Canada: Canadian Counsel @ Gowlings - June 13, 2008

Last Updated: June 25 2008

Edited by Christopher Alam


  • Canada's New Tougher Lobbying Act

  • Bill C-61: Proposed Amendments to the Copyright Act Released

Canada's New Tougher Lobbying Act
Article by Chris S. Schafer,

U.S. business beware. The new Canadian federal Lobbying Act sends a clear get-tough message to lobbyists. Increased enforcement, larger criminal monetary penalties, and heightened scrutiny of lobbying related matters, mean that U.S. corporate counsel and U.S. businesses that lobby the Canadian federal government must be aware of the changes coming to federal lobbying law.

Whether or not you are a Canadian citizen, if your activities involve lobbying federal public office holders in Canada, you must register as a lobbyist in Canada. A foreign corporation or the Canadian subsidiary of a foreign corporation whose employees lobby public office holders in Canada or while they are posted abroad, are subject to Canadian lobbying law. If the Canadian subsidiary of a foreign corporation has to register, it is the responsibility of the most senior paid officer, regardless of whether that person is a Canadian citizen or resides in Canada, to ensure that they are registered as a lobbyist in Canada.

On December 12, 2006, the Federal Accountability Act received Royal Assent. Among other things, it amends the Lobbyist Registration Act and renames it the Lobbying Act. The Lobbying Act establishes the position of the Commissioner of Lobbying, who will be an independent Agent of Parliament, with enhanced investigatory powers and a mandate to enforce compliance with the Lobbying Act.

The Commissioner will be able to, among other things, ask designated public office holders to verify the accuracy and completeness of contact report information that lobbyists submit and, if necessary, report to Parliament the names of those who do not respond. The Commissioner will also be able to conduct expanded investigations, including the power to summon and compel persons to produce documents relevant to any investigation of possible infractions under the Lobbying Act or Lobbyists' Code of Conduct, and prohibit lobbyists convicted of any offence from communicating with the government as paid lobbyists for up to two years, if the Commissioner deems it to be in the public interest, in addition to publishing the names of violators in reports before Parliament.

Furthermore, under the Lobbying Act there will be increased time allowed for the investigation and initiation of prosecution for possible infractions or violations under the Lobbying Act or Code (previously the limitation period was two years; now it is up to 10 years). The Lobbying Act will also double the current criminal monetary fines for lobbyists who do not comply with the requirements of the Lobbying Act, from $25,000 to $50,000 on summary conviction, and from $100,000 to $200,000 on proceedings by way of indictment, not to mention the possibility of up to six months imprisonment for the former and up to two years imprisonment for the ladder.

It is important to note that when employees of a business lobby, they are not individually responsible for registering and reporting their lobbying activities. Instead, the legislative reporting obligation rests with the employee who occupies the senior most position in the business and is paid for the performance of these duties. Usually, that officer is known as the president, CEO, or executive director. If a report is not filed, or if it is filed incorrectly, incompletely, or late, then liability rests with the CEO or senior officer of the business and they are subject to possible investigation and/or prosecution.

Under the Lobbying Act, the strict liability offence of failing to file a return will become subject to the identical penalties as the mens rea offence of knowingly making a false or misleading statement (on a return, for example): $50,000 fine or six months' imprisonment or both (summary conviction); $200,000 fine or two years imprisonment or both (indictment), as noted above. Although a CEO charged with a strict liability offence could argue that he or she took all "reasonable care" and exercised "due diligence" in order to comply with the Lobbying Act, the onus would lie on the CEO to prove such care was taken and diligence exercised. In the end, despite the stiffer financial penalties under the Lobbying Act, they may be less powerful than the taint that would come to the reputation of a business and in-house lobbyist, who would almost certainly have their names publicly tainted by the media and opposition political parties.

Lobbying regulators have been increasing their enforcement related activities. The second conviction under Canadian lobbying laws was of a CEO who failed to report in-house lobbying activities under Quebec provincial legislation. In February 2007, the federal Registrar of Lobbyists issued four reports of investigations into the activities of a consultant lobbyist for four British Columbia (BC)-based corporations. In these reports, each corporation was named in the title and in the body of the particular report and in the media coverage that ensued. The reports were also tabled in Parliament and made public.

At the same time, lobbying related allegations and unregistered lobbying are attracting increasing media coverage. In February 2007, national media reported widely on allegations that Don Cherry and senior employees of CV Technologies Inc., which makes COLD-Fx, lobbied federal officials without being registered, although registration in this case was ultimately determined to be unnecessary. Similarly, the media widely reported that a former adviser to BC Premier Gordon Campbell was charged with and pled guilty to violating the BC provincial lobbying law.

Thus, given the new get-tough approach of the Canadian Lobbying Act, and the increased enforcement and heightened scrutiny of lobbying related matters in Canada, U.S. corporations would be well served by corporate counsel and in-house lobbyists who are aware and understand the changes to Canadian federal lobbying law.

Bill C-61: Proposed Amendments to the Copyright Act Released

Yesterday, the Federal Government introduced Bill C-61 proposing substantial amendments to the Copyright Act. In an associated news release, the Government expressed the motivations behind its proposed amendments as being four fold: (a) To balance the rights of copyright holders with the needs of users to access copyright works, (b) To provide clear, predictable and fair rules under the Copyright Act, (3) To foster innovation and attract investment to Canada, and (4) to ensure Canada's copyright framework for the Internet is in line with international standards.

Bill C-61 is large and addresses a number of areas of copyright law, many of which relate to challenges having arisen from the Internet and digital technologies. It will take time to fully assess the impact Bill C-61 will have on the Canadian Copyright regime. In brief summary, the following are among the more important changes to copyright law proposed by the Government:

  • Provisions placing an obligation on ISPs to pass on to their subscribers notices of copyright infringement. ("notice and notice" approach). ISPs' failing to comply may be liable for copyright-infringing activities taking place on their networks.

  • An obligation on ISPs to keep a record of information permitting the identification of infringers.

  • Limitations on the liability of search engines for reproductions made in the course of providing their services.

  • Introduction for the first time of prohibitions against circumvention of technological measures intended to control access to works, similar in nature to prohibitions enacted in the U.S. by the Digital Millennium Copyright Act, and consequences for such circumventions.

  • Exceptions to copyright infringement intended to benefit educational institutions in specific circumstances.

  • Provisions to allow consumers to legally record TV programs for later viewing (time shifting) and to transfer legally recorded music onto other devices (such as an iPod).

  • Changes made in relation to ownership of copyright and term of protection for photographs, to deal with these works in the same manner as other types of works under the Act.

  • Creating a distribution right for Works, Performer's Performances and Sound Recordings to control the initial entry of product in the marketplace.

  • Creating a making available right granting Performers and the Makers of Sound Recordings with the right to control the posting of their materials online.

  • A court could award no more than $500 in statutory damages against an individual for all private use infringements in a lawsuit (e.g. for downloading a song without the owner's permission).

As Parliament is about to recess for the summer, further legislative developments regarding this bill will have to wait for the Fall.

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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