Information & Ethics Committee on April 20th, 2010

[The Chair, Liberal, Paul Szabo]

I call the meeting to order.

This is meeting number 8 of the Standing Committee on Access to Information, Privacy and Ethics. Our orders of the day are pursuant to Standing Order 81(4). We will be dealing with the main estimates for 2010-11, specifically vote 40 under Treasury Board, which was referred to the committee on Wednesday, March 3, 2010.

Our witnesses today are the Commissioner of Lobbying, Ms. Karen E. Shepherd, Deputy Commissioner René Leblanc, and Bruce Bergen, senior counsel. Welcome to all of you.

We're dealing with your estimates.

Commissioner, it's good to see you again. We have some new members and I know they're going to want to have an opportunity to introduce themselves to you, probably at the end of the meeting as well.

Let's move on.

I understand you have an opening comment. I'd ask you to proceed now.

[Karen Shepherd, Commissioner of Lobbying, Office of the Commissioner of Lobbying]

Thank you, Mr. Chair and members of the committee. I am pleased to be here today to provide you with an overview of my accomplishments from the past year and outline my priorities for 2010-2011.

I am joined today by René Leblanc, the new Deputy Commissioner, and Bruce Bergen, Senior Legal Counsel. My mandate comes from the Lobbying Act. There are three activities that help me fulfill this mandate: maintaining the Registry of Lobbyists, raising awareness of the Lobbying Act and the Lobbyists’ Code of Conduct, and ensuring compliance with both.

The registry is the online application used by lobbyists to register and record lobbying activities. It is also the tool the public uses to search and retrieve information on these activities.

When the Lobbying Act came into force, the registration requirements had changed, and lobbyists were required to resubmit their registrations. This created a significant backlog because each registration needed to be updated to meet the new requirements. My office then verified the information before it could be posted and made available to the public. At any given time, my office was verifying over 1,000 pending registrations per month. I am proud to say that this backlog was completely eliminated this past year.

The number of registered lobbyists has stabilized at around 3,500, which represents a reduction of almost 30% since the coming into force of the Lobbying Act. Some in-house lobbyists have indicated that the additional reporting requirements introduced in 2008 led corporations and organizations to rationalize their approach and reduce the number of employees engaged in lobbying activities. This, combined with the impact of the economic downturn, may explain the reduction in the number of registered lobbyists. However, my office has experienced an increase in the number of transactions in the registry, primarily due to the new requirements for lobbyists to disclose communications with designated public office holders on a monthly basis.

As I stated earlier, my mandate includes fostering awareness of the requirements of the Lobbying Act. In the past year, I used a variety of approaches, such as presentations, and written and electronic documents to explain the requirements of the Lobbying Act to various audiences. The Web continues to be a cost-efficient way to distribute our outreach material and provide information on the Lobbying Act.

Education is one means of increasing compliance and must be complemented with a program of monitoring, verification, and investigation to ensure compliance with the Lobbying Act and the lobbyists’ code of conduct.

My office continuously monitors publicly available information to identify lobbying activities and verifies that the activity is properly registered. Last year, my office verified nearly 300 individuals, corporations, and organizations after learning that they may have lobbied federal public office holders. My office found that 90% of them had filed returns in the registry of lobbyists.

Last year, my office also verified over 400 monthly communication reports by contacting the designated public office holders listed in the reports. A small percentage of them contained errors, such as incorrect dates or job titles, and in some cases the communication did not necessitate a report, as it was not carried out orally or arranged in advance. To ensure that information in the registry of lobbyists is accurate and complete, my office will continue to take steps to have registrants amend or delete incorrect entries.

This past year I initiated 16 new administrative reviews to look into suspected or alleged contraventions of the Lobbying Act or the lobbyists’ code of conduct that were brought to my attention, either through monitoring activities or complaints. These reviews include background research, in-depth interviews, and searches of the registry and other publicly available information. The information is analyzed and a comprehensive report is prepared to assist me in determining a suitable means of ensuring compliance. Last year, my office completed 10 administrative reviews.

If there is reason to believe an investigation is necessary to ensure compliance with the Lobbying Act or the Lobbyists’ Code of Conduct, I will initiate a formal investigation. Last year, I opened three new investigations. Once they are finalized, the Lobbying Act requires that I table a report, which includes my findings and conclusions, to both houses of Parliament.

If, during the course of an investigation, I believe on reasonable grounds that a person has committed an offence under the Lobbying Act or any other act of Parliament, or under a provincial act, I must advise a peace officer who has jurisdiction to investigate the alleged offence. Last year, four files were referred to the Royal Canadian Mounted Police for investigation.

As I said at my last committee appearance, and for the benefit of new members, I would like to state that subsection 10.4(3) of the Lobbying Act instructs me to conduct investigations in private. Therefore, I will not comment on specific cases, nor will I confirm or deny that I am looking into a file.

