Canada: A New Federal Lobbyists' Code Of Conduct

Parliament has recessed for the summer. As we take stock of the many subjects that occupied Members of Parliament from January to June 2023, the amended Lobbyists' Code of Conduct ("Code") under the Lobbying Act is on their list of accomplishments. What does this mean for your organization or corporation, and the potential lobbying activities that you plan to undertake in the fall of 2023?

The 2023 Lobbyists' Code of Conduct came into force on July 1, 2023 to replace the 2015 Code of Conduct. The 2023 Code attempts to encapsulate the purpose of the Lobbying Act by providing standards to govern and guide lobbyists in the course of lobbying activities to promote public transparency and accountability about who is being paid to lobby public office holders and to protect public confidence in the integrity of government institutions and decision-making.

Four objectives guided the Commissioner in the development of the 2023 Code.

1. The use of plain, direct and accessible language to support understanding and compliance with the rules.
2. A focus on the actions of lobbyists without references to the various ethical regimes (i.e. the Conflict of Interest Act, Conflict of Interest Code for Members of the House of Commons, Appendix 1, Standing Orders of the House of Commons, etc.) that apply to public officer holders.
3. Clarifying that the rules that apply to both direct and indirect communication (i.e. grassroots communications) with public office holders.
4. Integrating key definitions and examples in the Code rather than relying on separate guidance documents.

The scope of the 2023 Code applies "to the lobbying activities and interactions that lobbyists have with officials that they lobby or expect to lobby." The Code, the Lobbying Act, nor any of the guidance documents produced by the Office of the Commissioner of Lobbying of Canada ("OCL") define the expression "expects to lobby." This area requires clarification given the implications for lobbying registration and reporting requirements.

The Code also sets out the expectations, which continue to reflect the fundamental nature of the values that underpin the principles, and that are intended to guide lobbyists in complying with the Code's rules of conduct: transparency, respect for government institutions, integrity, honesty and professionalism.

The Application section of the 2023 Code clearly stipulates that any individual who lobbies on a registrable subject matter for a client or employer must be identified as a lobbyist in the Registry of Lobbyists. This includes every consultant lobbyist, meaning an individual who lobbies, including arranging meetings, on behalf of a client for money or anything of value. This also includes all registered organization or corporation in-house lobbyists who lobby for their employer and who must be identified by their employer in the Registry of Lobbyists. A corporation must identify all senior officers who lobby as well as other employees who lobby as a significant part of their individual work duties. The implications for non-compliance may lead to an investigation by the Commissioner and a public investigation report to Parliament.

The 2023 Code includes some significant substantive changes in the following areas: disclosure, rules on gift and hospitality, and cooling off periods for political work as well as new rules on "close relationships" and "sense of obligation."

Disclosure

The 2023 Code introduces a specific rule for in-house lobbyists who lobby on behalf of their employer.

As a result, it is critical to note that employees must report their lobbying activities to their employers, and this ultimately puts the onus on employers to implement appropriate reporting systems and compliance promotion initiatives to enhance transparency and awareness of obligations.

The rule on gifts and hospitality

1. The rule prohibits gifts or hospitality other than what is considered "low value."
2. The low-value limit is $40 in 2023 dollars, before taxes, and the combined value of allowable gifts and hospitality cannot exceed the annual limit of $200 in 2023 dollars within a calendar year. Hospitality means food and beverage provided for consumption during an in person gathering (meeting, lobby day, event reception, etc.).
3. The value of an instance of hospitality is determined on a per-person basis by dividing the total cost of the food and/or beverage by the number of all individuals reasonably expected to attend the gathering.
4. The "low value" limit on the rules on gifts and hospitality will have the effect of limiting the use of sponsored travel, a technique used by organizations or corporations to illustrate the practical implications of policies to Parliamentarians and decision-makers.

The new rule on close relationships

The 2023 Code introduces a rule (rule 5) on close relationships to prohibit lobbyists from lobbying a public office holder where the public office holder "could reasonably be seen to have a sense of obligation" towards the lobbyist because the lobbyist has a close relationship with the with the public office holder.

The definition of close relationships includes examples of close family relationships, close professional relationships, close working relationships, close business relationships and close financial relationships.

This means that the responsibility to track and monitor client/employer close relationships will be challenging for many organizations and corporations to track and fully understand the networks and relationships of their clients.

The rules related to gifts, hospitality and close relationships include the option of requesting an exemption from Commissioner.

Cooling off periods for political work

1. The Code clarifies the definition of political work (paid or unpaid) and the factors that will be considered to be captured by the rule (nature of political work, degree of interaction and the duration/amount of time spent with official).
2. Leadership or senior political roles performed for an official or their political parties will now result in a 24-month cooling-off period. Examples include serving as a designated spokesperson, campaign manager, coordinating political research or data analysis, coordinating political messaging or advertising, organizing political fundraising, etc.
3. "Frequent and/or extensive" interaction with an elected official will now result in a 12-month cooling-off period. Examples include canvassing, distributing and disseminating campaign materials, performing political research and data analytics tasks, engaging in fundraising, etc.
4. Frequent work is defined as work that is done either more than three times or a total of eight hours per week, and extensive work is defined as work that is done for around or more than 24 hours per week.
5. Parliamentary Secretaries or the staff that work with the Minister remain within the scope of the rules on cooling-off periods.

The new rule on sense of obligation

The 2023 Code reformulates the conflict of interest rule (rule 6) of the 2015 Code. The focus is no longer on whether the lobbyist's conduct has put the public office holder in a real or apparent conflict of interest. Rather, the focus lies on whether the public officer holder could have a "sense of obligation" (rule 7 of the 2023 Code) towards the lobbyist. For example, a sense of obligation exists where the lobbyist or the lobbyist's client or employer have employed a public office holder before they became a public office holder or employed or continue to employ a close family member of the public office holder.

Lobbying initiatives require special considerations and must be considered with care to ensure compliance with requirements. While the 2023 Code does provides enhanced clarity compared to the 2015 Code, particularly with respect to the rule on gifts and hospitality, the new rules on "close relationships" and "sense of obligation" are broad in scope and will likely present significant implementation challenges.

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