The Provinces of British Columbia and Quebec and the City of Toronto now lead Canada in the number of lobbying law contraventions identified and sanctions imposed, according to statistical analysis performed by Fasken Martineau for the period 2014 through 2015.
These statistics are a cautionary reminder to corporate executives, industry associations and anyone engaged in dealings with government to ensure that lobbyist registrations are filed and lobbying rules are observed in all parts of Canada.
Comparison across jurisdictions is complex because lobbying laws are enforced in different ways. For example, lobbying regulators in British Columbia and Alberta have the power to impose administrative monetary penalties. In many jurisdictions (e.g., federal, Ontario, Toronto), a penalty can only be imposed by the court following a charge, prosecution and conviction. In Quebec, the Directeur des poursuites criminelles et pénales may bring charges before the court; alternatively, the Commissioner may impose a temporary lobbying ban as a disciplinary measure. In some jurisdictions the most common sanction is a public finding of contravention, such as those published in reports of the federal Commissioner and the City of Toronto Registrar at the conclusion of investigations or inquiries.
Another significant distinction is the scope of lobbying activity covered by each law. The Quebec statute governs the lobbying of all provincial and municipal officials in the Province. On the other hand, the B.C. law applies just to lobbying of provincial officials and the Toronto law covers only lobbying of municipal officials.
- Toronto reported the highest number of contraventions: 30 contraventions, involving 16 persons (individuals or companies) in nine cases.
- British Columbia sanctioned the greatest number of individuals: 17. These 17 people committed 20 contraventions in 17 cases.
- Quebec saw 22 contraventions, involving seven individuals in three cases.
- British Columbia now imposes the highest average penalties in the country: an average $942 per contravention in 2015, up from $614 per contravention in 2014.
- In Quebec, upon conviction the courts imposed a consistent fine of $500 per count in all cases. There were 16 convictions. The other six contraventions were determined by the Commissioner of Lobbying and the discipline imposed was a 45-day lobbying ban.
- Only one Toronto contravention involved prosecution and conviction in court, and the fine was $1000. The other 29 contraventions carried no penalty and consisted of findings in reports published by the Lobbyist Registrar.
- One-quarter (25%) of British Columbia contraventions involved failure to terminate a registration on time after lobbying had ended. B.C. remains the only jurisdiction in Canada to penalize individuals for being registered when no lobbying occurs.
- The most common British Columbia contravention was failure to register lobbying on time (50%) or failure to renew a registration on time (10%). The remaining contraventions (15%) involved errors in the content of registrations and failure to correct errors.
- Most of the Quebec contraventions (64%) involved lobbying without being registered. Late filing accounted for 23% of the contraventions (all by the same individual, who was disciplined by a 45-day lobbying ban).
- Registration infractions were much less common in Toronto, where the conduct of lobbyists was responsible for nearly three-quarters of total contraventions: placing public office holders in conflict (30%), prohibited lobbying during a procurement process (23%) and improper gifts to public office holders (20%). Only 23% of Toronto contraventions involved lobbying without being properly registered.
Consultant lobbyists were the primary recipients of monetary penalties in B.C. during the study period, accounting for 15 of the 17 cases. On the other hand, Toronto's findings of contravention appeared to fall evenly on in-house lobbyists and consultant lobbyists. Findings were also made against four Toronto companies that were the employers or clients of lobbyists. Quebec's enforcement action affected a mix of in-house lobbyists (known as "enterprise lobbyists" under Quebec law), senior officers (who had failed to register their employees) and a consultant.
Waiting Too Long to Register (British Columbia)
In some Canadian jurisdictions late filing might be excused, provided it is inadvertent and does not recur. The same cannot be assumed in British Columbia. As mentioned above, 60 per cent of British Columbia contraventions involved late registration or late renewal of a registration. Delayed termination of registration was responsible for an additional 25 per cent of monetary penalties.
While some filing delays have been as long as one year, recently a lapse of just 17 days led to a $700 penalty. On March 26 a consultant undertook to lobby for his client. By law he was obliged to register within ten days (by April 5). He registered instead on April 22, was subjected to an investigation and ultimately ordered to pay a penalty.
Companies, organizations and individuals who deal with the provincial officials in B.C. must pay close attention to deadlines under the Lobbyists Registration Act. Delegation to a subordinate can also be risky, as evidenced by several cases where a penalty was imposed.
