Report on Investigation — The Lobbying Activities of Mark Jiles

Findings

Report of the Investigations Directorate

The Investigations Directorate examined whether Mr. Jiles engaged in activities requiring registration as a lobbyist. Evidence was obtained from various sources, including federal public office holders, Mr. Jiles and his clients, supporting the following findings.

The State of Washington

With respect to whether Mr. Jiles undertook to arrange a meeting between one or more federal public office holders and representatives of the State of Washington, it is clear that Mr. Jiles and the Progressive Group entered into two contracts for services with the State of Washington Department of Community, Trade and Economic Development. Those contracts were for the periods May to September 2006 and January to June 2007. As the state's contractor, Mr. Jiles was described as being responsible for assisting the Washington State 2010 [Olympic] Task Force in developing relationships with stakeholder groups. The contract specified that the contractor was responsible for developing a 'Relations Building Program' with key business and government decision makers. The Honourable David Emerson, federal minister responsible for the 2010 Olympics, is listed as a key individual within targeted business, political and Olympic circles.

In May 2006, Mr. Jiles contacted Minister Emerson's ministerial assistant and asked her to meet with representatives of the State of Washington. The ministerial assistant met with a number of key officials from the State of Washington in the Minister's British Columbia regional office to discuss business opportunities in relation to the 2010 Olympics. A delegation from the State of Washington attended an event in Vancouver on October 18, 2006, that was coordinated by the Progressive Group and attended by a federal public office holder.

With respect to whether Mr. Jiles engaged in registrable lobbying activities for payment, the Investigations Directorate determined that the first contract for professional services between the Progressive Group and the State of Washington provided that the state would pay the contractor $15,000 in two $7,500 instalments on May 30 and June 30, 2006. Invoices sent from the Progressive Group to the attention of the 2010 Olympics Program Manager, State of Washington (CTED), are described as concerning the "monthly retainer for consulting services by Mark Jiles and Patrick Kinsella as per agreement (includes expenses). Contract No. 06-22107-003." The second contract for professional services provided for payment of $32,500 for the period from January 12 to June 30, 2007. The Progressive Group sent six invoices to the State of Washington, each of which requested payments of $5,416. The invoices submitted by the Progressive Group were described as: "monthly retainer for consulting services provided by Mark Jiles and Patrick Kinsella."

After completing an investigation of the activities of the Progressive Group on behalf of the State of Washington, and in respect of the 2010 Olympics, the Investigations Directorate concluded that Mr. Jiles, for payment, arranged one or more meetings between public office holders and his client and, therefore, engaged in activity requiring registration under paragraph 5(1)(b) of the Lobbyists Registration Act2. He was required under subsection 5(1.1) of the Lobbyists Registration Act to file a consultant lobbyist return not later than 10 days after entering into an undertaking, but failed to do so.

The Motion Picture Production Industry Association of British Columbia (MPPIA)

In the complaint received by my Office, it was alleged that the Progressive Group engaged in unregistered lobbying on behalf of the Motion Picture Production Industry Association of British Columbia (MPPIA). The Progressive Group described its retainer for the MPPIA during the period of July 2005 to March 2007, as follows: "to convince the Provincial government to extend the foreign tax credits and to convince the Federal Government to drop the idea of taxing residual profits on motion pictures made in Canada."

The MPPIA describes itself as "…a broad-based film and television industry association 80 members strong and growing." The organization represents participants in the motion picture industry in British Columbia. It has an interest in working with various levels of government in order to improve competitiveness.

The Canadian Audio-Visual Certification Office is part of Canadian Heritage and is responsible for co-administering, along with the Canada Revenue Agency, two tax credit programs related to the movie industry: the Canadian Film or Video Production Tax Credit and the Film or Video Production Services Tax Credit. Those tax credits exist to encourage Canadian programming, develop the domestic production sector and enhance Canada as a location of choice for film and video productions employing Canadians. The tax credits allow corporations to claim labour expenditures incurred on certain productions.

The residual tax issue deals with the tax treatment of income derived from repeat broadcasts of programs. In addition to fees for services, actors involved in productions are entitled to additional "residual" payments that are based on repeat broadcasts. The Canada Revenue Agency takes the position that residual payments made to non-resident actors are subject to Canadian taxation and may be deferred to subsequent years.

The Investigations Directorate sought to determine whether federal public office holders at the Department of Canadian Heritage, including the offices of the Minister and Deputy Minister, had information regarding communications or meetings arranged by Mr. Jiles concerning this issue.

In an interview conducted by the Investigations Directorate, the chairman of the Motion Picture Production Industry Association of British Columbia indicated that Mr. Jiles has been working for the MPPIA since 2005. He was retained to provide government relations services, mostly at the municipal, regional and provincial levels and to stay aware of issues at the federal level.

During the period from 2006 to 2007, Mr. Jiles' efforts were directed primarily at the provincial level until the issue of a residual tax became an area of interest. Mr. Jiles organized meetings on behalf of the MPPIA with a number of federal public office holders, including cabinet ministers Gary Lunn, Chuck Strahl and Vic Toews, and with the Director of Regional Affairs in Minister Strahl's regional office.

