragraph 8(1)(p) [Violation 2]. The Commissioner imposed an administrative monetary penalty [AMP] of $1.6 million for Violation 1 and directed the staff of [NAME] [[NAME]] to address all outstanding compliance issues, including the refunding of amounts uniquely related to Violation 2, through a Compliance Agreement with [NAME]. [ 3 ] [NAME] brings this appeal of the Decision on the basis that it contains errors of law and was arrived at in a manner that was procedurally unfair. [NAME] admitted that it committed Violation 1, it submits that the AMP imposed by the Commissioner is inappropriate and excessive. It denies liability for Violation 2 as alleged and argues that it was arrived at in a manner that denied it the opportunity to know the case it had to meet. [ 4 ] While I find no merit in [NAME]’s suggestion that it was denied procedural fairness, [NAME] has shown errors in the Decision which warrant this Court’s intervention. For the reasons that follow, this appeal is allowed, and the Decision is quashed and remitted back to the Commissioner for redetermination.

II. Legislative Framework [ 5 ] Sections 19 to 31 of the [NAME] Act authorize the Commissioner to initiate enforcement proceedings for breaches of designated consumer provisions and, where a violation is established, to impose AMPs. [ 6 ] The provisions that may give rise to an AMP include subsection 436(1) of the Trust and Loan Companies Act as well as the Regulations : Disclosing borrowing costs Communication du coût d’emprunt 436 (1) A company shall not make a loan to a [NAME] that is repayable in Canada unless the cost of borrowing, as calculated and expressed in accordance with section 437, and other prescribed information have been disclosed by the company to the [NAME] at the prescribed time and place and in the prescribed form and manner. 436 (1) [NAME] ne peut accorder à une [NAME] de prêt remboursable au Canada sans lui communiquer, selon les modalités — notamment de temps, lieu et forme — réglementaires, le coût d’emprunt, calculé et exprimé en conformité avec l’article 437, et sans lui communiquer les autres renseignements prévus par règlement. [ 7 ] The specific violations at issue on this appeal relate to paragraph 6(2.1)(b) and paragraph 8(1)(p) of the Regulations , which provide as follows: [NAME] Déclarations — dispositions générales Manner Forme 6 (2.1) For a disclosure statement that is part of a credit agreement in respect of a loan, a line of credit or a credit card or an application for a credit card, 6 (2.1) Dans le cas où la déclaration figure dans la convention de crédit portant sur un prêt, une marge de crédit ou une carte de crédit ou dans une demande de carte de crédit : … … (b) the applicable information box, as set out in one of Schedules 1 to 5, containing the information referred to in that Schedule, must be presented at the beginning of the agreement or application. b) l’encadré informatif prévu à l’une des annexes 1 à 5, selon le cas, et contenant les renseignements visés à l’annexe applicable est présenté au début de la convention ou de la demande. Disclosure — Content Contenu de la déclaration Fixed Interest Loans for a Fixed Amount Prêts à taux d’intérêt fixe d’un montant fixe 8 (1) A company that enters into a credit agreement for a loan for a fixed interest rate for a fixed amount, to be repaid on a fixed future date or by instalment payments, must provide the [NAME] with an initial disclosure statement that includes the following information: 8 (1) [NAME] qui conclut une convention de crédit visant un prêt à taux d’intérêt fixe d’un montant fixe remboursable à date fixe ou par versements doit remettre à l’[NAME] une première déclaration comportant les renseignements suivants : … … (p) the existence of a fee to discharge a security interest and the amount of the fee on the day that the statement was provided; and p) l’existence de frais pour la radiation d’une sûreté et leur montant le jour où la déclaration est remise; [ 8 ] Subsection 19(2) of the [NAME] Act sets the maximum penalties for violations committed by individuals, institutions and operators. The current provision came into force April 30, 2020, and provides that: Maximum penalties Plafond de la pénalité 19 (2) The maximum penalty for a violation is $1,000,000 in the case of a violation that is committed by a [NAME], and $10,000,000 in the case of a violation that is committed by a [NAME] or a [NAME]. 