Lobbying Legislation in Canada: Ensuring Transparency
Remarks at the Johnson-Shoyama Graduate School of Public Policy
October 27, 2011
Address by Karen E. Shepherd
Commissioner of Lobbying
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I am pleased to be here today to discuss the key elements of the Lobbying Act and to answer any questions you may have about the federal lobbying regime.
It is important to recognize that the idea of lobbying is not new. It has probably been around for as long as government has existed. In fact, I would suggest that we constantly lobby those around us on a daily basis, whether it's our friends, our parents, or others, on a multitude of issues.
At the Federal level there were a number of attempts to ensure that government decisions were not made behind closed doors. In Canada, from 1965 to 1985, several Private Members' bills were introduced in Parliament to bring transparency to government decision-making.
The Private Members' bills were not successful. It wasn't until the government committed to this initiative that there was real movement in terms of lobbying regulation. The first Lobbyists Registration Act came into force in 1989. While the Act has been amended three times since it was first introduced, including the introduction of a Lobbyists' Code of Conduct in 1997, the basic goal of the Act has not changed – ensuring transparency in the lobbying of federal public officials.
In Canada, in addition to the federal legislation, several provinces have also implemented lobbying legislation. The first province was Ontario, which adopted a lobbying law in 1999, British Columbia in 2001, Quebec and Nova Scotia followed the next year. Newfoundland and Labrador brought in legislation in 2004, and finally, Alberta in 2007.
Manitoba also has enacted legislation, but it has yet to come into force. That's right – Saskatchewan is one of the three provinces (along with New Brunswick and Prince Edward Island) that do not have lobbying legislation. At the municipal level, the city of Toronto has a registry of lobbyists and, in Quebec, municipalities are covered by the provincial legislation.
Provincial lobbying legislation has been, in large part, modelled on the federal legislation. Although there are differences across jurisdictions, many of the lobbying laws in place in Canada are founded on the same four overarching principles that form the preamble of the federal Lobbying Act.
First, these principles recognize the fact that we live in a democratic society where free and open access to government is an important matter of public interest. As such, and that is the second principle, lobbying public office holders is a legitimate activity. Third, it is desirable that public office holders and the public be able to know who is engaged in lobbying activities. Finally, the system for registering paid lobbyists should not impede free and open access to government.
For my part, having been involved in the making of public policy at the federal level for many years, I believe that exposure to various points of view is key to effective policy making and better decision-making, but it is important that it be conducted in a transparent way. This openness helps to improve the confidence Canadians can have in the integrity of federal government decision-making processes.
As I mentioned earlier, the Canadian federal lobbying legislation has been modified several times since it first came into force in 1989. The most recent amendments came in 2008, as part of the Federal Accountability Act. At the time, the Lobbyists Registration Act was renamed the Lobbying Act, and the position of Commissioner of Lobbying was created. As an independent Agent of Parliament, I report directly to both houses of Parliament, rather than through a Minister of the Crown.
In case this is of interest, the other independent Agents of Parliament at the federal level are:
- the Auditor General;
- the Chief Electoral Officer;
- the Official Languages Commissioner;
- the Privacy Commissioner;
- the Access to Information Commissioner; and, finally,
- the Public Sector Integrity Commissioner.
I was appointed Canada's first Commissioner of Lobbying in June 2009 for a term of seven years. My mandate is threefold:
- establishing and maintaining the Registry of Lobbyists;
- ensuring compliance with the Lobbying Act and the Lobbyists' Code of Conduct; and,
- developing and implementing outreach and education programs to explain the requirements of the Act [Note to KES: refer to this presentation as an example of outreach].
I am fortunate to be supported by a strong and professional team of 28 employees.
I will now turn to the key elements of the Lobbying Act.
The key place to start is with a definition of lobbying. Lobbying is defined in the Lobbying Act as communicating with a public office holder, for payment, in respect of:
- The development, introduction, defeat or amendment of a legislative proposal, bill or resolution;
- The making or amending of a regulation; and,
- The development or amendment of a policy or a program;
These refer to what I like to call "changing the state of play".
The Lobbying Act also considers communications about financial benefits, such as the awarding of a grant or a contribution, to be lobbying.
For consultant lobbyists (and I will explain in a minute who they are), there is also the requirement to register if they arrange a meeting between their client and a public office holder, or if they meet with public office holders regarding the awarding of a contract.
At the federal level, there are two main categories of lobbyists – consultant lobbyists, and in-house lobbyists.
Consultant lobbyists are the types of lobbyists we think of most often. They are individuals who are generally self employed or who work for firms specialized in the fields of government relations, law or strategic advice.
