Bill C-2 (Historical)

Federal Accountability Act

An Act providing for conflict of interest rules, restrictions on election financing and measures respecting administrative transparency, oversight and accountability

Part 1 enacts the Conflict of Interest Act and makes consequential amendments in furtherance of that Act. That Act sets out substantive prohibitions governing public office holders. Compliance with the Act is a deemed term and condition of a public office holder’s appointment or employment. The Act also sets out a detailed regime of compliance measures to ensure conformity with the substantive prohibitions, certain of which apply to all public office holders and others of which apply to reporting public office holders. The Act also provides for a regime of detailed post-employment rules. Finally, the Act establishes a complaints regime, sets out the powers of investigation of the Commissioner and provides for public reporting as well as a regime of administrative monetary penalties.
Amongst other matters, the consequential amendments to the Parliament of Canada Act provide for the appointment and office of the Conflict of Interest and Ethics Commissioner along with his or her tenure, expenses, duties and other administrative matters.
Part 1 also amends the Canada Elections Act to
(a) reduce to $1,000 the amount that an individual may contribute annually to a registered party, and create a distinct $1,000 annual limit on contributions to the registered associations, the nomination contestants and the candidates of a registered party;
(b) reduce to $1,000 the amount that an individual may contribute to an independent candidate or to a leadership contestant;
(c) reduce to $1,000 the amount that a nomination contestant, a candidate or a leadership contestant may contribute to his or her own campaign in addition to the $1,000 limit on individual contributions;
(d) totally ban contributions by corporations, trade unions and associations by repealing the exception that allows them to make an annual contribution of $1,000 to the registered associations, the candidates and the nomination contestants of a registered party and a contribution of $1,000 to an independent candidate during an election period;
(e) ban cash donations of more than $20, and reduce to $20 the amount that may be contributed before a receipt must be issued or, in the case of anonymous contributions following a general solicitation at a meeting, before certain record-keeping requirements must be met; and
(f) increase to 5 years after the day on which the Commissioner of Canada Elections became aware of the facts giving rise to a prosecution, and to 10 years following the commission of an offence, the period within which a prosecution may be instituted.
Other amendments to the Canada Elections Act prohibit candidates from accepting gifts that could reasonably be seen to have been given to influence the candidate in the performance of his or her duties and functions as a member, if elected. The wilful contravention of this prohibition is considered to be a corrupt practice. A new disclosure requirement is introduced to require candidates to report to the Chief Electoral Officer any gifts received with a total value exceeding $500. Exceptions are provided for gifts received from relatives, as well as gifts of courtesy or of protocol. The amendments also prohibit registered parties and registered associations from transferring money to candidates directly from a trust fund.
The amendments to the Lobbyists Registration Act rename the Act and provide for the appointment by the Governor in Council of a Commissioner of Lobbying after approval by resolution of both Houses of Parliament. They broaden the scope for investigations by the Commissioner, extend to 10 years the period in respect of which contraventions may be investigated and prosecuted, and increase the penalties for an offence under the Act. In addition, they empower the Commissioner to prohibit someone who has committed an offence from lobbying for a period of up to two years, prohibit the acceptance and payment of contingency fees and prohibit certain public office holders from lobbying for a period of five years after leaving office. They require lobbyists to report their lobbying activities involving certain public office holders and permit the Commissioner to request those office holders to confirm or correct the information reported by lobbyists.
Amendments to the Parliament of Canada Act prohibit members of the House of Commons from accepting benefits or income from certain trusts and require them to disclose all trusts to the Conflict of Interest and Ethics Commissioner. The amendments also authorize the Conflict of Interest and Ethics Commissioner to issue orders requiring members to terminate most trusts and prohibiting them from using the proceeds from their termination for political purposes. In cases where the trusts are not required to be terminated, the amendments authorize the Conflict of Interest and Ethics Commissioner to make orders prohibiting members from using the trusts for political purposes. An offence is created for members who do not comply with such orders. The amendments also provide that, in the event of a prosecution, a committee of the House of Commons may issue an opinion that is to be provided to the judge before whom the proceedings are held.
Finally, Part 1 amends the Public Service Employment Act to remove the right of employees in ministers’ offices to be appointed without competition to positions in the public service for which the Public Service Commission considers them qualified.
Part 2 harmonizes the appointment and removal provisions relating to certain officers.
Amendments to the Parliament of Canada Act establish within the Library of Parliament a position to be known as the Parliamentary Budget Officer, whose mandate is to provide objective analysis to the Senate and House of Commons about the estimates of the government, the state of the nation’s finances and trends in the national economy, to undertake research into those things when requested to do so by certain Parliamentary committees, and to provide estimates of the costs of proposals contained in Bills introduced by members of Parliament other than in their capacity as ministers of the Crown. The amendments also provide the Parliamentary Budget Officer with a right of access to data that are necessary for the performance of his or her mandate.