Many lobbyists claimed to have been confused about the 10-day registration deadline in subsection 3(1) of the Lobbyists Registration Act. The deadline is "Within 10 days after entering into an undertaking to lobby on behalf of a client …" [emphasis added] According to the definition in subsection 1(1), "'undertaking' means an undertaking by a consultant lobbyist to lobby on behalf of a client …"
The clock starts running as soon as the lobbyist and client reach agreement that provides for lobbying as defined in the Act. Such agreement does not need to be signed or in writing. As the Registrar has observed, whether communication with a government official actually occurs is immaterial. The deadline is based on the agreement between lobbyist and client.
A lobbyist who waits to register until he or she actually meets with B.C. officials is likely to miss the deadline and be exposed to an administrative monetary penalty.
Risk of Prosecution (Quebec)
When measured by the number of charges laid or the number of convictions obtained, Quebec's lobbying-law enforcement remains the most vigorous in all of Canada. In addition to the 13 convictions entered during the study period, the Directeur des poursuites criminelles et pénales filed a further 17 charges against 5 persons. These cases have yet to be decided by the courts.
Historically, Quebec's enforcement action has touched all categories of person subject to the Lobbying Transparency and Ethics Act: consultant lobbyists, organization lobbyists, enterprise lobbyists, and senior officers.
Everyone who deals with provincial or municipal government officials in the Province of Quebec should understand and comply fully with the requirements of the Lobbying Transparency and Ethics Act.
Code of Conduct Violations (Toronto)
During the study period, the majority of Toronto's enforcement activity related not to lobbyist registration but instead to the conduct of employees and consultants who were dealing with government officials.
Article VI of Toronto's Lobbying By-law (Toronto Municipal Code, Chapter 140) is the Lobbyists' Code of Conduct. Of 30 contraventions found during 2014 and 2015, 22 (or 73 per cent) were contraventions of the Code of Conduct.
Among other prohibitions contained in Toronto's Lobbyists' Code of Conduct:
- A lobbyist must not communicate concerning a procurement process except as permitted by the applicable procurement policies and procurement documents (§ 140-41A).
- One must not lobby in a manner that involves offering entertainment, gifts, meals, trips or favours of any kind (§ 140-42A). This includes making political contributions to members of City Council.
- A lobbyist is not permitted to lobby at a charitable event, community or civic event, or similar public gathering (§ 140-42A).
- A lobbyist shall not place a Toronto public office holder in a conflict of interest or in breach of the code of conduct or standards of behaviour that apply to the public office holder (§140-45B).
Companies and organizations should ensure that their policies (e.g., policy on entertaining) are compliant with the Lobbyists' Code of Conduct. They also should train their employees in the rules governing their interaction with City officials.
Right to Counsel
Many individuals, businesses and organizations have attempted to handle lobbying compliance investigations personally or without the benefit of counsel experienced in lobbying law. The decision to handle the matter alone or without the assistance of a lobbying-law expert should not be taken lightly.
All individuals, corporations and organizations have the right to seek advice from and be represented by legal counsel in dealings with lobbying regulators, including the Office of the Registrar of Lobbying (British Columbia), the Commissaire au Lobbyisme du Québec and the Office of the Lobbyist Registrar (Toronto).
It is prudent to seek expert legal advice immediately upon being contacted by any of these regulatory bodies, and not to answer questions without benefit of legal counsel and representation.
One reason to exercise caution is that statements made, emails sent, and other communications to a regulator can be used against a lobbyist in an investigation or prosecution.
In addition to potential fines or monetary penalties, contraventions of lobbying law are matters of public record and can cause significant reputational harm.
Any company, organization or individual that has dealings (or anticipates having dealings) with federal, provincial or municipal officials in Canada should take active measures to ensure compliance with all applicable lobbying legislation.
Best practices include the following:
- Internal systems to collect up-to-date information on contacts with government officials, so that the correct reports can be filed on a timely basis
- Updating internal policies on lobbying, gifts and hospitality, political activity and communications with government
- Employee training
- A lobbying-law compliance audit
- Reviewing contracts with consultants for lobbying legal compliance
- Due-diligence processes to ensure lobbying law compliance