Consultant lobbyists are paid to either communicate directly or arrange meetings with public office holders on behalf of their clients.
The second category, in-house lobbyists, are employed either by corporations, which are for-profit entities, or by non-profit organizations, to communicate with public office holders on their employer's behalf.
The Lobbying Act specifies that, for organizations and corporations, the need to file a registration with the Registry of Lobbyists is triggered when the lobbying activities of employees constitute a significant part of the duties of one person's time. The concept of "significant part of duties" is common to many other pieces of lobbying legislation in Canada. At the federal level, it has long been interpreted to be 20% of the duties of one person. This is a key aspect of the current legislation, and you will hear me refer to it in several different contexts.
It takes two parties for lobbying to occur. You now know what lobbying is and I have explained who is doing the lobbying. The other side of the coin, of course, is the individuals the lobbyists are communicating with – the public office holders.
Under the Lobbying Act, public office holders essentially include all federal government officials, whether appointed or elected. This broad category includes not only federal government employees, but also Members of Parliament, Senators, parliamentary staff, as well as members of both the Canadian Armed Forces and the Royal Canadian Mounted Police.
In 2008, the Lobbying Act introduced a sub-category of public office holders, referred to as "designated" public office holders. As I've mentioned, the Lobbying Act is about transparency. Therefore, knowing who is meeting with the most senior decision makers, and how often, is key.
The Act defines designated public office holders as the Prime Minister, Ministers and their staff, Deputy Ministers, and Assistant Deputy Ministers. The Act also gives the Governor in Council the authority to designate other individuals as designated public office holders though regulation.
This has happened on two occasions. In 2008, regulations were introduced to add 11 other positions or classes of positions to the group of designated public office holders, the majority of which are senior positions in the military.
In September of 2010, the regulations were amended to include Members of Parliament and Senators.
Lobbyists are required to disclose detailed information about their activities when they file an initial registration with the Registry of Lobbyists.
This information includes:
- Who lobbies for which firms, corporations, organizations or associations;
- A general description of the subject matter of the lobbying activities, as well as details such as the title and description of the bill, policy or program;
- Which Government of Canada departments or agencies are being contacted;
- The names and descriptions of the specific legislative proposals, bills, regulations, policies, programs of interest or what grants, contributions or contracts are being sought; and,
- For former public office holders turned lobbyists, which positions they have held within the Government of Canada before they started lobbying.
Once received by my Office, lobbyists' registrations are reviewed by our advisors to ensure they contain all the information required by law. This information is then made available online to the public, via the Registry of Lobbyists, which is accessible 24 hours a day, seven days a week.
In addition to filing an initial registration, as I just described, lobbyists must also update the information contained in their initial registration if required on a monthly basis (they have started lobbying a different government department for example). They also have to disclose if lobbying activities have terminated. Finally, each month, they must disclose any "oral and arranged" communications with designated public office holders.
Monthly communication reports filed by lobbyists receive a fair bit of attention, so I would like to talk a bit more about them. If the communication concerned the awarding of a financial benefit, including a grant, a contribution, or a contract, it does not matter who initiated it, the lobbyist must disclose that it took place. If it involves other registrable topics that don't include 'money', then it is only reportable if the lobbyist initiated the contact.
Reporting these communications and updating information in the initial registration ensures that the information contained in the Registry of Lobbyists is both accurate and current.
As I have indicated, initial registrations include a wealth of information about the lobbyists and their activities. Monthly communication reports disclose fewer details.
That said, I believe that monthly communication reports increase transparency. The media, for example, often include information from the registry about who has met with whom.
- They include:
- The date of the communication;
- The name and position title, or military rank, of the designated public office holder;
- The government institution of the designated public office holder; and,
- The subject-matter of the communication – for example industry, environment or health.
The disclosure of information about lobbying activities is a key feature of the Act to achieve greater transparency and accountability. As a result, the public perception may be that individuals who lobby federal public office holders must be registered to be in compliance with the Act. The reality, however, is that compliance with the Lobbying Act does not necessarily require registration. Let me explain.
As I've mentioned, the need to register is triggered when the "significant part of duties" test is met, that is when the 20% threshold has been reached. In other words, it is quite possible that some individuals may be lobbying, as defined in the Act, without having to register, because the entity (organization or corporation) does not meet the threshold.
Volunteers, as they are not paid, do not have to register to be in compliance with the Act. This means that volunteers working for a small local association are allowed to lobby to obtain a grant for a project under a federal program without having to register. The same is true for private citizens who communicate with Members of Parliament to advocate changes to specific legislations on their own behalf.
