Canada: Changes to the "Lobbying Act"

The purpose of this bulletin is to highlight two significant changes to the law in regards to lobbying the Government of Canada. The Government has passed a new regulation, which expands the definition of a Designated Public Office Holder to now include every member of the House of Commons and Senate, as well as certain staff in the Office of the Leader of the Opposition in both the House of Commons and the Senate. The change came into effect on September 20th, 2010.

The second notable change relates to the Lobbyists' Code of Conduct, and more specifically, the types of political activity which would violate Rule 8 of the Code. The Commissioner for Lobbying has now issued two guidance documents that clearly indicate that the Commissioner sees certain political activities engaged in support of a politician, whom they are also lobbying, as an improper influence.

Regulations Amending the Definition of a Designated Public Office Holder – September 20, 2010

As stated above, the Government passed a regulation, pursuant to the Lobbying Act, which expanded the definition of Designated Public Office Holder. Up until September 20th, a designated public office holder included a minister, any member of the minister's exempt staff, a deputy minister, associate deputy minister, assistant deputy minister, or the equivalent, as designated by regulation.

The Lobbying Act requires that oral and arranged communication with a Designated Public Office Holder, including meetings and telephone calls, be reported 15 days after the end of the month in which the communication occurred. This is commonly referred to as the Monthly Reporting Rule. This requirement added an extra level of transparency that went beyond the semi-annual reports and updates required in law by the Lobbying Act for all lobbyists.

These monthly reports show which lobbyists are meeting with which designated public office holders, i.e. ministers, and senior public officials and, for what purpose. As a result of the new recent regulation, these reports must now also include meetings with members of parliament, whether in Government or the Opposition, as well as the staff of the leaders of the Opposition in the House and in the Senate. The immediate effect will be to put an extra reporting burden on all lobbyists, whether consultant lobbyists, or in-house lobbyists. The readers of this bulletin are encouraged to speak with legal counsel if they have any questions in regards to the application of the expanded rule.

Commissioner's Guidance on Conflict Of Interest – Rule 8 (Lobbyists' Code of Conduct)

The Lobbying Act makes provisions for a Lobbyists' Code of Conduct, which those involved in lobbying must follow, or be in breach of the Act. Rule 8 of the Lobbyists' Code of Conduct states "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."

In 2002, the former Ethics Counselor received a number of allegations that registered lobbyists had breached the Lobbyists' Code of Conduct by lobbying a federal department at the same time that they were involved in assisting the Minister responsible for that department on a possible bid for the leadership of a political party.

The Ethics Counselor, formerly the person responsible for overseeing Canada's lobbying regime, issued a set of guidelines entitled "Rule 8 – Improper Influence – Lobbyists and Leadership Campaigns" (the "2002 Guidelines"). The Guidelines became the subject of a decision of the Federal Court of Appeal in 2009, in which the Court held that the Guidelines were unreasonable.

Following the decision, in November 2009, the current Commissioner of Lobbying issued a revised set of Guidelines. The Commissioner's Guidance reads, in part, as follows:

A lobbyist may be in breach of Rule 8 if:

  • The lobbyist's actions create a real conflict of interest for a public office holder, or
  • The lobbyist's actions create the appearance of a conflict of interest for a public office holder.

While the determination of what constitutes an improper influence upon a public office holder remains a question of fact in each case, the Commissioner's Guidance states:

Depending on the specific circumstances, a competing obligation or private interest could arise from factors such as, but not limited to:

  • the provision of a gift, an amount or money, a service, or property without an obligation to repay
  • the use of property or money that is provided without charge or at less than its commercial value
  • political activities.

The Guidelines further explain that "lobbyists should endeavour to conduct themselves in the highest ethical manner thus avoiding situations which could create real or apparent conflict of interest for a public office holder." The Commissioner then lists three examples of activities that might create an improper influence: gift, money, or political activities. Some have argued that the Guidance document essentially suggests that political activities are akin to a monetary gift or bribe.

The Guidance documents issued by the Commissioner became the focus of criticism from industry stakeholders, academics and other interested parties. For its part, the Canadian Bar Association issued a public legal opinion which argued that the constraints imposed on political activities were unconstitutional. By way of response, the Commissioner issued a further clarification to her original Guidelines on July 23, 1010.

The clarification states that political activities should be considered along a spectrum from a low degree of involvement to a high degree of involvement. Political activities by a lobbyist that are characterized as entailing a low degree of involvement include voting in an election, placing a sign on a lawn, attending a fundraising event, such as a barbeque or golf tournament, or donating money to an election campaign, within the contribution limits established in the Canada Elections Act.

Political activities that would be considered as entailing a high degree of involvement include being a member of a public office holder's constituency association, organizing a fundraising event, or participating in a campaign for the election of the public office holder. The Commissioner has indicated that these types of activities could put the lobbyist in breach of the Code of Conduct.

While the clarification document provided additional insight into the Commissioner's thinking on this issue, it did not satisfy her critics. Many continue to believe that the limits imposed on political activity are unlawful. The Commissioner's position is that she is not restricting political activity, but rather the Guidelines merely restrict lobbying activity by those who are politically active. The debate surrounding this issue will likely have to be settled by the Federal Court in the context of some future case.

The suggestion, however, that the Commissioner will retroactively look at an individual lobbyist's political activities will likely cause most active lobbyists to shy away entirely from any active political activity in the future, and will limit any individuals, currently actively involved in the political process, or those who may become so engaged, from engaging in any lobbying activity with that MP in the future. Until the matter is settled, lobbyists should be extremely careful about the type of political activity they undertake.

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