The amendments will broaden the scope of lobbying activities requiring registration and significantly change the registration requirements in respect of in-house lobbyists employed by corporations.
Amendments to the federal Lobbyists Registration Act (LRA) that received Royal Assent on June 11, 2003 will be proclaimed into force as early as April or May, 2005. Draft regulations to the LRA were published for comment on December 18, 2004. When the regulations are finalized, the relevant amendments to the LRA will be proclaimed in force. The period for public comments ends February 16, 2005. This Osler Update will address the principal effects of the amendments upon corporations.
The key changes introduced by the amendments include:
1. The scope of lobbying activities giving rise to a registration requirement will be broadened.
- Before the amendments, only communications "in an attempt to influence" a federal public office holder gave rise to a registration requirement. In future, a registration requirement can arise merely from communicating with a federal public office holder, whether one seeks to influence the public office holder or not.
- Formerly, any communication with a public office holder "in direct response to a written request from the public office holder for advice or comment in respect of a matter" was exempt from registration. It was felt that this exemption was open to abuse, and it will be eliminated. Instead, communications made to a public office holder that are restricted to a request for information will be exempt.
2. The registration requirements applicable to corporations’ in-house lobbyists will be amended significantly:
- Under the amended LRA, a corporation will be required to register when it employs one or more individuals any part of whose duties includes lobbying, and (i) those duties constitute a significant part of the duties of one individual, or (ii) would constitute a significant part of the duties of one employee if they were performed by only one employee. The office of the Lobbyists Registrar takes the position that a corporation will be required to register when (i) the total time spent lobbying by all paid employees of the corporation adds up to 20% or more of a hypothetical single employee’s time over the previous six months,1 or (ii) if a senior officer contacts a public office holder on a matter that constitutes a lobbying activity, whether or not the total time spent lobbying by all paid employees adds up to 20% or more of a hypothetical single employee’s time. Thus, in the view of the office of the Lobbyists Registrar, a single contact by such a senior officer will trigger the requirement to register. The office of the Lobbyists Registrar has stated that this is an area on which it would appreciate input from those potentially affected.
- Responsibility for complying with the registration requirement will no longer rest with the senior officer or employee doing the lobbying. Rather, the most senior officer of the corporation who is compensated for his or her duties (generally, the chief executive officer) will be required to register on the corporation’s behalf.
- The registration will need to provide the names of all senior officers and their direct reports within the corporation any part of whose duties include lobbying, as well as the names of any other employees who lobby as a significant part of their duties. In addition, the registration will need to include a description of any former public offices held by the individuals named on the registration.
- The registration will need to be filed within two months of the date that the requirement to file it first arises and, if lobbying is ongoing, a renewal registration that satisfies the same disclosure requirements will need to be filed every six months to ensure that the register is correct and up-to-date.
- If the registrar requests clarification of information provided in a registration, the most senior officer of the corporation who is compensated for his or her duties must provide the registrar with the requested information within 30 days of the request.
3. The definition of "organization" in the amended LRA will now include a trust. Since the registration requirements applicable to corporations will conform with the registration requirements applicable to organizations, trusts will be subject to the same registration requirements as corporations.
Consultant lobbyists who engage in lobbying activity on behalf of a corporation or organization (including a trust) will remain responsible for their own registrations.
What Corporate Officers and Directors Need to Know
Corporate directors should be aware that the office of the Lobbyists Registrar has taken the position that outside directors (i.e, directors that are not employed by the corporation) that are remunerated by the corporation that engage in lobbying activities are subject to the registration requirements applicable to consultant lobbyists. Conversely, where the Chair or an inside director that is employed by the corporation engages in lobbying activities, the Chair or inside director will be considered to be an in-house lobbyist employed by a corporation for purposes of applying the registration requirement.
In our experience, responsibility for government relations most often rests with the vice-president of public affairs, government relations or communications. Nonetheless, it will generally be the chief executive officer, as the most senior compensated employee, who will now be required to make the certification that the information in the registration "is true to the best of my knowledge and belief." In-house counsel, as well as senior officers and other employees who spend a significant part of their time lobbying, will want to alert your chief executive officer that he or she will now have to certify the information provided in the lobbyist registration.
1.In the view of the office of the Lobbyists Registrar, the number of hours or days that would constitute 20% of a hypothetical employee’s time is a question of fact. Application of the 20% threshold is left to the corporation itself to calculate on the basis of the amount of time that would reasonably occupy 20% of the time of a hypothetical single employee of that corporation.
Michael Gough is a partner in Osler's Toronto office, where he specializes in government relations, public law and regulatory affairs. Robert Gates is an associate in the firm's national Tax Department in Toronto. Norman Loveland is the Chair of the firm's Tax Department and managing partner of our Montreal office.
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