Canada: Federal Committee Recommends Stronger, Broader Lobbying Act – Impact On Every Business Or Association That Deals With Government Of Canada

Last Updated: May 29 2012
Article by Guy W. Giorno

A parliamentary committee is recommending significant changes to Canada's Lobbying Act.  The proposed reforms would strengthen enforcement, remove the current exemption for companies and organizations that lobby infrequently, and impose new restrictions on the conduct of lobbyists.

Under the committee's proposals, corporate CEOs would remain strictly liable for the registration of company employees who lobby. The recommended changes would affect every business and association that deals with Canadian federal government officials.

In its May 14 report, Statutory Review of the Lobbying Act: The First Five Years (PDF), the House of Commons Standing Committee on Access to Information, Privacy and Ethics makes eleven recommendations that will significantly affect federal lobbying in Canada. Those recommendations are outlined below.

(The Committee report does not recommend a change to the list of activities that constitute lobbying. For details of the current list, please jump to the section, "What is Lobbying?")

Remove the Minimum Threshold for Reporting In-House Lobbying

Currently, not all lobbying by employees of companies and associations must be registered and reported.  Registration is only required if the total amount of lobbying by all the employees of a corporation or organization exceeds a minimum threshold. The minimum threshold is the equivalent of 20 per cent of one employee's time, or 0.2 FTE. Lobbying below that amount does not need to be disclosed.1

The committee proposes to remove that minimum threshold. The result of this amendment would be that any amount of lobbying by employees would be subject to registration and reporting.

At present, many companies whose employees engage in federal lobbying do not register because their lobbying falls short of the 20-per-cent threshold. Under the proposed change, the CEOs of these companies would all be required to file lobbyist registrations for their employees.

In one respect the proposed reform will make compliance more straightforward, because corporate CEOs will no longer have to calculate whether employees' lobbying falls above or below the 20-per-cent threshold.

Administrative Monetary Penalties

The committee recommends that the Commissioner of Lobbying receive the power to impose fines on lobbyists and CEOs, for breaches of both the Lobbying Act and the Lobbyists' Code of Conduct.

At present, contraventions of the Act must be addressed by prosecution. Since 19892 there have been several police investigations into alleged contraventions, but nobody has ever been charged with an offence under the federal Lobbying Act.

Under an Administrative Monetary Penalty regime, infractions could be dealt with either by prosecution or by monetary fine imposed by the Commissioner (but not both). If this reform is adopted, the Commissioner can be expected to utilize the new power to issue fines for late registration, failure to file registrations, violation of the Lobbyists' Code of Conduct, and other infractions

The bottom line, if this proposal is accepted, will be that companies can expect to see increased enforcement of the Act and, for the first time ever, real consequences for breaching the Act and the Code.

New Restrictions on Lobbying

The committee also recommends that the federal Act adopt some of the ethical rules found in various provincial lobbying statutes.

Specifically, it proposes that:

  • lobbyists be prohibited from giving gifts to the government officials whom they lobby;3 and
  • an individual or entity be prohibited from lobbying the government on a subject matter, if it has a contract to provide advice to a public office holder on the same subject matter.

Keep and Strengthen the Five-Year Lobbying Ban

Some witnesses before the Committee had urged reducing or weakening the current prohibition that prevents former designated public office holders from lobbying for five years after they leave federal office.

Committee members rejected advice to weaken the five-year ban. Instead, they are making several recommendations to strengthen it:

  • The five-year ban would be extended to former civil servants of Director General rank and higher. Currently the ban applies to former officials of Assistant Deputy Minister rank and above.
  • During the five-year period, former designated public officer holders would be prohibited from engaging in any amount of lobbying. Currently a former designated public office holder is permitted to engage in in-house lobbying only, for corporations only, if the lobbying does not consume 20 per cent (or more) of his or her time.

Greater Disclosure in Lobbying Returns

The Committee also makes several recommendations to increase the amount of information that must be included in the monthly reports of lobbying activity:

  • Monthly reports would cover all communications with public servants at or above the Director General rank. (Currently the cut-off is the Assistant Deputy Minister rank.)
  • Monthly reports by corporate CEOs would contain the names of all the company employees who met with designated public office holders. (Currently the monthly reports name the government officials but not the company employees who met them.)

Other Recommendations

The Committee proposes to simplify the reporting requirements for corporate directors, association directors, partners and sole proprietors, by allowing them to be registered as in-house lobbyists instead of (as at present) consultant lobbyists.

This means that directors and partners will be registered on a single return with others from the same company or organization, rather than having to file separate, individual returns.

If adopted, this recommendation would eliminate red tape for directors and partners, while maintaining or increasing the level of transparency and disclosure of their lobbying activities.

The Committee also recommends that the Act be amended to address a "potential loophole" in the federal law: While the CEOs of corporations and associations are legally required to register the names of employees who lobby, there is no sanction for an employee who chooses to lobby when the employee knows that the CEO has not registered him or her.

To close this potential gap, the Committee specifically recommends that "in-house lobbyists [be required] to file a registration, along with the senior officer of the company or organization."

If the principle of this recommendation is accepted, then the simpler, more streamlined solution might be simply to make it an offence for an employee to engage in lobbying if the employee knows that his or her CEO has failed to register the employee.  This is the approach taken by the lobbying transparency laws in Alberta, Newfoundland and Labrador, the Province of Quebec, and the City of Toronto.

Next Steps

Under Standing Order 109, the Government is required to submit a response to the Committee report within 120 days.

The Government has discretion to decide how thorough and detailed its response will be (e.g., a detailed report that responds to the Committee recommendation-by-recommendation, or a general letter, or an interim response).

The Minister responsible for the Government response (in this case, the President of the Treasury Board) must secure Cabinet approval of the response prior to submitting it.4

What is lobbying?

The Committee report does not recommend a change to the list of activities that constitute lobbying.

For employees of a corporation or association, the Lobbying Act applies to communication with a federal office holder in respect of:

  • the development of any legislative proposal,
  • the introduction of any bill or resolution in either House of Parliament or the passage, defeat or amendment of any bill or resolution,
  • the making or amendment of any regulation,
  • the development or amendment of any policy or program of the federal Government, and
  • the awarding of any grant, contribution or other financial benefit by or on behalf of the federal Government.

For consultants (non-employees) the list also includes communication in respect of the awarding of any contract by or on behalf of the federal Government and arranging a meeting between a federal public office holder and any other person.

Footnotes

1. The 20-per-cent threshold only applies to in-house lobbying. There is no minimum threshold for reporting consultant lobbying. Any amount of consultant lobbying, no matter how small, is subject to registration and reporting.

2. The Lobbyists Registration Act (the original name of the Lobbying Act) came into effect in 1989.

3. The committee specifically proposes, "an explicit ban on the receipt of gifts from lobbyists." [emphasis added]  However, if this recommendation is implemented, it seems more likely that the Act would prohibit lobbyists from giving gifts (instead of, or in addition to, prohibiting public officials from accepting gifts.) In fact, the acceptance of gifts is already restricted by the Conflict of Interest Act, among other rules.

4. This is accomplished by drafting a Memorandum to Cabinet and bringing it forward for Cabinet approval.

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