A modest proposition
I have never paid for sex; I have never been paid for sex; and, to my knowledge, I do not personally know anyone who has done either. Therefore, my opinions about last year’s Supreme Court of Canada (“SCC”) decision to strike down Canada’s prostitution laws, and my views as to what to do about it, are based purely on an attempt to apply my knowledge as a lawyer and a recovering economist. The opinions presented herein are my own, and just my attempt to provide, in a logical and coherent manner, a potential, partial solution to a classic “law & economics” problem.
Since the SCC’s Bedford decision last December, Canada’s entire domestic supply of pundits have sounded off on the case and issues, and legislation has been tabled in parliament. However, I have yet to read anything that deals with what economists would call the “externalities” or the negative consequences of the prostitution issue, while also respecting the fundamental freedoms that are inherent in a free and democratic society.
The current government’s position is not only doomed to failure, it is objectively evil (not as in “bad from any moral perspective” but actually “evil” as objectively defined). In my opinion, the federal government of Canada should be focusing on the cash. Making sex-for-cash (and/or sex-for-drugs) transactions illegal would make involvement in “the business” far less desirable for organized crime and would also allow police to deal with the street crime, violence and urban blight that accompany the day-to-day activities of desperation/addiction level prostitutes and the Johns who prey on them. At the same time, leaving prostitution legal (which it has always been in Canada) and removing the restrictions on “living off the avails” “keeping or being found in a bawdy house” and “communicating for the purpose” legal so long as payment is electronic and traceable (i.e. all payments by credit cards and debit cards), is a modest proposition upon which to start a reasonable and coherent dialog.
SCC Case and Proposed Legislation
In Bedford, a unanimous SCC held that the subsection 210(1) (keeping or being in a bawdy-house), 212(1)(j) (living on the avails of prostitution), and 213(1)(c) (communicating for the purpose of prostitution) provisions of the Criminal Code were all in violation of section 7 of the Charter and could not be saved under section 1 as being “demonstrably justifiable in a free and democratic society”. The SCC shifted the onus of regulating aspects of prostitution back to the federal government. Parliament has until December 2014 to issue a legislative response.
The federal government recently introduced legislation that will overhaul Canada’s prostitution laws. Under this legislation, selling sex remains legal, but buying it becomes a criminal offence. It will also be illegal for anyone to communicate for the purpose of prostitution and prohibits advertising the sexual services of others.
The government believes that the bill will protect vulnerable women and keep communities safe by allowing prostitutes to rent apartments, screen clients, hire a receptionist or security guard, and advertise their own services. However, sex workers disagree, stating that because buying sex remains a criminal offence (and hence even though selling is legal, they are still “conspiring to buy” as a party to that transaction) the new law will drive prostitutes even further “underground”, leaving them at risk from violence and exploitation.
The bill is being read this week, which is why I am sounding off on the topic. Regardless, according to virtually all of the experts consulted, the law as proposed likely won’t withstand Charter scrutiny. Just to be clear, my discussion revolves around the changes to the Criminal Code, and not the government’s proposal to spend $20m per year on helping people leave “the game”. This is one aspect of their proposal that is not stupid, except for the fact that, as the Chief of Police in Calgary (among a great many others) pointed out this week, the amounts are woefully inadequate.
I have travelled enough to have seen lots of sex for sale, and have seen evidence of the world’s oldest profession plied in a variety of countries, places and circumstances. I have also read in the press about how these issues are handled in other countries such as Holland, Germany, certain counties in Nevada (legalized, regulated), and Nordic (purchasing is illegal, but selling is legal). Both of these options have their advocates and critics.
The Nordic model of making the purchase of sex illegal is basically going after the “Johns” or purchasers of sex rather than the sellers. The advantage is that this has an immediate impact of making it easier for the cops to conduct sweeps and keep the Johns away from the known “walks”. According to its critics, however, this model does not change the fundamentals of the human condition. If some people have money and want sex, and other people need money, the most desperate will sell sex. So criminalizing the Johns just drives the trade, particularly the most desperate and vulnerable people plying the trade, underground and into the arms of organized crime. While it does clean up the streets, it won’t make prostitution go away.  Never has. Never will.
