The Ontario government announced on May 16, 2016, that amendments to the province’s lobbying legislation will come into force on July 1, 2016. These amendments will impact not only lobbyists, but also businesses and other organizations that employ in-house lobbyists or hire consultant lobbyists.
The upcoming changes to the Ontario Lobbyists Registration Act (Act) were first proposed in March 2014, and passed in December 2014. For further information, please see our August 2014 Blakes Bulletin: Bill Proposes Changes to Ontario’s Lobbying Legislation and our January 2015 Blakes Bulletin: Lobbying Legislation Changes for Communicating with Ontario and Alberta Governments.
Most notably, effective as of July 1, 2016:
- There will be a lower registration threshold for in-house lobbyists, which will be determined on an organization-wide basis rather than an individual basis
- The most senior officer of a company will be responsible for filing returns, rather than the individual lobbyist, and the most senior officer of a company employing any in-house lobbyist must file a new registration by September 1, 2016, even if the senior officer and/or the individual in-house lobbyists are already registered
- Additional disclosures will be required in lobbyist returns, and updated returns will be required on a more frequent basis than before
- It will be prohibited to pay contingency fees to a consultant lobbyist
- The Lobbyist Registrar will have broader investigative powers and there will be harsher financial and reputational penalties for non-compliance
These and several other significant changes are discussed in further detail below.
The amendments to the Act harmonize the filing requirements for in-house lobbyists employed by “persons and partnerships” and in-house lobbyists employed by “organizations”. Under the current Act, the responsibility for filing returns for in-house lobbyists employed by a corporation or partnership rests with the individual doing the lobbying, while the responsibility for filing returns for in-house lobbyists employed by an “organization” (such as a not-for-profit organization) rests with the organization’s most senior officer. As of July 1, 2016, the most senior officer of any entity that employs in-house lobbyists will be responsible for filing lobbying returns.
When the amendments are proclaimed on July 1, 2016, the senior officer of a for-profit entity that employs an in-house lobbyist must file a new registration for the entity within two months, and any existing registrations for individual in-house lobbyists of that entity will be required to be terminated.
As a result of this new responsibility, senior officers of companies will need to ensure that there are policies and procedures in place for monitoring their employees’ lobbying. Even if the senior officer is not involved in any lobbying activities whatsoever, under the new rules, he or she will still be the one responsible for filing returns if any employees are engaging in registrable lobbying activities. If a senior officer fails to register as required under the new rules, the senior officer will be guilty of an offence and liable for a fine of up to C$100,000.
NEW 50-HOUR REGISTRATION THRESHOLD
Under the current rules and under the new rules, any amount of lobbying by a consultant lobbyist requires registration, but lobbying by in-house lobbyists only requires registration if it meets a certain threshold. Under the current rules, an employee of a corporation or partnership is required to register if he or she spends 20 per cent or more of his or her time over any three-month period lobbying one or more Ontario public office holders. For organizations, the 20 per cent threshold applies on an organization-wide basis, such that registration is required if all of the employees’ collective time spent lobbying would amount to 20 per cent of the duties of a single employee.
Under the new rules, there will no longer be a 20-per-cent test for either type of in-house lobbyist. As of July 1, 2016, the senior officer of either a for-profit or not-for-profit entity will be required to file a return on behalf of the entity if any one or more employees or paid directors, alone or collectively with all other employees and paid directors, spends 50 hours a year lobbying one or more Ontario public office holders. Not only is this a much lower threshold than before, but because of the new entity-wide (rather than individual) approach, corporations should be aware that they may be required to file a return even if they do not have a dedicated in-house lobbyist.
CONTENTS OF RETURNS
As of July 1, 2016, the registration forms for consultant and in-house lobbyists will contain several new questions regarding:
- The goal of the lobbying
- Whether the lobbyist is a former public office holder (the disclosure required here will be broader than it is under the federal regime, and will not be subject to any time limit)
- The person(s) being lobbied (including the identity of a minister, member of provincial parliament or any of their respective staff members and the names of any government ministries, agencies, boards and commissions where the target of the lobbying is employed)
The amended Act also contemplates that additional disclosure requirements may be added by way of regulations.
RENEWAL FILINGS TIMELINE
The amendments to the Act will loosen the timelines for renewals of returns. The frequency of the renewals will remain the same (every 12 months for consultant lobbyists and not-for-profit in-house lobbyists, and every six months for corporate in-house lobbyists), but the timeline for filing renewed in-house lobbyist returns will be more flexible, as the senior officer will be able to file the renewal within 30 days either before or after the expiration of each six-month period after the date of filing the previous return.
This same timeline will apply to consultant lobbyist renewals. This shifts the timeline back by 30 days, as under the current Act, renewals to consultant lobbyist returns must be filed within two months of the anniversary. Under the amended Act, it will be required within 30 days either before or after the registration anniversary.
