The federal government will give judges discretion to tell impoverished criminals they do not have to pay the victim surcharge that is required of people convicted of committing an offence.

Judges currently can raise the surcharge but they may not cancel it in cases where convicts have no means to pay. That has created what one judge called "a tax on broken souls." In some cases, judges have ignored the law by refusing to order the surcharge be paid, or have set it at a nominal rate well below the mandatory threshold established by Parliament.

The victim surcharge has also led to a number of challenges under the Charter of Rights and Freedoms on behalf of offenders who could have an unpaid fee hanging over their heads in perpetuity.

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Justice Minister Jody Wilson-Raybould introduced legislation on Friday that will give judges limited discretion to waive the victim surcharge in cases where paying it would pose an economic hardship – or when it is simply impractical because the criminal has no money.

"I believe, and this legislation bolsters the reality, that we need to provide some discretion to judges having regard to the individual circumstances of the offenders that appear in front of them," Ms. Wilson-Raybould told reporters. "Imposing a victim surcharge on somebody that is a marginalized person, that has an absolute inability to pay because of their financial circumstances, whether that be homelessness or not being employed, does not bolster a fair justice system."

The surcharge was made mandatory by the Conservative government in 2013. It amounts to 30 per cent of any fines imposed by the court or, if there is no fine, a penalty of at least $100 for each summary conviction and at least $200 for each indictment. That money is used to pay for services for victims and their families.

The current law does give judges the choice of allowing an offender to work for credits to pay off his or her debt. But not all provinces have that sort of program in place and some say it would be too expensive to establish.

The surcharge forces offenders to take some responsibility for the impact of their crimes on victims, said Ms. Wilson-Raybould. For that reason, it will remain in place in most cases and judges who waive the penalties will be required to explain their decisions.

But the fact there is no means test for the victim surcharge has created situations like that of Shaun Michael, a homeless Inuit man living on $250 a month, who faced $900 in surcharges for resisting a police officer's attempt to apprehend him when he was grossly intoxicated. In that case, Justice David Paciocco of the Ontario Court of Justice in Ottawa ruled the surcharge to be cruel and unusual punishment, and therefore unconstitutional – a ruling that was subsequently overturned by a higher court.

Anthony Moustacalis, the president of the Criminal Lawyer's Association, welcomed the proposed change, saying it would fix what has become a difficult situation.

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But Rob Nicholson, the Conservative justice critic who served as justice minister for several years when his party was in power, said he believes a mandatory victim surcharge is a good thing.

"The Conservative party believes that the victims should always be the central focus of the criminal justice system," he said. "I think she [Ms. Wilson-Raybould] should have just left it alone, I think the system has worked well, that's the bottom line.