However, the bigger issue with the “Nordic Model”, particularly when being proposed by the Conservatives, is that the Nordic Model’s effectiveness (if it works, of which I am doubtful) depends on the overall Nordic social and economic model. Lets not forget that in Nordic countries, taxes are very high, and distribution of funds to the less economically efficient members of society is much more generous relative to Canada. Costs of basics such as food and shelter are higher because of regulations and market controls. So people have less disposable income but also less needs-driven desperation, which cuts down on both demand for, and supply of, prostitution. More importantly, Nordic attitudes towards sex are much more liberal than they are in Canada; those societies have been described as “post-religious”, particularly with regard to sexuality. The upshot is that there is also a lot less demand because there is a lot more “free sex” available. In other words, either we go “all in” for the Nordic model, or we don’t. And I think the Conservatives would have very serious problems with most of that agenda.
The “legalize and regulate” model tends to recognize the realities of the reproductive urge and money combined with the iron laws of supply and demand. Legalizing brothels, “living off the avails” and “communicating for the purpose” makes the women (and men) at the “high end” of the trade (those who sell themselves “voluntarily”) safer and more able to run their businesses as safe, clean, professional, tax-paying businesses. But the devil is in the regulation. The fundamental problem with legalization is the street level consequences: it will now be easier and safer for organized crime to effectively grab women and girls (and boys), drug them up, and enslave them for profit. It will also make it easier for the most vulnerable, the “subsistence and addiction” level people to continue to “sell sex, buy drugs, repeat until death”.
So thanks to the SCC our quiet, safe Canadian streets are about to get a lot seedier and a lot more dangerous unless something is done. If anyone thinks that the women who were (and continue to be) preyed on by serial killers such as Robert Pickton will end up in nice, safe, clean, well lit, climate controlled brothels, they are fooling themselves. Those women were far too desperate, drugged up and disorganized to be able to keep anything resembling a real job, even in a bawdy house.
If anyone thinks that organized crime will not move in on even a nice, safe, clean, well-lit climate controlled brothel (or dark dank dungeon, depending on taste), they are also fooling themselves. Organized crime will move in, not just because brothels are profitable, but because they are the ultimate “cash business” money laundering machine. Think about it – gangsters could run unlimited amounts of cash proceeds of other crime through a bawdy house because “Hey, a bunch of guys from ABC paid us $$$ each to have XYZ done to/with/on them by [fill in the rest of it yourself…]; who knew that was a thing?”. So prostitution, if simply made legal, would be perfect methodology for laundering a massive never-ending flow of untraceable criminal cash.
The Government’s Objectively Evil Non-solution
The law proposed by the government is also objectively evil. Objectively evil? That sounds like moralizing doesn’t it? Not if you define “evil” as “knowingly doing something that will benefit yourself with the concurrent knowledge that it will cause death and misery for others”.
The Conservative government’s proposed solution to ban the purchase of sex is moralistic, so it will both shore up the base (and facilitate fund-raising) among religious social conservatives, while at the same time allowing them to paint the Liberals and NDP as “pro-pimp”/”pro-human-trafficking” if they oppose the government’s position. Moreover, the ban against “communicating” will also negatively impact the papers that carry a lot of advertising for local providers of sexual services. Since many of these papers tend to be left-wing and devoutly anti-Tory, the government also gets to muzzle antagonistic press.
But the core of the evil stems from the fact that the Prime Minister (and no one who knows how this government works would ever imagine that this law was not created in the PMO) knows that the law his government is proposing will not work. It is one thing for a lawyer to think that a law will solve problems. It is reasonable for an engineer to believe he or she can McGyver a better mousetrap to make things better. It is laudable for a psychologist, or a teacher or a minister of religion to believe that people can be improved, human nature can be fixed and that we can change the way the world works. But the PM is an economist, and we do not think that way. For an economist to propose a solution that attempts to undo the inexorable laws of supply and demand is as farcical as a physicist suggesting that childhood injuries could be ended if we legislatively repealed gravity on playgrounds.