19 (2) La pénalité maximale pour une violation est de 1 000 000 $ si l’[NAME] est une [NAME], et de 10 000 000 $ si l’[NAME] est une [NAME] ou un exploitant de réseau de cartes de paiement. [ 9 ] It is important for the purposes of this appeal to note that prior to April 30, 2020, the maximum AMP the Commissioner could impose was $200,000 (from January 1, 2010 to May 23, 2012) and $500,000 (from May 24, 2012 to April 29, 2020). [ 10 ] The criteria that the Commissioner must consider when determining the amount of an AMP to impose on a regulated entity is provided for in section 20 of the [NAME] Act : Criteria for penalty Critères 20 Except if a penalty is fixed under paragraph 19(1)(b), the amount of a penalty shall, in each case, be determined taking into account 20 Sauf dans le cas où il est fixé conformément à l’alinéa 19(1)b), le montant d’une pénalité est déterminé, dans chaque cas, compte tenu des critères suivants : (a) the degree of intention or negligence on the part of the person who committed the violation; a) la nature de l’intention ou de la négligence de l’[NAME]; (b) the harm done by the violation; b) la gravité du tort causé; (c) the duration of the violation; c) la durée de la violation; (d) the ability of the person who committed the violation to pay the penalty; d) la capacité de l’[NAME] de payer le montant de la pénalité; (e) the history of the person who committed the violation with respect to any prior violation or conviction under an Act listed in Schedule 1 within the five-year period immediately before the violation; and e) les antécédents de l’[NAME] — violation d’une loi mentionnée à l’annexe 1 ou condamnations pour infraction à une telle loi — au cours des cinq ans précédant la violation; (f) any other criteria that may be prescribed. f) tout autre critère prévu par règlement. [ 11 ] Notably, the criteria of “the duration of the violation” and “ability to pay” at subsections 20(c) and (d) respectively, were only added to section 20 as of April 30, 2020. [ 12 ] Section 20.1 of the [NAME] Act states that the purpose of the AMP penalty is to promote compliance with the consumer provisions and compliance agreements and not to punish offenders.

III. Facts A. [NAME] [ 13 ] At all relevant times, [NAME] charged two fees at the time of the discharge of a customer’s fixed rate mortgage. First, [NAME] charged a $495 fee to discharge [NAME]’s security interest in the property [the Discharge Administration Fee]. There is no dispute that the Discharge Administration Fee was always properly disclosed by [NAME]. [NAME] charged a second fee to produce a final mortgage statement relating to the discharge [the $100 Statement Fee]. [NAME] acknowledges that between January 20, 2007 and November 30, 2020, it failed to disclose the $100 Statement Fee in the information box of the credit agreement [Information Box] as required by paragraph 6(2.1)(b) of the Regulations . Instead, [NAME] disclosed the $100 Statement Fee in its Schedule of Additional Costs. B. The Complaint [ 14 ] On January 23, 2020, [NAME] received the Complaint regarding fees for the discharge of the customer’s mortgage and its balance owing at maturity. The matter was referred to the [COMPANY] [[NAME]] , who initiated an investigation. The [NAME] prepared a “Summary Report – Systemic Bank Issue Reported by External Complaint Body,” dated February 5, 2021 [Summary Report], which characterized the identified compliance issues as “systemic” and noted unclear or incorrect disclosure of borrowing costs by [NAME] and its charge of a discharge fee without informing its customers. [NAME] reported [NAME] to the [NAME]. [NAME] ultimately settled with the [NAME] on November 29, 2020, and made organizational changes to its compliance program including changes to its Information Box and Schedule of Additional Costs. [ 15 ] On February 10, 2021, the [NAME] contacted [NAME] regarding the Summary Report which noted failures to disclose in accordance with provisions of the Regulations , including its charge of the $100 Statement Fee without disclosing the fee to customers. After the [NAME] contacted [NAME] determined the issue met the reporting threshold and formally reported the matter to [NAME] itself. C. The [NAME] [ 16 ] In April 2021, the [NAME] commenced an investigation regarding [NAME]’s disclosure of mortgage fees payable upon discharge. The investigation generally followed the process outlined in the [NAME] [Supervision Framework]. Between October 2022 and April 2023, [NAME] and [NAME] had a number of communications, including meetings, telephone conversations and written correspondence. [ 17 ] On December 6, 2022, [NAME] was informed that the [NAME] opened a new investigation relating to paragraph 6(2.1)(b) of the Regulations , which became the subject of what is referred to in this appeal as Violation 1. [ 18 ] On December 22, 2022, [NAME] issued a Level 3 Notice of Breach [Notice of Breach] to [NAME] |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| |||||| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| 　|　 |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| On February 15, 2023, [NAME] informed [NAME] in writing that its investigation had identified breaches related to paragraph 8(1)(p) of the Regulations . [ 19 ] A draft compliance report prepared by [NAME] and submitted to the Commissioner, concluded there were reasonable grounds to believe that [NAME] violated paragraphs 6(2.1) (b) and 8(1)(p) of the Regulations . On March 3, 2023, [NAME] provided [NAME] with portions of the draft Compliance Report for fact-checking, which [NAME] did on March 17, 2023. D. The Notice of Violation [ 20 ] On April 5, 2023, the [NAME] issued a Notice of Violation followed by a final compliance report [Final Compliance Report], which stated that the Commissioner had reasonable grounds to believe that [NAME] committed the following violations in respect of the $100 Fee Statement: (i) Violation 1 - from January 1, 2010 to November 30, 2020, [NAME] failed to provide [NAME] who entered into a fixed rate mortgage agreement with an information box that included the types and amount of other fees as required by paragraph 6(2.1)(b) of the Regulations ; and (ii) Violation 2 – from January 20, 2007 to November 30, 2020, [NAME] failed to provide [NAME] who entered into a fixed rate mortgage agreement with an initial disclosure statement that included a fee to discharge a security interest as required by paragraph 8(1)(p) of the Regulations [collectively, the Violations]. [ 21 ] Based on an application of the [NAME] Framework [AMPF] and a finding that the Violations continued past April 30, 2020 ( i.e. date of the AMP amendments), the Notice of Violation proposed AMPs of $1.6 million for Violation 1, and of $1.55 million for Violation 2. [ 22 ] [NAME] sought and obtained an extension of time to make representations to the Commissioner [Written Representations]. In its Written Representations dated June 5, 2023 , [NAME] admitted to Violation 1 as alleged in the Notice of Violation but disputed Violation 2 as alleged. [NAME] submitted that the proposed AMPs for both Violations were inappropriate and excessive. E. The Decision [ 23 ] On October 30, 2023, pursuant to subsection 23(2) of the [NAME] Act , the Commissioner issued the Decision confirming the Notice of Violation. In her Decision, she determined that [NAME] had violated paragraphs 6(2.1) (b) and 8(1)(p) of the Regulations . The Decision was based on [NAME]’s admission with respect to Violation 1, the Notice of Violation, the [NAME]’s Written Representations. [ 24 ] The Commissioner accepted [NAME]’s admission of liability for Violation 1 (for failing to disclose the $100 Statement Fee in the Information Box as required by paragraph 6(2.1)(b) of the Regulations ) and imposed a penalty of $1.6 million. The Commissioner considered the AMP to be appropriate to promote compliance by [NAME] and serve the purpose of specific and [NAME] deterrence. She stated that a compliance agreement was no substitute for the determination of an appropriate penalty amount relative to the Violations which she considered to be “damaging to confidence in the financial system, and the reputation of [NAME], if breaches of disclosure provisions are allowed to remain undetected and unremedied for extended periods.” [ 25 ] The Commissioner found a “very significant level of negligence” related to how [NAME] fulfilled its compliance and regulatory responsibilities noting that [NAME] had “some knowledge” of the issues. The Commissioner acknowledged the changes made by [NAME] in 2020 but also noted the long duration of the Violations and the lack of self-reporting. The Commissioner acknowledged the very low level of financial harm occasioned by the Violations based on the low median financial impact per customer and the fact that [NAME] had provided financial remediation to customers for Violation 1. The Commissioner noted the long duration of the [NAME]’s positive compliance history, the latter of which the Commissioner viewed as a mitigating factor. [ 26 ] The Commissioner found [NAME]’s failure to disclose the $100 Statement Fee in the initial disclosure statement to make out Violation 2, finding that it is a fee “in relation to” the discharge of a mortgage as referred to in paragraph 8(1)(p) of the Regulations . The Commissioner did not impose an AMP and instead directed [NAME] to address all outstanding compliance issues, including the refunding of amounts uniquely related to Violation 2, through a Compliance Agreement with [NAME]. [ 27 ] On November 30, 2023, [NAME] filed a Notice of Appeal in this Court.

