Information & Ethics Committee on Dec. 13th, 2011

[Scott Andrews, Liberal, Avalon, NL]

Commercial crimes, okay, that's the section.

Looking again at the nine recommendations, are there any priority recommendations here, ones that you would say need to be done, or are they all equal?

[Karen Shepherd]

If I had to choose, it would be the significant amount of duties test and the ability to issue administrative monetary penalties.

[Scott Andrews, Liberal, Avalon, NL]

I want to ask about recommendation number 1. We talked about it a little bit. I think Mr. Leblanc was talking about the aspect of “given to allowing limited exemptions”. Get rid of the duties and then give us the power to have some limited exceptions.

Do you want to give us a little bit more detail about what these exemptions would be and how you would handle it? Is there going to be a list? Let's talk about the exemptions part.

[Karen Shepherd]

I'd like to explore this with Parliament in terms of who Parliament really thinks should be captured by the legislation who maybe is not being captured because of the “significant part of duties” test. Again, we're looking at transparency, on the one hand, so that others—Canadians and so on—know who's lobbying. At the same time, there is a balance. The barriers shouldn't be undue so that people can't actually get to their members of Parliament.

From an administration point of view, the reason I'm saying there should be limited exemptions is that if it's too long a list, that becomes problematic. For example, in Alberta, if it's a non-profit organization that has charitable status, they do not need to register. The City of Toronto has something similar to that for community groups. A gas station owner that maybe wants to come to speak to you in your local riding is probably somebody Parliament doesn't want to capture as a lobbyist. How do we get out one-time encounters with certain firms. Is it using the Canada Revenue Agency, in terms of their limit on charitable organizations?

[Scott Andrews, Liberal, Avalon, NL]

Did you say Alberta?

[The Chair, NDP, Jean Crowder]

Mr. Andrews, I've allowed the commissioner to respond, but your time is well up. Thank you.

Mrs. Davidson.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

Thanks very much, Madam Chair, and thanks very much, Commissioner, for being with us. It's been an interesting discussion this morning.

You have talked a little bit about the differences in some of the provincial legislation. What about internationally? How do we compare with other countries, such as the U.K., the U.S., or Australia?

[Karen Shepherd]

The U.K. has actually come to us in terms of making some of their changes. I was mentioning earlier that when I look even at the U.S., I think Canada, at the federal level, has quite a strong regime. The suggestions I have put forward are only for strengthening the act and making it more transparent. I think we are one of the leading models out there.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

Will the suggestions you have put forward align us more closely with most of the provinces?

[Karen Shepherd]

The provinces don't have the requirement to issue monthly communication reports. That is something that exists only at the federal level. Again, the changes are more to strengthen it for those lobbying at the federal level in terms of making it more transparent.

The one thing, as I mentioned, the provinces have that we don't have, or that I don't have at the federal level, is the ability to issue administrative monetary penalties. B.C. and Alberta have it. That is something that I think is important.

[René Leblanc]

In terms of a significant amount of duties or a significant part of duties, some provinces have recognized the limitations in terms of applying that provision and have gone to an hours model rather than our own interpretation, which is based on percentages.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

I find the 20% rather confusing. If you went to number of hours, would that be based on a weekly amount, a monthly amount, or...?

[Karen Shepherd]

That would be something to consider. I don't have the exact formula in my head. I know that some of them actually have 100 hours. One of the provinces includes preparation and so on, and it is explicitly in the act. When are they hitting the 100 hours? Is it hitting the 100 hours within a month or six months? My concern, maybe, with going strictly with hours is looking at what time period those hours are going to occur in. If you say 100 hours over six months, then you may not get certain groups registering. I think, again, when you're looking at the purpose of the Lobbying Act in terms of giving Canadians confidence in the integrity of government decision-making, things that are actually occurring need to be transparent.

If the suggestion by Parliament is to replace significant amount of duties with hours, then I would want to discuss limiting the hours and maybe the period of time during which they occur.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

When you speak about monetary penalties, I'm not quite clear. Are you speaking of monetary penalities versus referring to the RCMP, or as well as referring? Where does the differentiation come in? How do you determine what would be a monetary penalty issue and what would be a referral?

[Karen Shepherd]

This is an area in which I'm asking Parliament: is there a need or a desire to keep the criminal aspect in?

Right now, an infraction of the act is considered criminal, which is why I'm required, if I see a breach of the act, to suspend my file and send it over to the RCMP. There's quite a gap between education and those two extreme measures, referrals to the RCMP and reports to Parliament.

It could be that all of the powers of issuing administrative penalties rest with the Office of the Commissioner of Lobbying; that's one matter. Then there was a comment that we might want to go higher than $25,000.

Right now there's no option at my disposal. If I were looking at some of the unregistered lobbying, especially for not registering a meeting that was arranged, that's a breach of the act. If it's done when the individual is unregistered as a consultant lobbyist, I'm referring it to the RCMP. That's something for which I would, for sure, issue an administrative monetary penalty.

