A corporate CEO has a conversation with a senior politician. They discuss a proposed change in government policy. The executive lays out her case.
"If you do this," she says, "you'll force us to close our plant in your riding. Hundreds of your constituents will lose their jobs."
The meeting ends. Months later, the proposal is quietly shelved.
Must the CEO register as a lobbyist? What if it was the politician, not the CEO, who asked for the meeting?
Since taking office last year, Canada's Liberal government has announced a variety of task forces, advisory processes, and study groups. The issues to be considered range from defence procurement to marijuana legalization to broadcasting regulation. Businesses and other organizations will be invited to participate, as they are in similar processes at the provincial and municipal levels.
If your organization takes part in a stakeholder consultation or some other advisory process, you may have registration and/or reporting obligations under federal, provincial, or municipal lobbying law. This is the case even if you never actually have a one-on-one meeting with a public office holder; even informal communications – such as at a social gathering – may constitute lobbying under federal, provincial, or municipal law.
In this eAlert, we review the lobbying rules that apply to organizations as stakeholders.
- Communications in direct response to a written request from a public office holder for advice or comment are generally exempt from lobbyist registration. Note, however, that this is not the case federally; such communications may still trigger a corporate registration obligation under the federal Lobbying Act, even if they do not need to be reported on a month-to-month basis.
- Communications on the public record are not considered lobbying, but communications behind closed doors may be.
- Under federal, Ontario, Québec, British Columbia, and Alberta law, an organization must only register when its employees undertake a certain amount of lobbying in a given time period. In Toronto, Hamilton, Brampton, and Ottawa, there is no such threshold – an organization must register, depending on the jurisdiction, before or soon after any lobbying takes place.
We will review the rules that apply: (1) federally; (2) in Ontario; (3) in Ontario municipalities that require lobbyist registration; (4) in Québec; (5) in British Columbia; and (6) in Alberta. If you are lobbying in another Canadian jurisdiction, separate registration rules may apply. It is prudent to seek the advice of counsel before participating in a stakeholder consultation or other advisory process anywhere in Canada.
Under federal law, most stakeholder consultations and advisory processes will entail lobbying, as defined in the federal Lobbying Act. Participation in these government-initiated communications may require an organization to register with the Lobbying Commissioner, even if the particulars of such participation need not be reported on a regular basis.
If your communications with federal public office holders are limited to proceedings on the public record, then the Act does not apply to you. Nor does it apply to communications regarding the enforcement, interpretation, or application of an existing law or regulation with respect to you or your organization, or to simple requests for information.
But most stakeholder consultations happen off the record. Most advisory processes entail discussions about proposed laws, policies, and regulations, not existing ones. These discussions will often fall within the Lobbying Act's broad definition of lobbying.1 Participating in them may require your organization to register with the federal Lobbying Commissioner, even if individual meetings need not be reported on a month-to-month basis.
The Lobbying Act requires a corporation or organization to register when the amount of time that its employees collectively spend on federal lobbying adds up to the equivalent of at least 20% of the duties of a single employee – that is, one person-day per week. This "20% Rule" includes time spent arranging, preparing for, travelling to, and participating in meetings with public office holders.2
Preparing for and participating in stakeholder consultations and advisory processes may count towards this registration threshold, particularly where they involve closed-door meetings whose results are not shared publicly. The Lobbying Commissioner's guidance is to assess "every consultation process ... on its own merits", but the general rule is that, unless a meeting is transparent to the public, it will count towards the 20% Rule for corporate registration.
If the corporation or organization must register, its most senior paid officer, usually the President or CEO, has two months to do so. Failure to register is a strict liability offence punishable by a fine (up to $200,000) or imprisonment (up to two years), or both.
If a corporation or organization must register, its most senior paid officer is required to file a monthly return with the Lobbying Commissioner within 15 days after the end of each month. This report must include details of communications between the corporation's or organization's employees and public office holders in the preceding month.
But not all communications must be reported. Though all communications that fall within the definition of lobbying under the Lobbying Act will count towards the 20% Rule, only communications that are (i) arranged in advance; (ii) made orally; (iii) with a designated public office holder3; and (iv) initiated by someone other than a public office holder must, in most cases,4 be reported on a month-to-month basis.
It is because of the fourth condition – that only communications initiated by someone other than a public office holder must be included in a monthly return – that most stakeholder consultations or advisory processes will be exempt from monthly reporting.
If a corporation or organization only participates in government-initiated communications in a given month, then the corporation or organization will not have to file a monthly return. Instead, the corporation or organization will file its next return with the Lobbying Commissioner when: (i) a monthly reporting obligation arises; (ii) any information included in its initial registration changes; (iii) the 20% Rule ceases to apply; or (iv) it has been five months since the end of the month in which the corporation or organization last filed a return. So, if a corporation or organization registers in January and none of (i), (ii), or (iii), above, occurs, then the corporation or organization must next file a return before the end of June.
In Ontario, participation in stakeholder consultations and advisory processes will not require registration when such participation is in direct response to a written request for advice or comment from a public office holder.5 Similarly, and as under the federal law, submissions made in proceedings on the public record will not trigger a reporting obligation.