IV. Issues and Standard of Review [ 28 ] The following issues have been raised on this appeal: Did the Commissioner err in assessing the AMP for Violation 1? (1) Did the Commissioner apply the wrong maximum AMP? (2) If the Commissioner applied the wrong maximum AMP, does the public protection exception to the presumption against retrospective application of statutes apply? (3) Did the Commissioner fetter her discretion in determining the amount of the AMP for Violation 1? (4) If the Commissioner erred in assessing the AMP for Violation 1, what remedy should this Court provide? Did the Commissioner err in finding that [NAME] committed Violation 2 as alleged? Was the Decision with respect to Violation 2 made in breach of the principles of procedural fairness? [ 29 ] As a statutory appeal under subsection 24(1) of the [NAME] Act , the ordinary appellate standards apply ( Canada (Minister of Citizenship and Immigration) v [NAME] , 2019 SCC 65 at paras 36-37, 50-52). According to [NAME] v [NAME] , 2002 SCC 33 at paragraphs 26-36 [ [NAME] ], questions of fact and questions of mixed fact and law (absent an extricable question of law) are reviewable on the deferential standard of palpable and overriding error, whereas questions of law are reviewable on a non-deferential standard of correctness ( [NAME] at paras 8, 10, 21, 37 and Canada v [NAME] Corporation , 2012 FCA 165 at para 46). [ 30 ] As to the issue of procedural fairness, the ultimate question to be answered by a reviewing Court is whether the applicant knew the case to meet and had a full and fair chance to respond ( [COMPANY] v Canada ([NAME]) , 2018 FCA 69 at para 56).

V. Analysis A. The Commissioner erred in assessing the AMP for Violation 1 [ 31 ] [NAME] has admitted to the conduct underlying Violation 1 but challenges the amount of the AMP imposed by the Commissioner. [NAME] argues that the AMP should either be set aside entirely or substantially reduced for three reasons. (1) The Commissioner erred in her application of the maximum AMP [ 32 ] [NAME] submits that the Commissioner erred in exclusively applying the current version of subsection 19(2) of the [NAME] Act , given that 95% of the breaches occurred before April 30, 2020, when the maximum penalties were increased. [NAME] submits that the Commissioner’s error violates the fundamental presumption that Parliament does not intend legislation to apply retrospectively or retroactively (citing Brosseau v Alberta Securities Commission , [1989] 1 SCR 301 at 317 and [NAME] v Canada (Public Safety and Emergency Preparedness) , 2017 SCC 50 at paras 43-45, 48 [ [NAME] ]). [ 33 ] [NAME] takes the position that each non-compliant agreement constitutes a separate violation or discrete event and the fact that [NAME] remained non-compliant across multiple agreements over time should not be conflated with a “continuing” state of breach as the Commissioner found (citing Canada ([NAME]) v [NAME] , 2007 SCC 10 at para 127 [ [NAME] ] ). [ 34 ] The Commissioner addressed [NAME]’s argument as follows: According to [NAME] erred in using the maximum penalty amount of $10 million dollars under s. 19(2) of the Act in its analysis. According to [NAME], it is inappropriate to use the $10 million maximum in this case because the loans affected by the non-compliant disclosure occurred predominately [ sic ] while the maximum allowable penalty per violation was $500,000. It is well-settled that a breach in disclosure requirements is present and continuing until corrected. The number of loans made, or frequency of the transactions, does not alter whether a violation has occurred and continues to occur until it is remedied. As the disclosure in question was not remedied until December 2022, the Violations were continuing after the new maximum penalty amounts had taken effect. Therefore, [NAME] correctly applied the maximum amount in force at that time in their analysis. [ 35 ] The Respondent submits that the Commissioner correctly found that a breach in disclosure requirements continued to exist after April 30, 2020, and remained ongoing until [NAME] corrected its disclosure statements. If the breach is considered continuing, then the Respondent argues that the amended AMP maximum is properly applied to a situation made up of a series of events whose legal effects straddle the date it came into force (citing Épiciers [COMPANY], division Éconogros v [NAME] , 2004 SCC 59 at para 46). [ 36 ] The temporal application of the amended version of subsection 19(2) of the [NAME] Act is a question of law, which means that the standard of review that applies is that of correctness ( Canada ([NAME]) v [NAME] , 2016 FCA 195 at para 24 [ [NAME] ]). [ 37 ] In order to determine whether the presumption against retrospectivity is “in play,” the recognized first step is to characterize “the situation [to] which the statute applies” ( [NAME] at paras 43-44 citing [NAME] v Canada (Secretary of State) , [1997] 1 SCR 358 at paras 45-46 [ [NAME] ]). This requires considering whether, in all of the circumstances, the legislative scheme attaches legal consequences to the past event or the current condition resulting from it ( [NAME] at para 127 citing [NAME] at para 46). Nowhere in the Decision did the Commissioner undertake this analysis; instead, the Commissioner focused on the fact that the breaches making up Violation 1 were continuing until remedied. Neither the Commissioner nor the Respondent cited any authority for this proposition and there is nothing in the language of subsection 19(2) of the [NAME] Act that justifies such a focus. [ 38 ] Rather, a purposive interpretation of the legislative scheme as [NAME] calls for, makes clear that subsection 19(2) of the [NAME] Act permits the imposition of an AMP for a “violation,” which in the case of Violation 1, is [NAME]’s failure to identify the $100 Statement Fee in the Information Box at the time it was provided to a [NAME] as required by subsection 436(1) of the Trust and Loan Companies Act and paragraph 6(2.1)(b) of the Regulations . Moreover, subsection 22(1) of the [NAME] Act states that “[e]very contravention or non-compliance that is designated under paragraphs 19(1)(a) to (a.2) constitutes a violation and the person that commits the violation is liable to a penalty determined in accordance with sections 19 and 20.” [ 39 ] I therefore find that the Commissioner erred in law by exclusively applying the post-April 30, 2020 maximum AMP of $10 million under subsection 19(2) of the [NAME] Act to Violation 1 when breaches that occurred before the amendment on April 30, 2020, should have been subject to the maximum penalties in force when they were committed ( [NAME] v Ontario Securities Commission, 2012 ONCA 208 at para 65). [ 40 ] Based on this finding, it necessarily follows that the Commissioner also erred in law by applying the current set of criteria in section 20 of the [NAME] Act to the 95% of Violations that occurred before these criteria came into force on April 30, 2020. (2) The exception to retroactivity tied to public protection does not apply [ 41 ] The Respondent argues that even if the Court finds an error in the Commissioner’s retrospective application of the AMP penalty maximum, the public protection exception to the presumption against retrospectivity applies (citing [NAME], The Construction of Statutes , 7d (Toronto: [NAME], 2022) at §25.07). [ 42 ] The Respondent has not made out this exception. The fact that a penalty seeks to promote compliance rather than punish, is not sufficient to apply a new provision retrospectively; rather, the public protection exception is only triggered where the design of the penalty itself shows that Parliament has weighed the benefits of such an application against the potential unfairness that would result ( [NAME] at para 50). There is no such indication in the amendment to subsection 19(2) of the [NAME] Act , which merely increases the maximum amount of the AMP. In the words of [NAME] , there is no clear nexus between the protective measure and the risks to the public associated with the prior conduct to which it attaches nor any attempt to tailor the measure to prevent risks prospectively ( [NAME] at paras 49, 50). (3) The Commissioner did not fetter her discretion in determining the amount of the AMP for Violation 1 [ 43 ] [NAME] submits that the Commissioner fettered her discretion in determining the amount of the AMP for Violation 1 in two ways: first, by following a “siloed” approach to the prescribed section 20 criteria for determining an AMP; and second, by applying the AMPF methodology too rigidly. [ 44 ] The AMPF provides as follows: Level 1 Level 2 Level 3 Harm (includes aspects of duration) Some harm Significant harm Very significant harm $0 to $2,000,000 $2,000,000 to $4,000,000 $4,000,000 to $6,000,000 Negligence/Intent (includes aspects of duration) Some negligence Significant negligence Very significant negligence or intent $0 to $500,000 $500,000 to $1,000,000 $1,000,000 to $2,000,000 Violation History Little to no history Significant history Very significant history $0 to $500,000 $500,000 to $1,000,000 $1,000,000 to $2,000,000 [ 45 ] [ADDRESS] has recognized that issues of fettering are not particularly amenable to a standard of review, and that a decision that is the product of fettered discretion should be set aside on the basis of a reviewable error regardless of the nomenclature that is employed to reach this result ( [NAME] v Canada (Citizenship and Immigration) , 2018 FC 1277 at para 16 citing [COMPANY] v Canada ([NAME]), 2011 FCA 299 at para 24). [ 46 ] I agree with the Respondent that there is no basis for [NAME]’s suggestion that the Commissioner fettered her discretion by following a siloed approach that looked at each of the prescribed criteria as a unique consideration giving rise to a specific portion of the AMP as dictated by the AMPF. While the AMPF itself is suggestive of such an