On December 1, 2015, a number of amendments to the Lobbyists’ Code of Conduct (the Code) will come into force. The amendments have the potential to alter the ability of certain persons in the private sector to communicate with Federal Government officials known as public office holders (POHs) under the Lobbying Act (the Act).
Briefly, by way of background, the Act requires the Commissioner of Lobbying of Canada (Commissioner) to develop a code that will apply when a lobby registration is required under the Act, whether or not a registration has actually been filed. The first version of the Code came into effect in 1997. At the time, while it was described as assuring the Canadian public that lobbying is done ethically, it was viewed as simply containing motherhood statements. For anyone communicating with a POH, the focus was on ensuring compliance with the Act. It was usually assumed that by taking measures to comply with the Act, there would be a corresponding compliance with the Code.
The current Commissioner began consultations in 2013, and by 2014, had published a revised Code, engaged in further consultations and referred the proposed changes to the appropriate House of Commons Committee. The result is that the Code is now based on four principles and ten rules. This will focus on the five revised rules that may impact lobbying conducted by corporations and organizations.
Rule 4: The most senior paid employee of a corporation or organization, who has the responsibility to file any lobby registration pursuant to the Act, now has a responsibility under the Code to ensure that employees who engage in lobbying activities on behalf of the organization or corporation are aware of their obligations under the Act and the Code.
Rule 6: This is a key provision that triggers the remaining rules. Lobbyists must not propose or undertake any action that would place a POH in a real or apparent conflict of interest. In a Guidance provided by the Commissioner, a conflict of interest is described as a situation where an individual’s judgment is influenced, or might be influenced, from making decisions in an organization’s or corporation’s best interest due to a competing sense of obligation. Therefore, the Commissioner considers a conflict of interest exists when there is a perception that a POH’s private interest may influence their performance when carrying out their official duties.
According to the Commissioner in her Guidance, the remaining Rules (7-10), will assist lobbyists in not taking actions that might place a POH in a conflict of interest.
Rule 7: This Rule and Rule 8 are collectively described as Rules respecting “preferential access.” These Rules will, for the first time, prohibit a lobbyist from arranging a meeting with a POH or lobbying a POH when the lobbyist and the POH share a relationship that could reasonably be seen to create a sense of obligation. In her Guidance on these two Rules, the Commissioner has described the following types of relationships that risk creating the perception of preferential access:
- Friends: This includes relationships where a lobbyist and a POH share a close bond of friendship, a feeling of affection, or a special kinship that extends beyond simple association. This would not include members of a lobbyist’s broad social or business circle, where there is little emotional attachment.
- Family: This means a lobbyist’s immediate family, by blood or by marriage, and would include parents, siblings, children of the lobbyist, and those of their spouse/partner.
- Business: This means a lobbyist with whom a POH is a business partner.
To repeat, these two Rules will prohibit in-house lobbyists in corporations or organizations from lobbying such POHs or from arranging meetings with them on behalf of their employer.
Rule 9: This Rule addresses political activities. Lobbyists will now be prohibited from lobbying someone who becomes a POH when they have undertaken political activities on behalf of that person, which could reasonably be seen to create a sense of obligation. If the person has become an elected official, then the lobbyist is also prohibited from lobbying staff in their office(s). In her Guidance on this Rule, the Commissioner has provided examples of political activities that do not carry risk of creating a sense of obligation and that would not place the POH in a conflict of interest. The Commissioner also provides examples of other types of activities which do pose a risk of a sense of obligation that could reasonably be seen to place a POH in a conflict of interest (using an objective test).
Examples that do not carry risk:
- Placing a candidate’s campaign sign on one’s lawn;
- Scrutineering for a candidate;
- Speaking on a political panel when the lobbyist is expressing his or her own views as an individual;
- Purchasing a ticket to and attending a fundraising event when that expenditure is within the limits established by the Canada Elections Act; or
- Donating money to an election campaign within the limits established in the Canada Elections Act.
Examples of other types of political activities which do pose a risk are as follows:
- Serving on the Executive or Board of Directors of a candidate’s electoral district association;
- Serving as a campaign chair or in another strategic role on a campaign team;
- Serving in a named position on behalf of a candidate or electoral district association as set out in theCanada Elections Act;
- Leading the preparation of a candidate for debates or providing strategic advice in the context of debate preparation; or
- Organizing a fundraising event for an electoral district association or campaign.
In her Guidance, the Commissioner has added a third category where there is also a risk of creating a sense of obligation when the political activities have been conducted at the regional or national level. Examples of these activities include:
- Serving in a named position on behalf of a registered party as set out in the Canada Elections Act;
- Serving in a paid campaign staff position or in another strategic role on a regional or national campaign team;
- Acting as a designated party spokesperson;
- Writing speeches for the party leader;
- Working in a strategic capacity in a party’s war room; or
- Leading debate preparation for the party leader or providing strategic advice in the context of debate preparation.