A five-year prohibition on lobbying the federal government after “designated” public office holders leave office was introduced into the Lobbying Act in 2008. These former designated public office holders may apply for an exemption from the five-year prohibition. I have the authority to grant one if to do so is not contrary to the purposes of the act.

Since the Lobbying Act came into force, I have granted only three exemptions. As I stated during my last appearance before this committee, I grant exemptions on an exceptional basis only.

Also, at my last committee appearance, I mentioned that I would issue new guidance on rule 8 of the lobbyists' code of conduct on conflict of interest, in accordance with the Federal Court of Appeal decision. In November 2009, I provided guidance to lobbyists regarding the application of rule 8. The guidance is designed to assist lobbyists in determining whether the activities they engage in could create a conflict of interest, or the appearance of a conflict of interest, for a public office holder.

I would now like to explain some organizational changes I made to the office. I implemented plans to improve the capacity of the organization in helping me meet accountabilities and fulfill my mandate. I created the position of deputy commissioner and appointed Mr. René Leblanc so that the corporate functions of my office would be consolidated under one executive.

I would now like to turn your attention to the priorities for this year. As a small organization, my office has accomplished much in its first two years to advance the transparency of lobbying activities. This year, I intend to build on our successes to refine and streamline our operations, which will allow me to administer the Lobbying Act even more effectively.

My budget for this fiscal year is $4.6 million. I currently have 25 full-time employees. I am pleased to note that my office has not experienced a high turnover of employees. However, as a small organization, even one vacancy can have an impact on my office’s operations. I therefore have and will continue to use a variety of staffing measures to fill vacancies.

This year I will continue to invest significant resources into maintaining and improving the registry of lobbyists. I plan to establish more rigorous monitoring practices to ensure performance standards. I also intend to implement and monitor new client service standards for registration activities. Over 30% of my budget is dedicated to my registration program.

With respect to outreach activities, I will continue to use several approaches to reach various audiences and raise awareness about the act and the code. Outreach activities represent about 20% of my budget. I will continue to meet with groups of lobbyists to discuss the requirements of the Lobbying Act, exchange information and answer questions.

I would also like to continue to focus activities this year on raising awareness among public office-holders, including parliamentarians, as they meet with lobbyists on a regular basis.

I also plan to reach out to the academic community by visiting universities that have programs focused on public policy and public management to inform them about the Lobbying Act and discuss my role as Commissioner of Lobbying.

This year my office will implement a more rigorous case management system to make it easier for the investigation team to track progress on a growing caseload. At any given time, my office has a caseload of about 50 files of varying complexity. These include administrative reviews, investigations, and reviews of applications for exemption from the five-year prohibition on lobbying. The cost of ensuring compliance is nearly 30% of my budget.

In closing, I would like to note that the Lobbying Act is eligible for its five-year review this June. I look forward to working with Parliament, as required, to provide my views on the legislation. To this end, I have asked my staff to start reviewing and gathering information on our experience in administering the legislation since 2005.

Mr. Chair, this concludes my remarks. I look forward to answering any questions you or the committee members may have.

[The Chair, Liberal, Paul Szabo]

Thank you very much, Commissioner.

I want you to know that the committee has already noted the legislative requirement to do the five-year review of the Lobbying Act. That will commence once it's referred to us by the House.

Thank you very much.

We will start our questions with Mr. Easter, please, for seven minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Thank you, folks, for coming.

I think you made it fairly clear in your remarks that you won't comment on specific cases; you won't confirm or deny a certain file. So that changes our approach a little bit.

We know there is a specific case in the news these days. There seems to be a lot of confusion when it comes to public office holders versus designated public office holders, and the differences between the two. Could you explain that? And where does a parliamentary secretary fall?

[Karen Shepherd]

As I sometimes say, if you were to throw a stone down on the city of Ottawa you would probably hit a public officer holder. But I'll pull out the definition.

The designated public office holder is a specific group that the government has identified. It includes ministers, ministers of state, and their staff; deputy heads and assistant deputy heads; and assistant deputy ministers and those of comparable rank, which I have defined in a bulletin. An additional 11 were designated through regulations, primarily to cover individuals in the forces and individuals who were order in council in the Privy Council Office.

Parliamentary secretaries are not designated as public office holders.

[Wayne Easter, Liberal, Malpeque, PE]

If a parliamentary secretary has been delegated authority for any activity by a minister, I take it that activity doesn't meet the criteria of the Lobbying Act. Should it meet the criteria?

From having been in government, I know that ministers and parliamentary secretaries don't all work the same. Pierre throws spears for the Prime Minister lots of times. There are others who are quite quiet. But every minister operates differently with their parliamentary secretary. Some give them lots of authority and some give them none.

If a parliamentary secretary has been designated certain files, be they on infrastructure or anything else, does that activity fall under the Lobbying Act now? You may not want to answer this, but from your point of view, should it?