Part 3 enacts the Director of Public Prosecutions Act which provides for the appointment of the Director of Public Prosecutions and one or more Deputy Directors. That Act gives the Director the authority to initiate and conduct criminal prosecutions on behalf of the Crown that are under the jurisdiction of the Attorney General of Canada. That Act also provides that the Director has the power to make binding and final decisions as to whether to prosecute, unless the Attorney General of Canada directs otherwise, and that such directives must be in writing and published in the Canada Gazette. The Director holds office for a non-renewable term of seven years during good behaviour and is the Deputy Attorney General of Canada for the purposes of carrying out the work of the office. The Director is given responsibility, in place of the Commissioner of Canada Elections, for prosecutions of offences under the Canada Elections Act.
Part 3 also amends the Access to Information Act to ensure that all parent Crown corporations, and their wholly-owned subsidiaries, within the meaning of section 83 of the Financial Administration Act are encompassed by the definition “government institution” in section 3 of the Access to Information Act and to add five officers, five foundations and the Canadian Wheat Board to Schedule I of that Act. It adjusts some of the exemption provisions accordingly and includes new exemptions or exclusions relating to the added officers and the Crown corporations. It empowers the Governor in Council to prescribe criteria for adding a body or an office to Schedule I and requires Ministers to publish annual reports of all expenses incurred by their offices and paid out of the Consolidated Revenue Fund. It adds any of those same officers and foundations that are not already included in the schedule to the Privacy Act to that schedule, ensures that all of those parent Crown corporations and subsidiaries are encompassed by the definition “government institution” in section 3 of that Act, and makes other consequential amendments to that Act. It amends the Export Development Act to include a provision for the confidentiality of information. It revises certain procedures relating to the processing of requests and handling of complaints and allows for increases to the number of investigators the Information Commissioner may designate to examine records related to defence and national security.
Amendments to the Library and Archives of Canada Act provide for an obligation to send final reports on government public opinion research to the Library and Archives of Canada.
Finally, Part 3 amends the Public Servants Disclosure Protection Act to
(a) establish the Public Servants Disclosure Protection Tribunal and empower it to make remedial orders in favour of victims of reprisal and to order disciplinary action against the person or persons who took the reprisal;
(b) provide for the protection of all Canadians, not only public servants, who report government wrongdoings to the Public Sector Integrity Commissioner;
(c) remove the Governor in Council’s ability to delete the name of Crown corporations and other public bodies from the schedule to the Act;
(d) require the prompt public reporting by chief executives and the Public Sector Integrity Commissioner of cases of wrongdoing; and
(e) permit the Public Sector Integrity Commissioner to provide access to legal advice relating to the Act.
Part 4 amends the Financial Administration Act to create a new schedule that identifies and designates certain officials as accounting officers and, within the framework of their appropriate minister’s responsibilities and accountability to Parliament, sets out the matters for which they are accountable before the appropriate committees of Parliament. A regime for the resolution of issues related to the interpretation or application of a policy, directive or standard issued by the Treasury Board is established along with a requirement that the Treasury Board provide a copy of its decision to the Auditor General of Canada.
Part 4 also amends the Financial Administration Act and the Criminal Code to create indictable offences for fraud with respect to public money or money of a Crown corporation, and makes persons convicted of those offences ineligible to be employed by the Crown or the corporation or to otherwise contract with the Crown.
Other amendments to the Financial Administration Act clarify the authority of the Treasury Board to act on behalf of the Queen’s Privy Council for Canada on matters related to internal audit in the federal public administration. They also set out the deputy head’s responsibility for ensuring that there is an internal audit capacity appropriate to the needs of the department and requires them, subject to directives of the Treasury Board, to establish an audit committee. The Financial Administration Act, the Farm Credit Canada Act and the Public Sector Pension Investment Board Act are amended to require Crown corporations to establish audit committees composed of members who are not officers or employees of the corporation. Other amendments to the Financial Administration Act require, subject to directions of the Treasury Board, that all grant and contribution programs be reviewed at least every five years to ensure their relevance and effectiveness.
Amendments made to the Financial Administration Act and to the constituent legislation of a number of Crown corporations provide for appointments of directors for up to four years from a current maximum of three years.
Part 4 also amends the Canadian Dairy Commission Act, the Enterprise Cape Breton Corporation Act and the National Capital Act to require different individuals to perform the duties of chair of the Board of Directors and chief executive officer of the corporation.
Part 5 amends the Auditor General Act by expanding the class of recipients of grants, contributions and loans into which the Auditor General of Canada may inquire as to the use of funds, whether received from Her Majesty in right of Canada or a Crown corporation. Other amendments provide certain immunities to the Auditor General.
Amendments to the Department of Public Works and Government Services Act provide for the appointment and mandate of a Procurement Auditor.
Part 5 also amends the Financial Administration Act to provide for a government commitment to fairness, openness and transparency in government contract bidding, and a regulation-making power to deem certain clauses to be set out in government contracts in relation to prohibiting the payment of contingency fees and respecting corruption and collusion in the bidding process for procurement contracts, declarations by bidders in respect of specific criminal offences, and the provision of information to the Auditor General of Canada by recipients under funding agreements.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