Certain communications, such as oral or written submissions to Parliamentary committees or simple requests for information, are also not considered registrable activities under the Lobbying Act. Employees or representatives of other levels of government are also exempt from registering when they communicate with federal public office holders.
The onus to register and report lobbying activities rests with the lobbyists. However, there are a few clauses that apply specifically to designated public office holders. First, when asked by me, they are required to verify the completeness and accuracy of information submitted by lobbyists through monthly communication reports.
Second, in 2008, the Act introduced a five-year prohibition on lobbying for former designated public office holders, to ensure that senior-level public office holders do not use advantages and personal connections derived from their government positions for lobbying purposes.
As a consequence, for a period of five years after leaving a designated public office holder position, individuals cannot work as consultant lobbyists, cannot work as lobbyists for a non-profit organization, and cannot work for a corporation if lobbying constitutes 20% or more of their individual duties.
The Lobbying Act provides me with the authority to grant these individuals an exemption from the five-year prohibition, if to do so would not be contrary to the purposes of the Act. You might imagine that it would be easy for me to thwart the will of Parliament by granting every exemption request. For this reason I grant exemptions on an exceptional basis only. When I do grant an exemption, I am required by the Act to make public the names of the individual and the reasons why I have granted the exemption. Our website contains a section for this, where you can see the four exemptions I have granted since the Act came into force in July 2008.
My mandate also includes the administration and enforcement of the Lobbyists' Code of Conduct. The Code has been in place since 1997. It is not a statutory instrument; meaning failure to comply carries no possible jail terms or financial penalties. The sanction at my disposal is that I am required, at the end of an investigation, to table a Report to Parliament. I did so three times last year, finding that three different lobbyists had breached the Lobbyists' Code of Conduct.
The Code contains three principles and eight separate rules that lobbyists must abide by to assure Canadians that lobbying is done ethically and according to the highest standards.
Although the interpretation of some of the rules has changed over time, the principles and the rules of the Code have remained the same since they came into force. The three principles are: Integrity and honesty; Openness; and Professionalism.
The eight underlying rules provide detailed requirements for lobbyists' behaviour in specific situations. For instance, lobbyists must identify themselves and state their purpose when communicating with public office holders. They must also provide accurate information and disclose their obligations, under the Act and the Code, to their client or employer. Lobbyists must not divulge confidential information and must not use insider information obtained during their lobbying activities to the disadvantage of their client or employer.
Finally, lobbyists must not represent conflicting or competing interests without the informed consent of those involved. They must not place public office holders in a conflict of interest.
Consultant lobbyists shall also advise public office holders that they have informed their clients of any actual, potential or apparent conflict of interest.
One of the Code's rules that is receiving a fair bit of attention relates to improper influence (Rule 8), which reads:
Lobbyists shall not place public office holders in a conflict of interest by proposing or undertaking any action that would constitute an improper influence on a public office holder.
A 2009 Federal Court of Appeal decision changed the interpretation of conflict of interest to include not just a real conflict of interest, but also the appearance of one. Following this, I issued guidance, in line with the decision, to help lobbyists understand this new interpretation. In addition, I issued further clarification related to political activities. With this information, I believe lobbyists have the tools they need to help them avoid a real or apparent conflict of interest.
I am of the view that political activities and registrable lobbying activities are both legal and legitimate. The issue of conflict of interest, and the application of Rule 8 arises when the two intersect. A real or apparent conflict of interest may occur when a person engages in political activities that advance the private interest of a public office holder, while at the same time, or subsequently, seeking to lobby that public office holder, or, in the case of a Minister or Minister of State, the department or agency for which they are responsible.
I take all alleged breaches of the Lobbying Act or Lobbyists' Code of Conduct seriously. I can initiate a review based on a complaint or on my own initiative.
My first step when I decide to look into an alleged or suspected breach of either the Act or the Code, is to initiate an Administrative Review. These reviews are preliminary fact-finding exercises, during which investigators assess allegations. The objective of a Review is to provide me with sufficient information and analysis to help me determine if a formal investigation is necessary to ensure compliance with the Act or the Code.
In some cases it is. In other cases, I may choose, rather, to educate a registrant about his or her obligations under the Act, or ask that an error or omission be corrected. Fairness is important to me and the means of ensuring compliance must be proportionate to the nature and the gravity of the alleged offence.
The Act requires that investigations must be carried out in private. In some instances, allegations are in the public domain. In these instances, I will confirm in front of parliamentary committees that I am looking into the matter. No other details are provided in accordance with the Act and to protect the integrity of the investigation.