So the PM knows better. Mr. Harper knows that the proposed law will only drive prostitution underground and further into the clutches of organized crime. Moreover, any economist would know that if governments ban transactions that will happen regardless, then the premium on facilitating that transaction will rise (= drug dealing, gangsters during the US Prohibition period etc.), making pimping, trafficking humans and exploiting the vulnerable all the more profitable. And every economist will know that if greater profits available for pimping, then greater exploitation and violence to expand and protect those profits will follow as certain as day follows night.
So Mr. Harper, our prime minisiter, has proposed a law that will help him politically while further harming the people he is pretending to help. And that is, without question, objectively evil.
What can be Done?
So how do we as a society make our streets and children safer while still allowing for the rights and freedoms that the SCC so clearly cherishes? First of all, we need to recognize and accept that prostitution was, and always has been, legal in Canada. The laws as they stood were merely a very blunt and ineffective form of regulation designed to mitigate the worst of the social ills traditionally associated with prostitution (i.e. externalities). The reality is that the SCC has categorically concluded “the regulations are not working, and may be counter-productive in that they are causing more harm then they reduce.”
I do not disagree, but I think the SCC was overly swayed by the arguments of the articulate empowered women who brought the case, and did not sufficiently take into account the voiceless and powerless women who will be out on the street tonight and every night regardless of what the law is … or is not.
So let’s talk about proper regulation. First of all, when I think of a brothel run by organized crime in which girls and boys are enslaved by drugs and kept in line by violence, the first thing comes to my mind as a lawyer would be violations of: 1) Employer Health & Safety Act; 2) Workman’s’ Compensation Act; 3) Labour Standards Act; 4) Tax evasion, pursuant to the Income Tax Act, and also GST/HST/PST/QST violations!; 5) Anti-Money Laundering Act; and a lot of other regulatory crimes and misdemeanors (and municipal by-law violations galore!). Not to mention the assault, drug dealing etc. which remain against the Criminal Code.
All of these laws carry huge fines and the potential for jail-time in Canada, if they are enforced. So we do have a lot of rules in place that would prevent the worst-case scenario from happening if we used all of the tools at society’s discretion in an intelligent, dedicated and coordinated manner. And if anyone believes that we will be able to marshal and co-ordinate the enforcement effort required to do so, you are clearly fooling yourself. And if you believe that we would be able to effectively pursue prosecutions of all of the above-mentioned crimes in an efficient manner, then you have never dealt in any way with the Canadian criminal court system. The biggest weakness of our system is that someone has to testify. Drugged up emotionally damaged people do not make good witnesses, even if you can get them to testify, which they will refuse to do anyway. So without some further laws and regulations, we will not be able to control the worst of the externalities related to prostitution.
However, as a lawyer and economist, I have a proposition that would deal with most of the street-level ills. I propose that the law make the purchase and sale of sex for cash (or barter), the communication in public for the sale of sex for cash (or barter), and living off the avails of a cash-for-sex transaction illegal. I would also make the acceptance of cash (or barter) at a bawdy house illegal (among many other health, safety and employment standards regulations). Credit and debit transactions will be allowed, just no cash.
I would also make each of these offenses subject to a mandatory minimum for each offense, which must be concatenated rather than served concurrently, up to the maximum limit of the offense. In English, what I am saying is that if the penalty is “two years less a day” for each offense on the first offense, then I would make the first series of offenses each subject to a mandatory minimum sentence of six months, up to a maximum of two years less a day if you were facing, in this example, four or more charges at the same time. I would also make these offenses “non-bailable”. And I would suggest we keep doubling the maximum penalty for each conviction or pack of convictions.
In other words, if a John buys sex for cash, and a pimp takes the cash involved, the John, the girl (or boy) and the pimp are all going to jail until trial, and for a long time after that as well. However, there would be a “get out of jail” card available; full immunity from prosecution for testimony against a pimp. Effectively I would also make, by law, the “living off the avails” of cash-for-sex transactions the ultimate offense for which the Crown prosecutors would be required to “trade up” for if at all possible.
