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Federal prosecutors are arguing that cruel and unusual punishment can be justified in some circumstances as they defend a Conservative-era law that imposes a financial penalty on all convicted criminals, no matter how poor.

The mandatory victim surcharge was a centrepiece of the Harper government's push to give more rights to victims and fewer to accused and convicted offenders.

It sparked a rare judicial rebellion, with judges in several provinces evading it by giving offenders up to 99 years to pay, charging as little as 30 cents or simply ignoring it.

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The prosecutors' defence of the mandatory surcharge – an argument deeply at odds with the current government's approach to the penalty, and to the Charter itself – came in a hearing at the Ontario Court of Appeal this week.

Several convicted people are challenging the legality of the mandatory surcharge, saying it violates their Charter right to be free from cruel and unusual punishment, among others.

Related: Federal prisons have become less deadly, crowded under Liberals, numbers show

A lawyer for four of them, Daniel Santoro, cited the case of Shaun Michael, a 26-year-old of Inuit background who faced $900 in surcharges for nine offences after resisting arrest while intoxicated; his income was $250 a month. The surcharge is $100 for each summary (minor) offence, and $200 for each indictable (serious) offence. The money is to be set aside for victim services.

The federal prosecution service operates independently from the justice minister to prevent the possibility of political interference. But the minister retains authority to have the final say, and the case raises questions about when that power should be used.

Last October, the Liberals introduced a bill that would give judges back the discretion over the surcharge that the Conservatives took away in the fall of 2013, when the surcharge became mandatory. Justice Minister Jody Wilson-Raybould referred to the judicial rebellion in a November speech in which she explained the reasons for her government's proposed law. The Liberal bill has not been debated or studied yet in Parliament.

If the prosecutors succeed in their argument that governments may justify cruel and unusual punishment in some circumstances, the ruling could be used to defend practices up to and including torture. Canadian courts have never found a law to be cruel and unusual treatment and then upheld it as a reasonable limit on a Charter right.

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Under the Charter's Section 1, the government may seek to justify limits on rights, and courts must decide whether the limits are reasonable.

The prosecutors say the law is fair because those who cannot pay can be given extra time, and cannot be jailed for not paying.

Their argument quotes Conservative justice minister Peter MacKay, who called the surcharge a "modest financial penalty." They also cite a Quebec Court of Appeal ruling that upheld the law. But if the Ontario appeal court finds the mandatory surcharge to be cruel and unusual punishment, it can still find that law to be "justified in a free and democratic society," the federal prosecutors said in a legal filing.

Edward Tinker, who pleaded guilty to uttering a threat and breach of probation, faces a surcharge of $200 in the case before the appeal court. He has heart disease and cancer, has a monthly income of $1,200 and pays rent of $950. The surcharge could hang over his head forever, denying him a chance at a pardon, his lawyer said.

"If it's cruel and unusual punishment, it can't be proportionate," Mr. Santoro said in an interview.

Peter Hogg, a scholar whose textbook Constitutional Law of Canada is often cited by the Supreme Court in its rulings, recalled speaking with Pierre Trudeau, father of the current Prime Minister and the politician who initiated the Charter, about the protection against cruel and unusual punishment. The two men had been on a 1982 panel at Osgoode Hall Law School in Toronto, and afterward, they chatted.

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"He said, 'You know, I think Section 12 might be the only absolute right.' I remember agreeing with him."

The federal position at the court hearing comes as the 1982 Canadian Charter of Rights and Freedoms nears its 35th anniversary on April 17. Ms. Wilson-Raybould, in a speech last week, called herself an "ambassador of the Charter."

"Since my appointment as Minister of Justice and Attorney-General of Canada, I have sought to frame my role and my responsibility as 'ambassador of the Charter.' It is a way of signalling that the Charter is, for our government, not a constraint on the actions we take under threat of judicial review, but rather a guide for a recognition of rights culture within the activity of government."

But on the mandatory-surcharge case, a spokesman for her office said the Public Prosecutions Service of Canada is independent from the Attorney-General. The spokesman noted that last May, the Attorney-General's department withdrew its own direct involvement in the case, in which it had defended the surcharge.

The Public Prosecution Service said on Thursday it needed more time to respond to questions from The Globe and Mail about its position in the case and its relationship to the Attorney-General.

The prosecution service's independence is not absolute, according to information on its website. "It is quite appropriate for the Attorney-General to consult with Cabinet colleagues before exercising his or her powers … in respect of any criminal proceedings. Indeed, sometimes it will be important to do so in order to be cognizant of pan-government perspectives."

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Prime Minister Justin Trudeau's mandate letter for Ms. Wilson-Raybould included an instruction to review the government's litigation strategy. "This should include early decisions to end appeals or positions that are not consistent with our commitments, the Charter or our values."

The appeal judges reserved their decision.

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