When determining whether an investigation is necessary to ensure compliance with the Act or the Code, I consider factors such as:
- the nature and the gravity of the breach;
- the length of time that has elapsed since the alleged offence occurred;
- , the degree of negligence displayed by the lobbyists;
- the lobbyist's compliance history; and
- the potential impact on public trust in the integrity of government decision-making.
Formal investigations are undertaken when the nature and the gravity of the alleged offence requires more than a simple correction or a clarification. If, during the course of an investigation, I find that there are reasonable grounds to believe that an offence has occurred, the Lobbying Act requires me to suspend the investigation and refer the matter to the RCMP.
If the RCMP decides not to pursue the file it is returned to me and I decide if I have sufficient grounds to continue with a Code investigation.
At the conclusion of an investigation, the Act requires me to report my findings and conclusions in a Report for tabling in the Senate and the House of Commons.
As you may have noted from what I've said, the only options available to me are referrals to the RCMP, education and monitoring (for lesser transgressions), and reports to Parliament. I see a need for a more flexible continuum of enforcement provisions in the Lobbying Act.
The Lobbying Act does set out penalties that may be imposed upon conviction for a breach of the Act. The maximum fine is as high as $200,000, and jail sentences may be up to two years. No one has ever been convicted.
The Lobbying Act is currently being reviewed by Parliament. I appeared before the House of Commons Standing Committee on Access to Information, Privacy and Ethics in March 2011 to discuss my experience in administering the Act. Overall, the legislation is working well. Approximately 5,000 lobbyists disclose information about their lobbying activities. That said, my experience in administering the Act has suggested ways the legislation could be amended to bring even greater transparency and better allow me to administer the Act.
In terms of improving transparency, I have recommended that Parliament consider removing the 'significant part of duties' registration threshold, with consideration given to including some exemptions for, say, charitable organizations.
Removing the 'significant part of duties' threshold from the Act would accomplish several things:
- I believe that confusion would be reduced about who has to register. With clearly stated exemptions, the rule would be: if you are not exempt, and you undertake registrable lobbying activities (i.e. communicate with public office holders about certain topics, for payment): Register! Calculating time spent would cease to be necessary.
- More communications between lobbyists and designated public office holders would be disclosed in the registry. If an organization or corporation is not required to register because the lobbying activities of their employees do not meet the 'significant part of duties' threshold set out in the Act, meetings between employees of that organization or corporation and designated public office holders are not disclosed. No initial registration means monthly communication reports are not filed as they are not required.
Beyond recommending the removal of the 'significant part of duties' provision in the Act, I made a number of other recommendations that I believe would improve transparency. I would like to discuss three of those with you.
First, I recommended that for the purposes of monthly communication reports, lobbyists should be required to report all 'oral' communications, whether arranged in advance or not. This would reduce the confusion about what encounters should be reported, and would have the benefit of capturing 'chance encounters' between designated public office holders and lobbyists.
Second, organizations and corporations are now required to list only the name of the most senior officer when filing a monthly communication report. In many cases, the most senior officer is not even present during the communication. I believe it would be more transparent if the name of the employee who is present during the communication were also included as part of the communication report.
Third, I recommended that the exemption from reporting communications initiated by designated public office holders when they do not concern money be removed. This would ensure that all communications between designated public office holders and lobbyists are transparent.
In terms of enforcement, even with tough penalties set out in the Act, no charges have been laid. It is clear to me that even minor transgressions, such as habitual late filing, may negatively affect the transparency of lobbying activities. In order to deal with such transgressions, the Lobbying Act currently offers no enforcement alternatives.
My experience points to the need for a system of administrative monetary penalties, which would provide me with penalty options somewhere between my current practice of education, correction and monitoring for less serious transgressions and the more severe options, including Reports to Parliament and referrals to the RCMP.
I have therefore recommended that Parliament amend the Act to provide me with the authority to administer monetary penalties as a means of ensuring compliance.
An administrative monetary penalty system could potentially address the lack of flexibility in terms of enforcement options currently provided for in the Act. Not all transgressions have the same gravity. An administrative monetary penalty system would introduce a continuum of progressively more severe sanctions more appropriate to the existing range of possible breaches. Publicizing administrative monetary penalties applied would also serve as general deterrent to all lobbyists.
In conclusion, I realize I have given you a great deal of information. I invite you to visit our website, which contains a wealth of information. I encourage you to search the Registry of Lobbyists to get a first hand experience. The Registry is the key source of information on lobbying activities in Canada – who is communicating with public office holders and who may be trying to influence public policy debates and government decisions.
Thank you again for your attention. I would now be pleased to answer your questions.