Canada: Canada´s Federal Accountability Act and Its Impact on Lobbying

Last Updated: August 28 2006
Article by Sean Moore

Canada is about to significantly increase the reporting requirements for all corporate and consulting lobbyists active at the federal level as the new Conservative Government's top legislative priority is one step closer to a fait accompli with the approval by the House of Commons to what the Harper Administration calls the Federal Accountability Act. (FAA).

Formally entitled " Bill C-2, an Act providing for conflict of interest rules, restrictions on election financing and measures respecting administrative transparency, oversight and accountability."), the FAA was passed by the House of Commons on June 21. It now is off to the Senate which will undertake more than a week of hearings on the legislation in mid-September.

The FAA provides for a new Lobbying Act which will replace the 17 year old federal Lobbyists Registration Act . The new lobbying law will require consultant lobbyists, as well as corporations and associations that have their own in-house registered lobbyists to report the particulars of all communications with those deemed Senior Public Office Holders (i.e. Ministers, ministerial political staff, Deputy Ministers and Associate and Assistant Deputy Ministers - but, notably, not MPs, Senators or mid-level bureaucrats). Under the current law, individual politicians, political staff and bureaucrats contacted by lobbyists do not need to be identified by name and only twice-yearly registration updates are required.

The FAA creates for the fist time a legislative regime governing the ethical conduct of public office holders, both during and after employment. It introduces much tougher post-employment restrictions on former government officials. Former "Senior Public Office Holders" (including members of any government "transition team") will be prohibited from acting as lobbyists for five years following their departure from government service.

The Act finishes the job started two years ago when the previous administration moved to significantly reduce what corporations and unions can spend on political donations. The FAA's amendments to the Canada Elections Act will entirely prohibit all manner of cash and in-kind donations by corporations, unions and associations to candidates, political parties and party leadership aspirants at the federal level. (Two Canadian provinces , Manitoba and Quebec , similarly ban corporate and union political donations.) Maximum personal political donations are also being further reduced from $5400 per party per year to a maximum of $1000 per calendar year to each political party, leadership contestant, nomination contestant, or candidate or a particular party

The FAA also creates a number of new independent "officers of Parliament" all of whom will be vested with substantial investigatory powers. For example, the new Commissioner of Lobbying will be empowered to investigate any and all allegations of non-compliance with the Lobbying Act . Those found guilty of an offence under the Act could face maximum fines of $200,000, up to two years of jail time in addition to having their right to be a registered lobbyist suspended for up to two years. The new law also prohibits the use of contingency (or "success") fees by lobbyists at the federal level.

The Federal Accountability Act also makes substantial changes to the country's Access to Information Act, broadening its reach to include several large Canadian Crown corporations and federal foundations which were previously exempt from the ATI law.

It also broadens the scope of powers and range of activities for the Auditor General of Canada. For example, the Auditor General will be able to to audit recipients of government funding (i.e. grants and contributions to corporations, non-profit groups and charities). The new legislation also creates the position of Procurement Auditor whose duties include reviewing fairness, openness and transparency in departmental procurement practices and reviewing complaints regarding the awarding or administration of contracts.

The part of the FAA with the greatest significance for - and potential impact on - corporations and others who lobby the federal government is the new reporting requirement concerning contact with senior government officials.

"Senior Public Office Holders" (SPOHs - Ministers, their political exempt staff, Deputy Ministers, Associate and Assistant Deputy Ministers) are likely to be motivated to have fewer meetings and less overall contact with "lobbyists" and others who communicate with them on public-policy matters. With the new requirement that registered lobbyists must report monthly (to a searchable data-base) all their "planned" communications with senior public office holders, those SPOHs will be mindful that such postings will undoubtedly prompt a wide variety of competing groups to insist on the same opportunity to meet with SPOHs. In many cases, the tendency will be to instruct lower level officials (i.e. Directors-General, Directors etc) to take meetings with officials in lieu of SPOHs.

For many companies and industry associations, the FAA's provisions are necessitating an overall reconsideration of how they manage their relationships with the Government of Canada and how they engage in public-policy advocacy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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