I have a second question, if I have a little time remaining, Mr. Chairman.

The day before yesterday, the Auditor General told us in her presentation that to discharge their mandates, she and the Treasury Board Secretariat have a number of challenges to deal with. For example, she pointed out that strong leadership was needed. I asked her where this leadership had to come from: from the political or managerial side, senior managers? She said clearly that political leadership was needed.

Do you feel that the coming into force of Bill C-2 would make up for a lack of political leadership?

[Brian O'Neal, Committee Researcher]

Mr. Chairman, I was just explaining that last week I received a phone call from parliamentary liaison people at Treasury Board Secretariat. At that time I made it very clear to them that this meeting was about the Comptroller General--his role in issues like expenditure management, but particularly with an emphasis on this change in status of deputy ministers that will come after the Federal Accountability Act has been adopted. It was made very clear to them over the phone. I suppose that perhaps information was not conveyed properly to other people at the secretariat.

[The Chair, Liberal, Shawn Murphy]

Well, I think we're here.... I was half-expecting to hear more from Monsieur St-Jean. We have a lot of issues, and I have mentioned about four of them that I think this committee is very interested in exploring. Mr. Fonberg gave an excellent presentation on the estimates process; I didn't detect anything new in that. All of that, of course, is important.

Mr. St-Jean, we just concluded a very important chapter on what I consider to be a dispute as to the treatment of an accounting issue. There didn't seem to be any protocol in government as to how this was to be handled. It was done in a very ad hoc way; it was not the way you would expect any kind of organized system to deal with this issue. We've tabled our report; it's well-known that this committee is not pleased with the way it was handled.

These are some of the issues. Of course one of the outcomes of this study, one of the most important items, is related to our expectation that the Federal Accountability Act will eventually become law. The day it becomes law, the deputy ministers and the agency heads of the crown corporations will all become accounting officers before this committee.

There are some in government who think that won't change anything--it'll just be business as usual. It won't mean anything. There are some of us actually around this table who think it will mean a fundamental change; that is one of the very important vital issues we want to get at. With that, there has to be the establishment of a protocol as to the duties of the deputies, the manner in which they come here, and what is expected of them. I would have thought that would be coming from the leadership of the Comptroller General. Of course, the committee has had all kinds of concerns over the years about the internal audit function; that's been a bone in our saddle for years.

These are some of the issues that we want to flesh out going forward in this particular study.

I turn it over to you before we go to the questions, Monsieur St-Jean.

Federal Accountability Act

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, yesterday marked the first anniversary of the release of the Gomery report. The report was an unequivocal condemnation of the Liberal Party and its practices. The Gomery report turned out to be a lifting of the cloak of secrecy off the Liberal Party, revealing a culture of entitlement, corruption and gross mismanagement of taxpayers' money.

