Canada: PEI's New Lobbying Law Is In Effect: Companies Doing Business With The PEI Public Sector Must Comply To Avoid Legal Risk

Lobbyist Registration and Lobbying Law Bulletin
Last Updated: April 22 2019
Article by Guy W. Giorno and Matthew Welch

As of April 1, Prince Edward Island's lobbying law is now in effect. The law includes strong enforcement provisions. Businesses and individuals dealing with the PEI public sector must comply with the new registration requirements.

Prince Edward Island's Lobbyists Registration Act came into force as of April 1, 2019. PEI is the last Canadian province to adopt a lobbying transparency law.1 This law will be of interest to any business that has dealings with PEI legislators or government officials, as well as to consultants and their clients.

Scope of PEI's Lobbying Law

PEI's new lobbying law defines lobbying in a manner consistent with the definition in other provincial statutes. Lobbying is communication with a public-office holder in an attempt to influence:

  • Legislation, regulations, and government policies and programs;
  • Government grants, contributions and financial benefits; and,
  • Privatization, out-sourcing and contracting out.

In the case of consultants, lobbying also includes the arrangement of meetings with public-office holders and attempting to influence the awarding of government contracts.

Grass-roots communication is also lobbying. It constitutes an exception to the principle that lobbying involves direct communication to a public-office holder. Grass-roots communication involves communication to members of the public in an attempt to put pressure on public-office holders. It is best thought of as a form of lobbying in which the lobbyist communicates indirectly with a public-office holder by enlisting the public's help. PEI's new lobbying law will require reporting of grass-roots communication by lobbyists.

As is common across Canada, public-office holders include everyone who holds an elected, employed or appointed position in the provincial government, and anyone appointed to an office by the Cabinet or a Minister. Members, officers and employees of educational authorities are public-office holders too.

In addition, members, officers and employees of 22 provincial Crown corporations , including the Prince Edward Island Cannabis Management Corporation, the Prince Edward Island Liquor Control Corporation and the Island Waste Management Corporation, are public-office holders.

Express Carve-Out for Municipal Employees and the Potential for Future Exceptions

PEI's lobbying law expressly excludes all lobbying by officers, directors or employees of the Federation of Prince Edward Island Municipalities. This exemption is similar to carve-outs from the Newfoundland and Labrador and Nova Scotia laws, but does not appear in the laws of most other provinces. Other provincial lobbyist registration laws typically do not exempt advocacy organizations by name.

In addition, PEI's lobbying law provides that the provincial Cabinet can exempt from the registration requirement any class of lobbyists that it chooses. This is not without precedent. Alberta, Manitoba, New Brunswick, Newfoundland and Labrador and Saskatchewan also allow Cabinet to exempt entire classes of lobbyists from the statutory requirements. In Québec, certain categories of persons, bodies or agencies are excluded from the definition of "lobbyist" by regulation.

PEI's Cabinet has not yet exempted any lobbyists. This does not, however, preclude the provincial Cabinet from doing so in the future.

Registration

Consistent with the approach of most Canadian jurisdictions, in the case of consultant lobbying PEI imposes the registration filing requirement on each individual consultant lobbyist.2

In the case of in-house lobbying by employees of a business, PEI places the responsibility for registration not on the CEO, but on the individual employees. This model is employed in the two other Maritime provinces, but nowhere else in Canada.3 In the case of lobbying by a not-for-profit organization, the CEO (senior officer) of the organization will file one return covering all employees and officers who lobby.

In-house lobbyists for businesses will be required to register when either their individual duties include lobbying for at least 50 hours in a three-month period or where their duties, when combined with other lobbying employees, equal at least 50 hours of lobbying in a three-month period. In-house lobbyists are individually responsible for filing returns within two months after the day this threshold is reached, with renewals then required semi-annually.

A consultant lobbyist will be required to file the first return within 10 days of starting to lobby, and thereafter to renew semi-annually. Filing of the first in-house lobbyist return will be required within two months after an employee becomes an in-house lobbyist,4 and thereafter semi-annually. These deadlines are consistent with those in other jurisdictions.

PEI's Cabinet has imposed fees for filing and updating most returns. Initial returns by senior officers of organizations (this is, of not-for-profit entities) are free.