Cash is King
In a nutshell, I would increase the penalties, and make the pimping the focus, which just makes sense because it would put the focus on the actual problem. But why would I make the cash the illegal part? Because crime follows cash; cash is king, and the only currency acceptable.
If all the transactions were made by credit card or by debit, then there is a clear record of where the money is coming from and going to (no gift cards or pay as you go credit cards either, unless they are registered in a specific person’s name and tied to an account). Criminals hate being tracked, and will go a long way to avoid transactions that can be followed. And criminals really hate heavy penalties for participating in clearly traceable transactions.
With today’s technology, sex workers could use their phones to take credit, so we would not be unduly restricting the “upscale” trade. If anything, we would be helping those working at the top end of the market because, although organized crime would love to get a hold of credit card information, the bad guys would not want to be anywhere near a business that gets all of its money via clearly traceable transactions. Just as for the movies at hotels, there is no need for the card statement to show exactly what was bought.
Kick them in the Cash
However, by keeping cash-for-sex illegal (along with barter for drugs, alcohol, etc.), the street level trade would remain largely illegal as it is today. You can’t buy drugs on the street with a credit card. The cops could keep the streets clean just by posing as Johns (and prostitutes) like they do today, only insisting on cash transactions. Anyone agreeing to accept or pay cash goes to jail. No excuses, no exceptions. Street prostitution would fall off a cliff because addicts do not want to go to jail because it can force them to go cold turkey and Johns would not want to have to sit in jail until trial.
It would also be easier to convict pimps for “living off the avails” than it is today. The cops could also just mark (or scan) the bills from ATMs nearby “walks”. So John gets cash, buys sex for cash, prostitute accepts cash, pimp takes cash from prostitute. Cops film transactions in progress, pick up pimp, scan bills; pimp goes away. No need for the John or prostitute to testify because it is the cash itself that is the proof of the crime. Of course, organized crime would eventually work out cut-outs and runners and ways to keep it flowing, but making the form of transaction the crime kicks the gangsters and pimps where they hurt; right in the cash.
Due to the SCC’s decision, the federal government was faced with the enormous problem of protecting the rights and freedoms of those who chose of their own free will to sell their bodies (if there is such a thing), while at the same time protecting the most vulnerable among us from the most predatory of our society. Unfortunately, the proposed legislation falls well short and will push sex workers into the clutches of organized crime, while at the same time helping the political fortunes of the governing party, and is therefore objectively evil.
Although it is an incomplete solution to an intractable problem, in my opinion, making cash-for-sex transactions illegal, and thereby making prostitution as unpalatable as possible for organized crime and equally problematic for desperation/addiction level prostitutes and the Johns who prey on them, is a modest proposition upon which to start an intelligent and coherent dialog.
Focusing on pimps, organized crime, desperation/addict prostitutes and their cash economy would target the actual problems, without unduly restricting the rights and freedoms of anyone not causing negative externalities. Such a law would also have a much better chance of withstanding constitutional scrutiny by passing the “demonstrably justifiable in a free and democratic society” test in section 1 of the Canadian constitution. Legalizing prostitution, so long as it was tightly regulated, would still not be very pretty, but it would not be objectively evil.
By Jonathan Garbutt, Barrister & Solicitor, with research assistance from Raminder Pandher, Student-at-Law
All opinions contained herein, are my own.
 Canada (Attorney General) v Bedford, 2013 SCC 72 [Bedford].
Externalities result from the consequences of an economic activity that is experienced by unrelated third parties; it can be either positive or negative.
House Government Bill – Bill C-36 – First Reading (41-2) http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&DocId=6646338&File=33&Col=1#.U72UZ1HXeoI.twitter
 See http://www.cbc.ca/news/politics/prostitution-bill-likely-unconstitutional-mps-told-on-day-3-of-hearings-1.2700922 and http://www.ctvnews.ca/politics/prostitution-bill-offends-the-charter-legal-experts-say-1.1902206