Thankfully Canada's new government introduced the federal accountability act as its first order of business. Regretfully, a full year after the release of the Gomery report, Bill C-2 has still not been enacted into law.

Despite the unanimous consent of the House, the Liberal controlled Senate has stalled, delayed, refused, undermined and attempted to dismantle legislation that is designed to restore the faith of Canadians in their political system.

Bill C-2 has been carefully considered, debated sufficiently and is supported by the people of Canada, including the constituents in the riding of Peterborough. Let us get on with passing Bill C-2 and stop the shenanigans in the unelected Senate.

[Paul Dewar, NDP, Ottawa Centre, ON]

Okay.

With that in mind, I will then direct my question to CIDA vis-à-vis.... I was going to ask about grants, and you're talking about having accountability, and everyone applauds that.

My question is, in a time when we're talking about accountability--I was on the Bill C-2 committee for accountability, and the direction of the government, and most people would support that direction.... I'm quite concerned and a bit disturbed that we're going in the direction of grants, because when you tell me or other Canadians that we're going to have accountability and aid effectiveness, it's very hard for us to measure that when we go through the World Bank, when we go through other agencies, where we don't have a window on it, and we should. I'm going to ask a follow-up question on that.

My question is, why are we going in this direction of grants instead of the other aid methods that have worked so well in the past?

[Bernard Shapiro]

As I said in response to Mr. Peterson, we're not having problems recruiting at the moment. There's a potential issue, but Bill C-2 will make that far easier than it has been up till now. I'm not prepared to say whether there'd be much of an increase in personnel.

I'll try to give you some idea of why the costs are high, other than the inclusion of the Senate, which may or may not occur. The bill gives the code legal status, as legislation. It will require legal services to be developed inside the office itself. The bill requires much more data to be collected, kept, and produced. This in turn will generate a whole range of IT problems. Our estimates may be overestimates. It's not possible to say. We'll wait and see what the bill actually produces. I think we'll be ready. We've discussed it a lot and I think we'll be ready.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

I'd like to say hello to the whole team.

My question is somewhat similar to that of Mr. Wallace.

It appears you're doing a kind of operational planning for next year, based on both last year's operations and those planned for the future.

Has your planning taken into account the additional responsibilities you will have to take on under Bill C-2? Can you translate that into figures? Earlier you talked about a supplementary budget, and you answered Mr. Wallace that the Treasury Board seemed to have set aside funding for that purpose. I imagine that people at your office are able to tell us what your estimates are in that area.

[Bernard Shapiro]

Internally, we have begun to develop some idea of this. We started on it quite seriously a few months ago. Then, when the form in which this legislation would pass became less clear, along with the time when it would be passed, we put the matter aside for the moment.

It's my understanding that Treasury Board has set aside a sum of money for the implementation of Bill C-2—not just for our office, but for all affected offices—and we'll have to request funds from that source when the time comes.

[Lyne Robinson-Dalpé]

No. Once again, our 2007-2008 main estimates will be based on our operational requirements of the moment. If Bill C-2 passes, we will have to go for supplementary estimates at that point in time.

[Mike Wallace, Conservative, Burlington, ON]

Does that include Bill C-2 passing?

[Bernard Shapiro]

I think that is something that's being developed, actually. Bill C-2 takes that into account. If it should pass in its current form, or roughly its current form, that would be an issue behind us.

[Bernard Shapiro, Ethics Commissioner, Office of the Ethics Commissioner]

Thank you very much, Mr. Chair and members of the committee.

First, thank you for having invited me to meet with the committee. Before I proceed, I wish to introduce my officials who are with me today: the Deputy Commissioner, Mr. Robert Benson; the Director, Strategy and Policy, Mr. Stephen Tsang; the Director, Corporate Affairs, Ms. Lyne Robinson-Dalpé; and the Director, Communications and Parliamentary Relations, Ms. Micheline Rondeau-Parent.

My appearance today is in relation to my office's 2006-2007 main estimates. This is the third year of our activities, and it represents, in some sense, the anchor year in terms of our operations and budgetary requirements. That is, relative to at least the current arrangements, we've arrived at what I believe is the appropriate stabilizing level. The total amount requested for 2006-2007 is $5.051 million. By comparison, for last year, our first full financial year, we sought and received $4.675 million.