Note, however, that the request for advice or comment must be in writing, and that the corporation's or organization's response must be direct, in order for the exemption from the registration requirement to apply. A verbal invitation to a meeting with other stakeholders will not suffice.
Without a written request, participation in a stakeholder meeting with an Ontario public office holder will count towards a corporation's or organization's registration requirements under the Lobbyists Registration Act, 1998. As of July 1, 2016, a corporation or organization must register when its employees and/or paid directors will collectively devote at least 50 hours to provincial lobbying in a given one-year period. Read McCarthy Tétrault's update on recent changes to Ontario's lobbying rules here.
Unlike under federal law, a corporation or organization is not required to report individual meetings with Ontario public office holders on a month-to-month basis. Rather, the corporation or organization – through its senior officer, usually the President, CEO, or Executive Director – will have to disclose the names of its employees or paid directors who lobby, the subject matter(s) and goal(s) of the lobbying, and the offices and entities (but not the names of individuals) lobbied or to be lobbied. This information must be updated within 30 days of any changes and the corporation's or organization's registration must be renewed within six months of the corporation's or organization's last filing with the Integrity Commissioner, as registrar.
3. ONTARIO MUNICIPALITIES
Four Ontario municipalities have their own lobbyist registries: Toronto, Hamilton, Brampton, and Ottawa.
The by-laws establishing these lobbying rules are similar in that they generally do not consider a response to a written request for participation in a public process to be lobbying that gives rise to a registration requirement. That being said, none of Ontario's municipal lobbying by-laws maintains a threshold under which registration is not required – all lobbying activities that are not exempt from the by-law trigger registration.
The Ontario by-laws differ in certain important respects. These include the range of public office holders to whom the by-laws apply, and the timeline for filing a registration or return.
Under Toronto's lobbying by-law, a communication with a public office holder6 that is in direct response to a written request from that public office holder is exempt from the registration requirements.
As with provincial stakeholder consultation processes, corporations and organizations that engage with Toronto municipal officials in the course of such processes should ensure that they have a written request from those officials. In the absence of a written request, communication with a Toronto public office holder will not only be subject to a registration requirement, but registration must also be completed before the communication takes place.
Note that, under the Toronto rules, there is no threshold at which a corporation or organization must register its in-house lobbying activities. Rather, the senior officer of a corporation or organization must register before its employees begin any lobbying at all.
Most not-for-profit organizations are exempt from the requirement to register under the Toronto by-law.
Hamilton expressly excludes city-initiated stakeholder consultations from its municipal lobbyist registration requirements. Like Toronto, it also generally exempts a communication with a public office holder7 in direct response to a written request from that public office holder. Public hearings, consultations, open houses, and meetings are similarly exempt.
Otherwise, a lobbyist registration must be filed at least one business day before the first lobbying communication occurs. Note that, as in Toronto, the Hamilton by-law has no minimum threshold: all lobbying that is not exempt requires registration.
Brampton's lobbying by-law is identical to the Hamilton by-law with respect to registration exceptions for responses to written requests from public office holders and participation in public processes. Otherwise, as in Toronto and Hamilton, there is no minimum threshold to be exceeded before the lobbyist registration requirement is triggered.
Unlike Toronto or Hamilton, however, Brampton allows a lobbyist to register in advance of the first lobbying communication or up to five business days afterward. "Public officer holder" is also broadly defined in Brampton.8
Ottawa's lobbying by-law is also substantively similar to Hamilton's with respect to exceptions for responses to written requests and participation in public processes. The Ottawa by-law contains an extensive list of public office holders.9
Ottawa allows lobbyists to file a return regarding a lobbying communication within 15 business days of the communication's occurring. There is no minimum threshold before communications are deemed to be lobbying; where there is no exception, registration is required.
In Québec, the Lobbying Transparency and Ethics Act exempts from lobbyist registration a communication to a public officeholder that occurs in response to a written request from a public office holder10. Submissions made at public meetings or as part of public processes of the National Assembly or municipal government bodies are not considered lobbying.
In Québec, an enterprise or organization must register when the amount of time that its employees collectively spend on Québec lobbying adds up to the equivalent of at least 12 days of work in any year, if all such time was devoted by a same employee. This "12-Day Rule" includes time spent arranging, preparing for, travelling to, and participating in meetings with public office holders. However, this threshold will not apply in the case of lobbying activities that are of significant importance to the development of the organization or if they are carried out by senior officers of the enterprise or organization. Once the registration requirement arises, an enterprise or organization must disclose all lobbying activities in its registration, regardless of the foregoing threshold.
An enterprise or organization has 60 days to file a return from the time its obligation to register arises, and must renew its registration no later than 60 days following the end of its fiscal year. The information shown in the return must be updated within 30 days of any changes.
5. BRITISH COLUMBIA
British Columbia's Lobbyists Registration Act stipulates that participation in stakeholder consultations and advisory processes will not require registration when such participation is in direct response to a written request for advice or comment from a public office holder.11 This is similar to the Ontario law. Likewise, submissions made in proceedings on the public record will not trigger a reporting obligation.
