October 21, 2019 is Election Day in Canada.1 If you or your employees communicate with federal officials, updated guidance on political activities, preferential access, and gifts could affect your business. Here's what you need to know about the Lobbyists' Code of Conduct (the "Code") during the upcoming election campaign.
Briefly, lobbyists may not put a federal public office holder in a conflict of interest. The test, according to the Commissioner of Lobbying (the "Commissioner"), is whether:
[A]n informed person, viewing the matter realistically and practically and having thought the matter through, [would] think that an action taken by a lobbyist has created a sense of obligation on the part of the public office holder, or a tension between the public office holder's private interests and the duty of the public office holder to serve the public interest[.]
The Commissioner's interpretation of the Code seeks to avoid real or apparent conflicts of interest. In practical terms, the Commissioner's current interpretation of the Code means that:
- If you run a local candidate's election campaign and, after the election, she becomes a federal Cabinet minister, then you likely cannot lobby her without breaching the Code.
- If you have a friend, relative, or business associate in Parliament, you likely cannot lobby them without breaching the Code.
- If you provide a gift, favour, or benefit — anything of value — to a federal official whom you are lobbying or will lobby, you are likely breaching the Code.
The first of these rules is most directly engaged during an election campaign. With appropriate policies and procedures, leaders in the private and non-profit sectors can ensure that their political activities, and those of their employees, during election season do not impede their organization's work once the ballots are counted and the business of government starts anew.
This election law update provides general guidance on what Canada's lobbying rules could mean for you or your business in the run up to the 2019 federal elections. If you have specific questions or concerns, please contact Awi Sinha or Adam Goldenberg. We would be pleased to assist you.
The Lobbyists' Code of Conduct
Earlier this year, the Commissioner revised her office's interpretation of three key provisions of the Code: Rules 7, 8, 9, and 10. These rules, and particularly Rule 9, will shape how organizations, their employees and consultants interact with federal officials during and after an election campaign.
Rule 9 of the Code concerns political activities. It potentially applies to anyone who becomes significantly involved in an election campaign. If you help someone get elected, then Rule 9 (as the Commissioner has interpreted it) may prevent you from lobbying them or their staff until after the next election.
Whether this prohibition applies to you will depend on whether your political activities are "higher-", "lower-", or "no-risk". The more frequent, numerous, and strategically significant your campaign-related activities are, the more likely you are to be subject to Rule 9 after voting day.
Rules 7 and 8 of the Code concern preferential access. They provide that, if you have a relationship with a federal official "that could reasonably be seen to create a sense of obligation", then you may neither lobby that federal official nor arrange for another person to meet with them.
The Commissioner has recently broadened and particularized her interpretation of these rules. Lobbying or arranging meetings is prohibited where the lobbyist and the federal official: (i) are related by blood or by marriage, up to uncles, aunts, first cousins, nieces, and nephews; (ii) have bonds of "friendship" or "affection", or "a special kinship that extends beyond simple association"; or (iii) "share an ownership, fiduciary or monetary interest in a business".
Rule 10 of the Code concerns gifts. It bars lobbyists from providing or promising anything of value to a federal official whom they are lobbying or will lobby. According to the Commissioner's updated interpretation of this rule, gifts, favours, and benefits are not allowed unless they are "provided as a normal expression of courtesy or within the customary standards that normally accompany the [federal official]'s position".
If a Cabinet minister speaks at your luncheon during the election campaign, and you give her a branded coffee mug as a token of gratitude, then you will not run afoul of Rule 10. But, if the coffee mug is gold plated, or if it contains a pair of Raptors tickets, then you will. Consider Rule 10 before inviting a federal official to anything that involves catering.
Are you a lobbyist?
Under the Lobbying Act, "lobbying" means communicating with federal public office holders2 for payment with regard to a prescribed subject matter. If you are paid to communicate with federal officials in respect of:
- the making, developing, or amending of federal legislative proposals, bills or resolutions, regulations, policies or programs; or
- the awarding of federal grants, contributions, or other financial benefits,
then you are a lobbyist under federal law, and the Lobbyists' Code of Conduct applies to you. Note that, earlier this year, the Federal Court ruled that "payment" under the Lobbying Act may include non-monetary compensation, such as "a directorship within a corporation or organization, even in circumstances where the position is voluntary".
There are two types of lobbyists:
- Consultant lobbyists are paid to communicate with federal public office holders on behalf of a client. These lobbyists may be self-employed, or they may work for government relations, public affairs, or law firms. Note that, where the communicating is done by a consultant lobbyist, the range of prescribed subject matters is slightly broader; a communication in relation to the awarding of a federal government contract is considered lobbying, and so is arranging a meeting between a public office holder and any other person.
- In-house lobbyists communicate with federal public office holders on behalf of the corporation or the organization that employs them. Once a corporation's or organization's employees collectively devote at least one workday per week to federal lobbying activities, as defined above, every employee who lobbies federal officials is considered an in-house lobbyist, and the most senior paid officer of the corporation or organization (usually the CEO or Executive Director) must register.
Are your political activities risky?
If you are a consultant lobbyist, or if your corporation or organization employs one or more in-house lobbyists, then you must keep Rule 9 of the Code safely in mind during this fall's election campaign. According to the Commissioner's guidance, individuals who undertake "higher-risk political activities" during election season should not lobby any official who benefitted from those activities, or any member of their staff, until after the following election.
The following higher-risk political activities will likely disqualify you from lobbying the politicians whom they benefit for a full election cycle:
- chairing a campaign or occupying a strategic role on a campaign team or in a party's "war room", serving in a position with a title for a registered federal party, or serving as an officer of a local riding association;
- preparing a candidate for a debate, or acting as a spokesperson for a party, candidate, campaign, or other organization; or
- organizing a fundraiser or otherwise raising funds for a federal party or local campaign.
Lower-risk political activities, like volunteering, canvassing, or scrutineering on Election Day, may also lead to a lobbying disqualification. The question, according to the Commissioner, is whether the individual's "frequent involvement or involvement in multiple such activities increases the risk of creating a sense of obligation on the part of a public office holder who benefits from them".
Note that, according to the Commissioner's interpretation of Rule 9 of the Code, simply attending fundraisers or "expressing personal political views strictly in an individual capacity" may give rise to a disqualifying sense of obligation. On the Commissioner's current view, then, an employee who frequently tweets their personal partisan views during campaign season could well risk being barred from lobbying federal officials who profit politically from their posts.
Only two activities are presently classified by the Commissioner as being of "no risk": displaying campaign signs or posters, and making personal campaign contributions. According to the Commissioner, putting a sign on your lawn or cutting a candidate a cheque will not affect your ability to communicate with federal officials after the election.
If you, or any of your employees, are paid to communicate with federal officials, then it will be important to keep Canada's lobbying laws in mind during the election campaign. Political involvement can have post-election consequences for your business. If you or others in your organization will interact with politicians and political parties this election season, take the time to ensure that your internal policies and procedures comply with the rules outlined above.
2 Under s. 2(1) of the Lobbying Act, "public office holder means any officer or employee" of the federal Crown, including: Senators, Members of Parliament, and their staff; federal appointees; officers, directors, and employees of federal boards, commissions, and tribunals; and members of the Canadian Armed Forces and the RCMP.
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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.