Revolving-Door Restriction

The law will prohibit a small number of public officials from lobbying after leaving office. Former occupants of the following positions will be prohibited from engaging in both consultant lobbying and in-house lobbying for a period of six months after ceasing to hold public office:

  • Ministers
  • MLAs
  • Offices of the Legislative Assembly
  • Deputy ministers (including anyone holding an equivalent position in the Premier's office)
  • Secretary to the Treasury Board
  • Clerk or Clerk Assistant to the Executive Council
  • Anyone who either held the highest executive position or was on the board of directors of certain Crown corporations or education-related public bodies

In the case of former Ministers, the above restriction would operate alongside the existing restriction under the Conflict of Interest Act.5 Under that statute, for six months after ceasing to hold office, a former Cabinet minister may not make representations to the Government, whether on his or her own behalf or that of another person, concerning a contract or benefit. A former Minister is also prohibited from contracting or accepting a benefit awarded by Cabinet or a government employee, or accepting a contract or benefit from any person who received a contract or benefit from a department of which he or she was the Minister.

One significant omission from the law is a code of conduct for lobbyists. Codes of conduct in federal jurisdiction, Quebec, and Newfoundland and Labrador itemize specific ethical rules that lobbyists must follow. In Ontario a code of conduct is pending.

Enforcement

PEI's new lobbying law will be enforced by prosecution. The law creates 24 separate offences, including:

  • Lobbying when one is not registered on the registry of lobbyists.6
  • Failure to file a consultant lobbyist return within ten days of commencing lobbying and semi-annually thereafter.
  • In the case of consultant lobbying already taking place when the new law comes into effect, failure to file a return within ten days.
  • Failure to file an in-house lobbying return within two months of an employee of a business becoming an in-house lobbyist and semi-annually thereafter.
  • In the case of an in-house lobbyist already employed when the new law comes into effect, failure to file a return within two months.
  • Failure of the CEO (senior officer) of an organization to file an in-house lobbying return within two months of employing one or more in-house lobbyists, and semi-annually thereafter.
  • Failure to include required content in a consultant lobbying return.
  • Failure of an in-house lobbyist for a business to include required content in an in-house lobbying return.
  • Failure of the CEO of an organization to include required content in an in-house lobbying return.
  • Failure to correct or to update information in a return within 30 days of a change.7
  • Failure to terminate a registration within 30 days after a consultant lobbying undertaking is completed or terminated.
  • Failure to inform the Registrar within 30 days after an in-house lobbyist ceases to lobby or to be employed.
  • Failure to respond within 30 days to a clarification request from the Registrar.
  • Receiving or paying a contingency fee (success fee) for consultant lobbying.8
  • Violating the six-month revolving-door prohibition, i.e., ban on lobbying by selected former public-office holders.
  • Knowingly making a false or misleading statement in a return or other document submitted to the Registrar.
  • While in the course of lobbying, knowingly placing a public-office holder in a position of real or potential conflict of interest.9

On conviction, the maximum fine would be $25,000 for each offence. Prosecutions cannot take place once two years have passed since the alleged conduct.

Next Steps

Businesses and others dealing with the public sector in Prince Edward Island should evaluate whether they are required to register, and adopt robust policies and procedures to ensure compliance with ongoing registration requirements. Please contact the authors, or any member of Fasken's lobbying-law compliance team, for more information on the subject of this bulletin.

Footnotes

[1] Of territorial governments, Northwest Territories and Nunavut do not have lobby laws at present. Yukon's legislature has passed a lobbying law but it is not yet in force. See: Matthew Welch, "Lobbying law bill currently before the Yukon's legislature will impose new legal obligations on businesses and individuals that engage with government".

[2] Only Alberta does not require separate individual filings by consultant lobbyists.

[3] Only New Brunswick and Nova Scotia place the registration obligation on the individual in-house lobbyists for a business.

[4] That is, within two months of first employing one or more officers or employees whose collective volume of lobbying reaches 50 hours in a three-month period.

[5] R.S.P.E.I., c. C-17.1, s. 24.

[6] Two separate offence provisions, one for consultant lobbyists and one for in-house lobbyists.

[7] Three separate offence provisions, one for consultant lobbyists, one for in-house lobbyists for a business and one for CEOs (senior officers) who file in-house lobbying registrations on behalf of organizations.

[8] Two separate offence provisions, one for receiving a contingent payment or one for making it.

[9] Two separate offence provisions, one for consultant lobbyists and one for in-house lobbyists.

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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