Changes to information in lobbyist returns will still be required within 30 days.
As of July 1, 2016, there will be a blanket prohibit on the payment of contingency fees to consultant lobbyists. Any existing contracts providing for contingency payments will remain valid until July 1, 2017, at which point they will become void.
CONFLICTS OF INTEREST
Ontario public office holders have legal obligations to avoid certain conflicts of interest, as set out in statutes such as the Members’ Integrity Act, 1994. As of July 1, 2016, there will be corresponding legal obligations on lobbyists to avoid placing public officer holders in prohibited conflicts of interest.
Under the new rules, it will be prohibited for any lobbyist to knowingly place a public office holder in a position of real or potential conflict of interest. The phrase “a position of real or potential conflict of interest” is defined by reference to certain sections of the Members’ Integrity Act, which forbids public office holders from:
- Participating in making an official decision if there is an opportunity to further their private interest or improperly to further another person’s private interest
- Using non-public official information to further their private interest or improperly to further another person’s private interest
- Using their office to seek to influence a decision to be made by another person so as to further their private interest or improperly to further another person’s private interest
- Accepting fees, gifts and personal benefits that are directly or indirectly connected to the performance of their official duties
In light of these new conflict of interest rules, organizations will need to be especially careful about providing meals and entertainment to public office holders, and should ensure that employees are aware of these restrictions.
The amendments impose additional conflict of interest restrictions on consultant lobbyists. Under the amended Act, it will be prohibited for a consultant lobbyist to provide paid advice to a public office holder on any subject on which it is also lobbying a public office holder, or to lobby a public office holder on any subject on which it is providing paid advice to a public office holder.
ADDITIONAL POWERS OF THE LOBBYISTS REGISTRAR
As of July 1, 2016, the Lobbyists Registrar will have authority to investigate alleged breaches of the Act. The Lobbyists Registrar’s new investigative powers will include the ability to conduct an investigation (subject to a two-year limitation period), to compel a person to provide any information or documents that may be relevant to the investigation, to issue summons, and to apply for an order of the Superior Court of Justice directing a person to provide information or documents. A person who is required to provide evidence or information to the Lobbyists Registrar as part of an investigation, will have a right to counsel and will be entitled to the other protections of the Canada Evidence Act.
The Lobbyists Registrar will not be required to notify any person who is being investigated until the investigation is complete, and even then, will only be required to notify the person if the investigation concludes that a breach of the Act or related regulations has occurred. If the investigation leads to a finding of non-compliance, the investigated person will have an opportunity to respond, including to apply for a reconsideration and/or judicial review of the Lobbyists Registrar’s decision.
In addition to these new investigative powers, the amended Act clarifies that the Lobbyists Registrar may issue a code of conduct for lobbyists (in addition to advisory opinions and interpretation bulletins, which are contemplated under the current Act).
HARSHER PENALTIES FOR NON-COMPLIANCE
Under the existing rules, the maximum fine for a breach of the Act is C$25,000. Under the new rules, C$25,000 is still the maximum fine for a first offence, but for any subsequent offence, the maximum fine is C$100,000.
The new Act also empowers the Lobbyists Registrar to impose the following non-financial penalties on a person who has breached the Act or related regulations:
- A prohibition on lobbying for up to two years
- Public disclosure of:
- The offending person’s name
- The description of the non-compliance
- Any other information the Lobbyists Registrar considers necessary to explain the finding of non-compliance
Note that, since the senior officer of an entity is now the one responsible for filing returns, non-compliance arising out of improper registrations (for example, failure to file a return, failure to update a return, or misleading information in a return) will expose the senior officer to these penalties.
The amended Act encourages open dialogue with the Lobbyists Registrar by providing protections to persons who disclose information to the Lobbyists Registrar or give evidence in an investigation under the Act. As of July 1, 2016, it will be expressly prohibited to discourage a person from disclosing information to the Lobbyists Registrar or giving evidence in an investigation under the Act, or to retaliate in any way against a person who has done so. Prohibited retaliation includes, but is not limited to, dismissal from employment, any other penalty, intimidation, coercion and harassment.
The new Act also provides that no action or proceeding shall be commenced against a person for disclosing information or giving evidence to the Lobbyists Registrar as part of an investigation unless the person acted maliciously or in bad faith.
The upcoming amendments to Ontario’s lobbying legislation are substantial and will impact both lobbyists and the entities that employ them. The amendments — and the Act as a whole — will be re-assessed again in the near future, as they are to be the subject of a comprehensive review by a committee of the Legislative Assembly. The amended Act requires this legislative review to begin within five years of the amendments coming into force (i.e., by July 1, 2021), with recommendations to be made within one year after the review process begins.