[Karen Shepherd]

I guess there are two questions. In terms of an individual who would be communicating with a public office holder--which a parliamentary secretary is--they would need to determine whether an initial registration is filed.

What is not required, because the parliamentary secretary is not a designated public office holder, is the requirement to file a monthly communication report in terms of a monthly communication. The communication with the public office holder--if it is communicating--is still defined under the act as registerable activity.

[Wayne Easter, Liberal, Malpeque, PE]

Let me put it this way. Does a lobbyist or anyone seeking a grant from a public office holder have to report that contact? I'm talking about a public office holder, which is a parliamentary secretary. Does anyone seeking a grant from a public office holder have to report that contact?

[Karen Shepherd]

Again we're into the difference between the need to file an initial registration.... If the individual is communicating with a public office holder on a registerable activity--it's defined in the act as someone who is receiving payment to communicate for the making, development, or amendment to any proposal or legislation, bill or regulation, or the awarding of any federal grant or contribution. The communication month captures all types of communication, so it's written communication, oral communication. All of those would determine whether an initial registration would then have to be filed. The monthly communication, according to the act, is with a designated public office holder.

[Wayne Easter, Liberal, Malpeque, PE]

I think we have a serious problem here in terms of the role of a parliamentary secretary. They're not designated public office holders, yet they have, depending on the minister, access to the minister, the department, all the senior officials. They sit and chat with the minister, so if an individual or a lobbyist is really pushing a specific project, they can go to the parliamentary secretary and in a roundabout way bypass the Lobbying Act. Is that not correct, you're just going through a third party?

[Karen Shepherd]

Again, if you're trying to capture the monthly communication with the DPOH, it does not have to be reported. But the lobbyist or the individual would still need to be filing a registration because that's still a registerable activity.

[Wayne Easter, Liberal, Malpeque, PE]

Okay.

[The Chair, Liberal, Paul Szabo]

Thank you.

Ms. Thi Lac, you have the floor.

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

Good morning, and thank you for being here today. I will go ahead with my first question.

In your view, Madam Commissioner, what are the biggest challenges that your office will face in the next few years?

[Karen Shepherd]

In terms of registration, we must constantly work on our system to ensure that lobbyists can register themselves. We have adopted many measures so that lobbyists can continue to do their work in the event of a technical difficulty. I am very proud of my team because we are always ready when changes to the act are discussed. The important thing is to carry out educational activities on an ongoing basis, and to ensure that we use all the methods available so people understand the reasons and requirements related to the act, as well as the proper procedure. So we do a lot of work in terms of putting sytems in place, especially the electronic system. I have also had many meetings with public office-holders and given presentations because, as I said, they are the ones who meet with lobbyists.

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you.

Do you think the current lobbying legislation is in keeping with Parliament's intent, which was to create an entity that is totally independent from politics? Do you have all the political independence you need to carry out your mandate?

[Karen Shepherd]

If I understand correctly, you are asking whether I have the independence to do what I want. I would have to say yes. Absolutely. The government does not tell me when to do or not do an investigation. I have the budget and staff necessary to do what I think needs to be done. I am independent. No one tells me how I should do my job.

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

The commission is fairly new. Given what you have accomplished in the past two years, what do you think needs improvement?

[Karen Shepherd]

As you said, our organization is fairly young, but there is always room for improvement. I created the position of deputy commissioner in order to consolidate all of the organization's functions in one place, in other words, human resources, finance, technology and information management, media relations and communications. My director of registration and my investigators can now spend their time doing their jobs directly. Before....

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

I will put my question in a different way. What were the biggest hurdles you faced during the past two years?

[Karen Shepherd]

Honestly, I cannot name any major hurdles. On our end, the legislation that came into force did not include the two-month transition period, as in 2005, and we experienced a backlog of registrations, as a result. The team had to work overtime to eliminate the backlog, on top of doing its regular work. That was a big challenge for us. I am very proud of my team members who worked on that.

As for investigators, the new legislation came with new requirements. So they had to implement the required procedures.

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

You said that your biggest challenge, your priority, is streamlining your operations. What do you mean by that?

[Karen Shepherd]

I will use investigations as an example. With the new legislation coming into force, we had to review all of our practices and procedures and make the necessary changes so that investigators could perform their duties, namely, administrative reviews and investigations. As for streamlining, based on our experience with the procedures, we can create models. More time has to be spent looking at the information from the political standpoint. With the procedures in place, we can streamline by taking certain steps to move files along more efficiently. But, by the same token, we cannot sacrifice quality just to move files along.

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

Do you think your budget is large enough to meet the objectives you set for yourselves in terms of carrying out all your plans for the coming years?

[Karen Shepherd]

As I said, I have a budget of $4.6 million. So far, I would say that it is sufficient. But, as a small organization, I cannot do the same thing as a large department and take the money from another area if something unforeseen or urgent comes up.

For instance, my decisions can be reviewed by the courts. If a number of my cases were before the courts, I would not have the budget for that.