The situation yesterday was severe, so the question is, do we keep it criminal or do we give me the ability to issue an administrative monetary penalty that is fairly substantial?

[The Chair, NDP, Jean Crowder]

Ms. Davidson, your time is up. Thank you.

Mr. Angus.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

This has been a fascinating discussion.

I think it's been clear that we all agree we don't want to change the act to interfere with legitimate organizations, businesses, and groups meeting with parliamentarians. What we are obviously disagreeing on is what happens in a case such as you just referred to, of severe breaches by people who decide to break the rules and undermine the process and who basically are given a “get out of jail free” card.

You've made, at least twice, clear recommendations that we should hear from the RCMP. We've heard that over the last 23 years there has never been a prosecution; the RCMP rubber stamps whatever act anybody has ever done and says they're not going to investigate. And yet you're forced to suspend your work while this goes on, which I believe then interferes with Parliament's ability to actually get to the bottom of a situation. It allows government, for example, in the case of Mr. Jaffer, to put off the day of reckoning down the road.

Yet when we bring forward support for your recommendation to have the RCMP come before us, the Conservatives don't want to have anything to do with examining what role the RCMP is playing, whether they do any investigation whatsoever, and why they've never bothered to consider a case that, as you say, was severe and that merits any follow-up.

I have a question I'd like to ask you. Given that my colleagues across the table obviously are doing whatever they can to keep the RCMP out of this investigation, we are led back to either asking Mr. Jaffer to write an essay on the theme “I will not be bad anymore” or to invoking an administrative monetary penalty.

Do you believe this is the only other recourse we have at this point?

[Karen Shepherd]

In terms of my ability to do something, having the administrative monetary penalty system would make a big difference, yes.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Okay.

I'm interested, because, again, we're not talking about the people who come and fill out the forms and who are there on a weekly basis or a monthly basis, or maybe just once a year. We're talking about people who are peddling their influence.

Mr. Jaffer was not an expert in green energy, but he knew people. He knew people very well. He had been in the caucus for 10 or 13 years. He kept his MP's card. He had his wife's BlackBerry. He had access to a cabinet minister's office. So clearly it would have been in the interest of someone looking to get on the inside track to ask him to make phone calls. That's what we're trying to deal with here in terms of making sure people aren't breaking the rules.

You said this case was severe, and in your recommendations you stated the obligation to register. You had four basic issues. One was that the requests for government funding are considered to be communication in respect of “the awarding of a grant, contribution or other financial benefit”, even if the requests are not lengthy in detailed proposals.

I guess what I'm asking and thinking of here is that you have someone who's a prime insider who knows everybody, who's been buddies with people in key elements of government, and you bring him in on a project and ask him to make some phone calls that open doors.... Are you saying that if they bring in another former Conservative MP or insider and ask him to make some calls on behalf of a company, the calls themselves are what is opening the doors to the contract, not necessarily big detailed proposals? At what level do we need to be aware of this so we can flag this behaviour and decide whether or not this is actually lobbying or some kind of influence peddling?

[Karen Shepherd]

In terms of communicating on a registerable activity, that falls within the Lobbying Act. I think, as my legal counsel was explaining earlier, if you get into an influence peddling situation, that's different: that's a criminal charge in terms of I guess the situation that was described earlier.

[Charlie Angus, NDP, Timmins—James Bay, ON]

But the RCMP never seem to step in, so you're our only line of defence here. So would it not be important that we make sure we have some provisions? And what would you recommend so that we can flag these issues before they become criminal?

Someone might not know, someone might not realize they're making a mistake, but if it was flagged early, you could phone them and say, if you're making calls on behalf of this company, you might have only made two or three calls, but you're making them to key people and you should register. The person may not realize that they're actually skirting the rules here, but you're our only line of defence, because obviously the RCMP is not going to do anything.

[Karen Shepherd]

This is one of the reasons I'm suggesting taking out “be arranged” and just keeping things to be oral. That's one way of helping to simplify things, and also removing.... If that same public office holder initiates the particular conversation as well, unless it's about a financial benefit...those encounters aren't being captured at all.

Again, it's a significant amount of duties test. There could be corporations that are doing a fair amount of lobbying that do not need to be registered under the current act.

[The Chair, NDP, Jean Crowder]

Your time's up, Mr. Angus. Thank you.

Mr. Leblanc, I'll allow you a brief comment before I go to Mr. Dykstra.

[René Leblanc]

The member mentioned picking up the phone and calling somebody. Arranging a meeting is a registerable activity under the act for a consultant lobbyist if they are paid to do so. So if you're considering eliminating the requirement for payment, that opens a big door. I just wanted to make sure you were aware of that.

[The Chair, NDP, Jean Crowder]

Thank you, Monsieur Leblanc.

Mr. Dykstra, welcome to the committee. You have five minutes.