approach, the Commissioner properly positioned the role of the AMPF and its use in her Decision when she stated: The publication of the Administrative Monetary Penalties Framework serves to appropriately inform regulated entities about how the legislative provisions will be applied by [NAME]. The result is a recommendation from [NAME] that is clearly articulated and against which the regulated entity has an opportunity to argue. The Commissioner’s discretion is unfettered by this process. [ 47 ] Accordingly, while the Commissioner considered the AMPF to be a transparent tool for use by the [NAME] and the regulated entity, she did not consider it to constrain her own decision making. She was also clearly mindful of her independent role in assessing an appropriate penalty to impose and she carried out her assessment in a manner that was separate and apart from [NAME]’s analysis under the AMPF, including by choosing not to impose an AMP for Violation 2 contrary to the [NAME]’s recommendation. [ 48 ] [NAME] also submits that the Commissioner unlawfully fettered her discretion by treating the AMPF as a rigid mathematical formula rather than as a non-binding guideline (citing [COMPANY] v Canada , 2016 FCA 143 at para 41 [ [NAME] ]) . [ 49 ] According to [NAME], section 20 of the [NAME] Act requires the Commissioner to consider each of the listed factors “in each case” ; however, by mechanically applying the formula outlined in the AMPF instead, and refusing to adjust the penalty in light of [NAME]’s particular facts and submissions, the Commissioner failed to exercise her discretion as Parliament intended, thereby fettering her discretion (citing [NAME] at paras 40-41) . [ 50 ] While I agree that it would be a reviewable error for the Commissioner to apply the AMPF in a rigid manner given that it imposes limitations not found in section 20 of the [NAME] Act , [NAME] has not shown on a balance of probabilities that the Commissioner fettered her discretion as it alleges. [ 51 ] First, [NAME] argues that the Commissioner fettered her discretion by following the AMPF which restricts the criterion of “duration” to considerations going to negligence and harm when there is nothing in the language of section 20 of the [NAME] Act which calls for such a limitation. However, a fair reading of the Decision shows that the Commissioner considered duration as a stand-alone factor. The fact that the Commissioner was of the view that the criteria of negligence or intent, and harm adequately captured the element of duration “in this case,” reflects the Commissioner’s proper consideration of the factors as applied to the unique set of facts before her. Her statement “there is no need for further consideration in reaching my conclusions regarding the amount of the penalties to impose,” further shows she did not feel constrained, let alone by the AMPF. [ 52 ] Second, [NAME] submits that the Commissioner’s s trict application of the AMPF prevented her from considering a reduction in the size of the AMP based on mitigating factors such as [NAME]’s compliance history and the low level of harm occasioned by the Violations, since the AMPF gives mitigating factors neutral treatment with no possibility that they can reduce the size of the AMP. Again, there is nothing in the Decision to suggest that the Commissioner felt constrained by the AMPF in the manner in which she treated the mitigating factor of [NAME]’s compliance history or the level of harm, and she was entitled in the exercise of her discretion to give a mitigating factor neutral treatment. [ 53 ] Finally, [NAME] submits that the Commissioner’s consideration of the “ability to pay” criteria failed to consider the disproportionate size of the AMP relative to its size and level of revenue and income. However, I can find no reviewable error related to the Commissioner’s exercise of her discretion in her rejection of [NAME]’s submission when she held: The question of proportionality is not whether the proposed penalty amounts are proportional to the size of [NAME], but whether they are proportional and appropriate to promote compliance. [ 54 ] The criterion of “ability to pay” is broadly worded and it was open to the Commissioner to interpret this criterion in this case in a manner that is consistent with the purpose of the AMP penalty as provided for in section 20.1 of the [NAME] Act to promote compliance with the consumer provisions. [ 55 ] Accordingly, I find that [NAME] has not shown that the Commissioner fettered her discretion in her consideration of the factors that must be considered in imposing an AMP for Violation 1. (4) [ADDRESS]’s exercise of its discretion to remit the matter back to the Commissioner [ 56 ] [NAME] submits that if the Commissioner is found to have erred in setting the AMP for Violation 1, then the Court should exercise its powers under subsection 24(3) of the [NAME] Act to vary the Decision by setting a revised AMP. [NAME] has proposed that