Copyright 2008, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Financial Services, June 2008
Canada's new Lobbying Act (currently referred to as the Lobbyists Registration Act) comes into force on July 2, 2008. The amendments to the Lobbyists Registration Act creating the new Lobbying Act were passed by Parliament on December 12, 2006 as part of the omnibus Federal Accountability Act, but implementation was significantly delayed. This bulletin addresses these amendments. For information on the requirements that have not changed, or for advice on a particular situation, please contact us.
The Lobbying Act introduces a requirement to file a monthly return if certain conditions exist. The changes to the reporting requirements, including this new monthly return, are outlined below.
Other key amendments to the Lobbyists Registration Act provided for in the Federal Accountability Act include:
- Creation of a new statutory category of "designated
public office holder" (DPOH) to refer to officials
responsible for high-level decision-making in government. The
concept of public office holders remains in the Lobbying
Act and continues to be used to define Lobbying
Activities. A DPOH is a subset of public office holders and
include Ministers, certain senior officials and others who
may be designated as DPOHs. The significance of the DPOH
designation is discussed below.
- Making or receiving any payment or any other benefit that
is contingent on the outcome of any consultant
lobbyist's activities is prohibited (i.e., success or
contingency fees). To help enforce this prohibition,
consultant lobbyists will have to confirm in their return
that they are not receiving a contingency fee.
- The position of Registrar of Lobbyists is replaced with
that of Commissioner of Lobbying, an independent Agent of
Parliament. The Commissioner will oversee the enforcement of
the Lobbying Act and the Lobbyists' Code
of Conduct and ensure that all aspects of the
lobbyists' registration regime are adhered to. The
current Registrar, Michael Nelson, is authorized to act as
the Commissioner of Lobbying until the appointment of a
Commissioner under the Lobbying Act.
- The period during which possible infractions or
violations under the Lobbying Act may be
investigated and prosecuted is extended from two years to 10
years.
- The maximum monetary penalties are doubled (up to
C$50,000 for offences proceeding by way of summary conviction
and up to C$200,000 for offences proceeding by way of
indictment) for lobbyists who are found guilty of breaching
the requirements of the Lobbying Act. In addition,
if a person is convicted of an offence under the Lobbying
Act, the Commissioner may prohibit such person from
engaging in Lobbying Activities for up to two years, if the
Commissioner is satisfied that it is necessary in the public
interest.
The Lobbying Act continues to distinguish between consultant lobbyists and in-house lobbyists and does not change the definition of those terms. It does not change the activities that require registration for a consultant lobbyist or an in-house lobbyist or the exemptions from registration.
REPORTING REQUIREMENTS
The reporting requirements depend on whether the Lobbying Activity is undertaken by a consultant lobbyist or an in-house lobbyist.
Initial Returns
Consultant Lobbyists
The requirement to file an initial return within 10 days of entering into an undertaking remains unchanged; however, the amendments impose new content requirements for initial returns. Consultant lobbyists must now certify that their undertaking does not provide for contingency fees and, if the consultant lobbyist is a former public office holder, the lobbyist must provide a description of the offices held, which offices (if any) qualified the lobbyist as a DPOH, and the date on which the lobbyist last held a designated public office (if any). In addition, if the consultant lobbyist is lobbying on behalf of a corporation or organization of which he or she is a member of the board of directors, the return must disclose this.
In-House Lobbyists (Corporations and Organizations)
The requirement to file an initial return within two months of the day on which the requirement to file the initial return arises (that is, the date on which the activities of the corporation or organization cause it to be required to file an initial return) remains unchanged. The amendments add new content requirements for the initial returns of in-house lobbyists. The return must provide particulars to identify the subject matter of any communication that an employee named in the return has made or is expected to make with a public office holder and, if any employee named in the return is a former public office holder, a description of the offices held, which offices (if any) qualified the employee as a DPOH, and the date on which the employee last held a designated public office (if any). In addition, corporations must now provide a list of each employee, a significant part of whose duties involve lobbying (currently interpreted to mean 20% or more), and a list of each senior officer (CEO, COO, president, and any other officer who reports directly to the CEO, COO or president) whose duties include lobbying (but without constituting a significant part of duties).
Monthly Returns
Lobbyists are required to file the new monthly return not later than 15 days after the end of the month if any of the following four conditions exist (but note that, if none of the conditions in the first three points exist, the "monthly return" will actually be filed every six months):
- An oral communication with a DPOH that was arranged in
advance of the communication and not initiated by a public
office holder took place during the month being reported
upon. One exception to this condition is that where the
communication is in respect of the awarding of any grant,
contribution or other financial benefit by or on behalf of
Her Majesty in right of Canada (with respect to both in-house
and consultant lobbyists) or the awarding of any contract by
or on behalf of Her Majesty in right of Canada (with respect
to consultant lobbyists only), the monthly reporting
requirement applies even if the communication is initiated by
a public office holder. Note that communications with a DPOH
that took place before July 2, 2008 do not have to be
reported. Letters, e-mails and spontaneous conversations do
not need to be disclosed in the monthly returns. The monthly
return must set out the name of each DPOH and the date and
particulars of the communication. DPOHs may be requested by
the Commissioner of Lobbying to verify these monthly
communications. This implicitly imposes a record keeping
obligation on DPOHs.
- Information contained in a return is no longer correct or
additional information has come to the lobbyist's
attention and such information is required to be included in
the return.
- In the case of in-house lobbyists (corporations and
organizations), the employer no longer employs individuals a
significant part of whose duties constitute lobbying, or in
the case of consultant lobbyists, the lobbying activities
have been performed or terminated.
- Five months have elapsed since the end of the month in
which a return was last filed without a return being filed (a
total of approximately six months since it was filed).
As a result, if none of the conditions in the first three points exist, the "monthly return" will actually be filed every six months.
DESIGNATED PUBLIC OFFICE HOLDERS
Subject to certain exceptions, DPOHs are prohibited from lobbying for five years after they leave public office. Note that, with respect to in-house corporate lobbyists, this prohibition only applies if lobbying would constitute a significant part of the former DPOH's work on behalf of his or her employer.
OTHER LOBBYING LEGISLATION
With all this focus on changes to the federal lobbying legislation, do not forget that the provinces and municipalities may also have legislation with respect to lobbying.
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.