The Commissioner, in her Guidance, has recognized that the sense of obligation towards a lobbyist created as a result of a lobbyist’s political activities is likely to decrease over time. As a result, the Commissioner is of the view that a maximum of five years is a sufficient period of time to wait before lobbying the POH and/or his or her staff. The Commissioner may clarify the timeframe that is currently expressed as “a maximum of five years”.
Rule 10: To avoid creating a sense of obligation, lobbyists will now be prohibited from providing or promising a gift, favour or other benefit to a POH whom they are lobbying or will lobby, which the POH is forbidden to accept. The Commissioner has defined a “gift” as including, “anything of value, given for free or at a reduced rate, when there is no obligation to repay” (annotated Lobbyists Code of Conduct). It is important to recognize that in addition to this rule, there are a number of other provisions that can be applicable to the acceptability of a gift for a POH. In this respect, note that the issue of “gifts” involves the intersection of provisions enforced by the Commissioner under the Act, and the Conflict of Interest and Ethics Commissioner and her administration of the Conflict of Interest Act. Examples provided by the Commissioner of documents that lobbyists could consult include:
- Conflict of Interest Act (applies to Ministers, Ministers of State, Parliamentary Secretaries, their staff, and GIC appointees, including Deputy Ministers)
- Conflict of Interest Code for Members (applies to Members of Parliament)
- Ethics and Conflict of Interest Code for Senators
- Values and Ethics Code for the Public Sector
- Organizational Values and Ethics Codes (all departments are required to develop a Values and Ethics Code. Some departments have posted their Codes on their websites.)
In her Guidance, the Commissioner has also acknowledged that gifts can be acceptable when they are given as an expression of courtesy, protocol or hospitality when a POH is carrying out job-related duties. The Commissioner has provided the following examples as including:
- Refreshments/meals served at an event where the POH has a role to play. These circumstances could include ceremonial or presentational roles, or active participation by a POH as a representative of the government, or a federal department or agency.
- Tickets to a public event such as a community event or charitable fundraiser given by event organizers to a Member of Parliament for events in their riding or region.
- A gift given following an appearance, speech, or presentation as a token of thanks or appreciation.
Having given those examples, the Commissioner cautions that lobbyists should not give a POH—whom they are lobbying or will lobby—tickets to charitable or other events when the tickets are at a reduced cost or no cost. It will be acceptable to charge the POH the actual cost of the ticket (e.g., the cost the lobbyist paid for the ticket or, if the cost of the ticket price included a charitable receipt, the cost of the ticket minus the amounts of the charitable receipt).
Boards of directors
The lobby provisions described above apply to employees of corporations and organizations in their role as in-house lobbyists. The Commissioner has issued an Advisory Opinion expressing her official view on the application of the Act and Code to outside chairpersons and members of boards of directors. In that Advisory Opinion, the Commissioner stated that if the chairperson or member of the board is not an employee of the company or organization in an employee-employer relationship, and if they receive remuneration beyond reimbursement of expenses, then there is a requirement for registration as a consultant lobbyist if they engage in prescribed communications with POHs. Because the chairperson or members of the board of a corporation or organization are not employees, they are considered by the Commissioner to be a consultant lobbyist, which can invoke additional requirements with respect to the provisions in the Act and the Code.
The new provisions added to the Code will now potentially prohibit certain persons (described above) from engaging in lobbying activities and all persons from engaging in activities, such as giving a gift. These prohibitions are not part of the Act, and their introduction through the Code, which is not a statutory instrument and which is amended unilaterally by the Commissioner, raises legal issues which may require resolution. That is a topic for another day.
As noted at the beginning of this alert, one of the reasons the Code has not been given prominent consideration in the past is that the original principles and rules were largely considered as motherhood statements that would usually be addressed in the context of completing a lobby registration.
The Code was also not taken as seriously as the Act because it is not a statutory instrument and does not carry any fines or possible jail terms. Nevertheless, the Commissioner, having first determined a person has engaged in lobbying under the Act, can open an investigation when she has further reason to believe one is necessary to ensure compliance with the Code. Her resulting report carries the same potential for adverse publicity as does her enforcement actions pursuant to the Act.
With that background, there is reason to believe that enforcement activity pursuant to the Act and Code will be every bit as vigilant—and potentially even more vigilant—than was the case in the past. Consider as well the statement by Prime Minister Trudeau immediately after his swearing in and the swearing in of his Cabinet where he stated, in part:
“We will shine more light on government …Openness and transparency will be our constant companions…”
Simply stated, corporations and organizations will be well-advised to conduct a fresh examination of how they organize and conduct communication with POHs to ensure ongoing compliance with the Act and the newly-revised Code.