the Court either limit the AMP to $200,000 on the basis that the first breach was in 2010 and “everything after that did not matter for the purposes of triggering the maximum,” or alternatively, by applying a formula it came up with that aims to reflect the percentage of breaches subject to the different maximums and which results in an AMP of $496,400. [ 57 ] The Respondent submits that the appropriate remedy would be to remit the matter back to the Commissioner for determination of the appropriate AMP. The Respondent cites [COMPANY] (RE/MAX Kelowna) v Financial Transactions and Reports Analysis Centre of Canada , 2024 FC 1996 and [NAME] as examples where the Court has previously declined to calculate penalties in statutory appeals despite having the power to do so under similarly worded provisions. I agree with this approach. [ 58 ] While subsection 24(3) of the [NAME] Act empowers this Court to step into the shoes of the Commissioner, this cannot be easily done. The selection of an AMP under subsection 19(2) of the [NAME] Act is a highly discretionary exercise that requires the Commissioner’s expertise in a specialized field of regulation as well as her understanding and experience in setting an AMP that is not punitive but instead promotes compliance with the [NAME] Act ( [NAME] at para 22). B. The Commissioner erred in approach to the statutory interpretation of Violation 2 [ 59 ] [NAME] argues that the Commissioner erred in two ways in determining that [NAME] committed Violation 2. [ 60 ] First, the Commissioner erroneously based her interpretation of paragraph 8(1)(p) of the Regulations solely on the purpose of the legislative scheme without considering the text of the provision. [ 61 ] Second, the Commissioner erred in finding that the $100 Fee Statement falls within a proper statutory interpretation of paragraph 8(1)(p) of the Regulations . [NAME] notes that paragraph 8(1)(p) refers to “a fee to discharge a security interest” and the Commissioner read words into paragraph 8(1)(p) when she found that the $100 Statement fee was a fee “ in relation to” the discharge of a mortgage. [NAME] submits that only the Administrative Discharge Fee is charged to discharge a mortgage, and this fee was properly disclosed. [ 62 ] The Respondent submits that the Commissioner correctly interpreted paragraph 8(1)(p) of the Regulations by focusing on its purpose and intent and she made no palpable and overriding error in finding on the evidence that the $100 Statement Fee falls within this provision given that it is always charged by [NAME] in order to discharge a mortgage. [ 63 ] I agree with the Appellants that the Commissioner erred in her approach to the statutory interpretation of paragraph 8(1)(p) of the Regulations, an error to which the correctness standard applies ( [NAME] at paras 8, 33). While the Commissioner purports to consider a “plain reading” of the Trust and Loan Companies Act and the Regulations , the Commissioner’s exclusive focus is on the context and purpose of the legislative scheme which emphasizes the importance of full disclosure and accountability. [ 64 ] The Commissioner’s approach is not in keeping with the modern approach to statutory interpretation and the “text as anchor” approach dictated by the Supreme Court of Canada in Quebec ( Commission des droits de la [NAME] et des droits de la jeunesse) v Directrice de la protection de la jeunesse du CISSS A , 2024 SCC 43 at paragraphs 23, 24. The Commissioner was required to consider the actual wording of paragraph 8(1)(p) and to consider its context within the legislative scheme including in relation to other provisions such as paragraphs 8(1)(k) and (q), which she failed to do. In fact, the Commissioner was dismissive of such an approach stating: No amount of parsing the language of the Regulations, or asserting that unrelated disclosures can be construed to cover this specific circumstance, changes the fact that the $100 Statement Fee was charged in relation to discharging a security interest and was not disclosed as such in the initial Disclosure Document. [ 65 ] As the Supreme Court of Canada warned: [ADDRESS] cannot disregard the actual words chosen by Parliament and rewrite the legislation to accord with its own view of how the legislative purpose could be better promoted ( Canada (Information Commissioner) v Canada (Minister of National Defence) , 2011 SCC 25 at para 40). [ 66 ] It is because Parliament’s choices must be respected, that this Court declines to consider whether Violation 2 falls within paragraph 8(1)(p) of the Regulations based on a proper statutory interpretation. To do so would be to usurp the role of the Commissioner who Parliament determined is best suited to determine Parliament’s intention based on the text, context and purpose of the provision given her expertise and experience. C. [NAME] was not denied procedural fairness [ 67 ] [NAME] submits that it was denied procedural fairness in relation