Again, without a written request, any lobbying communication with a public office holder will count toward an in-house lobbyists' registration threshold. In B.C., the senior officer of an organization must register when the collective lobbying activities of the organization's in-house lobbyists amount to 100 hours or more annually. The return must be filed within 60 days of the date the organization has first exceeded the 100-hour threshold. If a return has previously been filed, a return must be filed within 30 days of the end of each 6 month period after the date of the previous return.
In Alberta, a response to a request initiated by a public officer holder12 for advice or comment is not considered lobbying under the Lobbyists Act, whether the request is in writing or not. Participation in a proceeding on the public record is also not considering lobbying in Alberta.
Like B.C., Alberta maintains a 100-hour registration threshold for in-house lobbyists. Also as in B.C., the 100 hours must be aggregated across all employees of the entity that engage in lobbying activities. The organization's senior officer is required to file the organization's return within two months after the day on which an individual in the organization exceeds the threshold and becomes an "organization lobbyist" and within 30 days after the expiration of each six-month period after the date of filing the previous return.
Failure to comply with lobbying rules can result in significant penalties, even when the non-compliance is inadvertent. By understanding your obligations and ensuring that proper internal policies and procedures are in place, you can make your voice heard with confidence.
1 For employees of corporations and organizations, the federal Lobbying Act defines lobbying as any communication with a public office holder in respect of: the development, introduction, amendment, passage, or defeat of any bill, resolution, or other legislative proposal; the making or amendment of any regulation; the development or amendment of any federal government policy or program; or the awarding of any grant, contribution, or other financial benefit by or on behalf of the federal Crown.
2 Under the federal Lobbying Act, "public office holders" include: all federal officers and employees; parliamentarians and their staff; federal appointees other than judges and provincial lieutenant governors; officers, directors, and employees of federal boards, commissions, and tribunals; and members of the Canadian Armed Forces and the RCMP.
3 Under the federal Lobbying Act, "designated" public office holders include: Cabinet ministers and their staff; MPs and Senators; and senior public servants and military officers.
4 Certain communications must be reported even when they are initiated by a public office holder. These are: (i) communications in respect of the awarding of any grant, contribution, or other financial benefit by or on behalf of the federal Crown; and (ii) communications by consultant lobbyists in respect of the awarding of federal government contracts.
5 Under the Ontario Lobbyists Registration Act, "public office holder" includes any Ontario Cabinet minister; an officer or employee of the province; an MPP or their staff, a person appointed to an office by the Lieutenant Governor in Council or a minister (other than a member of the judiciary); and members of the Ontario Provincial Police.
6 Under Toronto's lobbying by-law, "public officer holder" has the same meaning as in section 156 of the City of Toronto Act, 2006, which lists members of City Council and persons on their staff; officers and employees of the city; members, officers, directors, or employees of local boards of the city. The by-law also specifically includes in the definition members of the Board of Health and individuals appointed by City Council, one of its committees, or a local board.
7 Under Hamilton's lobbying by-law, a "public office holder" is a member of city council and any person on his or her staff or an employee of the city who is a member of the city's Senior Management Team. "Senior Management Team" is not defined within the by-law. (This definition is arguably narrow compared to some of the other jurisdictions.)
8 Under Brampton's lobbying by-law,"public office holder" includes members of City Council or their staff; officers or employees of the city; members of a local board or committee established by Council and their staff; an accountability officer established under the Municipal Act, 2001 (such as an Auditor General, Integrity Commissioner, Lobbyist Registrar, Ombudsman, or Closed Meeting Investigator).
9 Under Ottawa's lobbying by-law, "public office holder" includes a member of City Council and his or her staff; citizen members of the Transit Commission; a non-exclusive list of officers and employees of the City; and individuals providing professional services to the City during the course of providing such services. A subclass of "senior public office holders" includes members of Council and their staff; citizen members of the Transit Commission; and senior officers and employees of the City (the City Manager, Deputy City Managers, City Treasurer, City Clerk and Solicitor, and general managers or directors).
10 Under Québec's Lobbying Transparency and Ethics Act, "public office holder" includes government ministers, members of the National Assembly, and persons on their staff; provincial government employees; individuals appointed to (and employees of) government agencies within the meaning of Québec's Auditor General Act; persons appointed to (and employees of) non-profit agencies that operate principally from government funding; mayors, municipal councillors, wardens, chairs, etc., and their staff; and a number of municipal employees and officers.
11 Under the B.C. Lobbyists Registration Act, "public officer holder" includes members of the Legislature and their staff; officers or employees of the provincial government; any person appointed by the Lieutenant Governor in Council; and officers, directors, or employees of any government corporation as defined in the B.C. Financial Administration Act.
12 Under the Alberta Lobbyists Act, "public office holder" includes members of the Legislative Assembly and their staff; employees of a provincial government departments; individuals appointed to boards, committees, or councils under section 7 of the Alberta Government Organization Act; and employees, officers, directors, or members of 'prescribed' provincial entities.
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.