The Investigations Directorate's review of the proposals and agreements involving the Blue Stone Group and the MPPIA indicate that the Blue Stone Group had developed a government relations strategy for its client. In a letter from the Blue Stone Group dated July 7, 2005, Mr. Jiles proposed a program to assist the MPPIA with a government relations strategy "…to advance the MPPIA's business objectives within the various levels of government." The letter described the objectives of the strategy as being: renewal of tax credits; caucus relations; and, relationships with key stakeholder groups. That contract was subsequently renewed in order to maintain, as Mr. Jiles indicated in a letter to the MPPIA dated January 10, 2006, "…on-going relationships with key stakeholder groups." In that letter, Mr. Jiles indicated that "…the federal government, which within the next week could potentially be a new government, needs to be educated on the impact that a residual tax on productions would have on the industry."

Mr. Jiles proposed a further renewal of his existing agreement with the MPPIA in a letter dated January 15, 2007, in which he indicated that a "provincial and federal government relations and reception" plan was included among the objectives of his government relations strategy. He indicated that he sought to "…facilitate opportunities for MPPIA to develop important relationships with key individuals within targeted bureaucratic and political circles", among them key federal ministers with regional responsibilities for British Columbia.

The Investigations Directorate determined that meetings with federal public office holders were arranged on behalf of the MPPIA by Mr. Jiles. Those meetings included a meeting with the Regional Affairs Director for the Minister of Agriculture and Agri-Food Canada on June 7, 2006, which Mr. Jiles arranged, but did not attend. The meeting with a federal public office holder employed by the Minister of Agriculture and Agri-Food concerned issues concerning residual tax, immigration and border crossing. In that case, Mr. Jiles' role was limited to making the introduction. At the time of the meeting, the public office holder in question was the Director of Regional Affairs in the Vancouver office of the Minister of Agriculture and Agri-Food Canada.

On June 15, 2006, Mr. Jiles sent an email to his client containing an invitation to a breakfast with the federal Minister of Natural Resources, Gary Lunn. The meeting was scheduled to take place the following day in Vancouver. His client attended that meeting.

On November 7, 2006, Mr. Jiles sent an email to his client concerning upcoming meetings and a series of appointments, primarily with municipal or provincial officials, including a meeting with the Honourable Chuck Strahl, then Minister of Agriculture and Agri-Food Canada. The meeting with Minister Strahl took place on December 8, 2006, in the Minister's regional office and Mr. Jiles' clients had the opportunity to speak directly to Minister Strahl about issues of concern to the MPPIA. Mr. Jiles organized, but did not attend, the meeting.

In an email dated March 8, 2007, Mr. Jiles forwarded an invitation to attend a roundtable discussion with the Minister of Justice and Attorney General of Canada, Vic Toews. The meeting took place on March 12, 2007. The discussion, organized by the British Columbia Institute of Technology Foundation, was described as an opportunity for British Columbia Institute of Technology executives and board members, and a small group of businessmen, to have an exchange with the Minister regarding matters of interest. His client attended that meeting.

The British Columbia minister's regional office plays the role of facilitator by connecting people in British Columbia with the government in Ottawa. The Investigations Directorate found that Mr. Jiles helped facilitate meetings between the minister's regional office and representatives of the British Columbia film industry. Those meetings involved issues such as the treatment of foreign workers in Canada and means of encouraging the American industry to film in Canada. Other meetings were on the issue of temporary workers and were within the jurisdiction of the Department of Human Resources and Skills Development (HRSDC). Mr. Jiles did not attend each meeting, but he did arrange the initial meeting on behalf of his clients.

The Investigations Directorate interviewed Mr. Jiles regarding the allegation that he conducted unregistered lobbying activities on behalf of the Motion Picture Production Industry Association of British Colombia (MPPIA). Mr. Jiles explained that he was paid to provide advice to the MPPIA on provincial issues. He indicated that he accompanied the chairperson of the MPPIA to meet with federal staff who wanted to establish a relationship with the industry.

After completing an investigation of the activities of Mr. Jiles on behalf of the MPPIA, the Investigations Directorate concluded that Mr. Jiles, for payment, arranged one or more meetings between public office holders and his client and, therefore, engaged in activity requiring registration under paragraph 5(1)(b) of the Lobbyists Registration Act3. He was required under subsection 5(1.1) of the Lobbyists Registration Act to file a consultant lobbyist return not later than 10 days after entering into an undertaking, but failed to do so.

Registration

Mr. Jiles was not registered as a consultant lobbyist for either the State of Washington or the Motion Picture Production Industry Association of British Columbia when the activities described in this report took place.


2 and 3 – The Lobbyists Registration Act, in effect during the period covered by this report, was amended and renamed the Lobbying Act by the Federal Accountability Act, S.C. 2006, c. 9. The amendments came into force on July 2, 2008. Return to reference 2 Return to reference 3