to Violation 2 in two ways which were contrary to the standard [NAME] internal process as set out in the Supervision Framework. [ 68 ] First, it did not have advanced notice of the specific provision of the Regulations at issue in Violation 2 because a Notice of Breach was not issued prior to the Notice of Violation. Second, it was not given an opportunity to respond to the final Compliance Report because [NAME] issued the Notice of Violation and final Compliance Report on the same day. [ 69 ] The Commissioner addressed [NAME]’s complaint in the following manner: I am not persuaded that [NAME] has experienced a lack of procedural fairness in this proceeding. While a Notice of Breach may normally be issued prior to a Notice of Violation, and there is usually time elapsed between the issuance of the final Compliance Report and the issuance of the Notice of Violation, the fact that these circumstances did not occur in this case does not, by itself, give rise to a lack of procedural fairness in the conduct of this proceeding. The record before me shows that [NAME] had several opportunities to know the case against it and to present its views prior to the issuance of the Notice of Violation on April 5, 2023. [NAME] and [NAME] were actively engaged in discussing the issues giving rise to Violation 2, through calls and written exchanges, in late 2022. [NAME]’s position relative to s. 8(1)(p) of the Regulations was made explicit, and in writing, in January 2023. [NAME] also had the opportunity to provide detailed comments on excerpts from the draft Compliance Report, many of which were reflected in the final version. In any case, [NAME]'s concerns are not present in this proceeding. The Notice of Violation was issued in compliance with the Act and provides [NAME] with full detail of the case against it. [NAME] sought and received a 30-day extension in order to provide extensive written Representations relating to this proceeding, including on the Notice of Violation and final Compliance Report, all of which are included in the record before me. As a result, [NAME] had full knowledge of the allegations against it and was afforded sufficient opportunity to present its case, thus ensuring an appropriate level of procedural fairness. [ 70 ] The Commissioner clearly focused on the right question: whether [NAME] knew that there was an issue regarding the disclosure of its $100 Statement Fee in connection with a customer’s discharge of a mortgage and had a chance to respond to the issue. [ 71 ] Not only is the Supervision Framework promoted as describing the “[NAME] approach” to typical supervision matters, but it expressly provides that “[NAME] reserves the right to adjust its approach, as necessary.” Moreover, as the Respondent points out (and the Commissioner alludes to), a Notice of Breach is not required to be provided under the [NAME] Act and [NAME] was provided with the Notice of Violation, which is prescribed (see subsection 22(2) of the [NAME] Act ).

Accordingly, I see no basis for [NAME]’s suggestion that it had a legitimate expectation that the [NAME] would follow its process of issuing a Notice of Breach and Compliance Report prior to issuing a Notice of Violation to [NAME]. [ 72 ] There is no question that [NAME] understood the charge behind Violation 2 and was afforded a fair opportunity to respond to it despite not receiving a copy of the Final Compliance Report in advance. [NAME] has not highlighted any significant differences in the two reports nor has it suggested that it would have given a different response than it did to the draft Compliance Report.

VI. Conclusion [ 73 ] [NAME]’s appeal is allowed and pursuant to paragraph 18.1(3)(b) of the Federal Courts Act , RSC 1985, c F-7, this matter shall be referred back to the Commissioner for redetermination on the issue of the amount of the AMP for Violation 1 and on the issue of whether Violation 2 was committed as alleged.

JUDGMENT in T-2545-23 THIS COURT’S

JUDGMENT is that: The appeal is allowed. The decision of the Commissioner of the Financial Consumer Agency of Canada dated October 30, 2023 is set aside, and the matter is remitted back to her for redetermination on the issues of the amount of the administrative monetary penalty for Violation 1 and whether Violation 2 was committed as alleged; and [NAME] is awarded costs in the amount and on the terms agreed upon by the parties, which is $2,644.20 payable within 60 days with interest to accrue thereafter at a rate of 3% per annum. "Allyson Whyte Nowak" Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-2545-23 STYLE OF CAUSE: [COMPANY] v [NAME] OF CANADA PLACE OF HEARING: TORONTO, ONTARIO DATE OF HEARING: NOVEMBER 18, 2025

JUDGMENT AND

REASONS: WHYTE NOWAK J. DATED: JANUARY 15, 2026 APPEARANCES : [NAME] FOR THE APPELLANT [NAME] FOR THE RESPONDENT SOLICITORS OF RECORD : [COMPANY] and Solicitors Toronto, Ontario FOR THE APPELLANT [NAME] of Canada Toronto, Ontario FOR THE RESPONDENT