Our current year's request represents an 8% increase over last year. This relates solely to an increase in the cost of the provision of services from our parliamentary partners, namely, an increase of $220,000 in the memorandum of understanding with the House of Commons with respect to the provision of information technology services, and an increase of $250,000 in the memorandum of understanding with the Library of Parliament with respect to the provision of financial, procurement, administrative, and library services.

It is important to note that our main estimates requirements assume that the mandate and functions of the office remain the same. Although my office has taken some preliminary measures in preparation for the possible coming into force of Bill C-2, the proposed Federal Accountability Act, our estimates for 2006-2007 do not take into account any budgetary requirements that may result from its enactment. Should the bill be enacted during this current financial year, supplementary estimates will be sought, if needed.

I would now like to provide you with a brief contextual perspective of our budgetary requirements. As members are aware, my office is relatively new, as it was created on May 17, 2004. Our first year, 2004-2005, was a transition year. We sought and obtained $3.7 million for 10.5 months of activity. This enabled us to bridge our operations towards the creation of a new office as a unique and separate entity under the Parliament of Canada Act, outside the purview of the executive branch of government.

Our second year, 2005-2006, was a development year. This was our first full year of activity and our first full-year request as a new parliamentary entity. We sought and received, as I said earlier, a little more than $4.5 million. The increase from the previous year was attributable to our operational needs for a full year, particularly in the area of salaries and benefits related to a significant increase in the number of personnel, the provision of legal and investigative services, and costs for new services previously rendered and absorbed by other government entities.

This year, 2006-2007, is a year of stability and status quo, as already explained earlier. As detailed above, it is a flat budget, since it does not require any additional operating funds.

On a general matter related to our budget, I would like to discuss another, more general consideration. As some members may be aware, since the fall of 2005, i.e. the launching of our new Web site, in a spirit of transparency, we have posted all our expenditures. These present the Office's entire budget's expenditures, not only those related to travel or hospitality, as is the case for all government organizations. That practice is ongoing as anyone can drill down a budget, in relation to each line object and see where each dollar has been spent. In order to keep them relevant, these are updated monthly.

You may recall that during my appearance before your committee on September 20, some members requested information with respect to past estimates. In response, I sent a letter to the chair, dated October 3, in which I provided, in appendix, further information and clarification on the specific issues raised. I assume that members have been provided with copies of this correspondence.

Finally, the Parliament of Canada Act provides my office with a distinct financial mechanism through which the Speaker of the House of Commons considers the office's requirements and transmits them to the president of the Treasury Board. Last year this committee tabled its report entitled “A New Process for Funding Officers of Parliament”, which listed my office as a participant in the recommendation that established a budgetary panel for a two-year pilot project.

The pilot project process prescribed that officers would “provide their annual budget submission directly to the panel along with an accompanying submission by the Treasury Board Secretariat. As an officer of Parliament under the Parliament of Canada Act, I wrote to Speaker Milliken, as chair of the panel, to clarify this process. On November 23, 2005, he responded, confirming that, “I am in agreement that, in the current context, there is no role for the Treasury Board in the review of your budget requirements”.

Although my office has not been called before the panel, should the Speaker of the House of Commons wish to refer my budget submission to a review panel, I'd be pleased to participate, noting that my office does not operate within exactly the same context and parameters as do the agents of Parliament.

I thank you for your attention. My officials and I would be pleased to answer your questions and address any issues related to our 2006-2007 Estimates or any other related matter, including further clarification related to my October 3 letter.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, on October 23, I put a question to the Minister of Public Works and Government Services. I noticed that he was not in the House. Since the election on January 23, the minister, Michael Fortier, has been like a ghost. He has been missing. It is funny that I should be asking my question this evening, because it is Hallowe'en. He must be hiding somewhere.

Hon. members will remember that when the Conservative Party was in opposition, it said it had principles. One of those principles was that the Senate should be elected. Another principle is that no one should represent the government, especially in a department, without being elected.

Right after the January 2006 election, to Canadians' astonishment, the new Conservative government decided to appoint Michael Fortier as Minister of Public Works and, in addition, as a senator. Just like that, two principles were swept away in the Ottawa River. They were lost.

In response to my question for the government, I was told that Mr. Fortier is doing a good job and that he is representing the government and Montrealers well. But how can the government judge whether Mr. Fortier is representing the people of Montreal well? We mentioned the election in Repentigny. This is the perfect opportunity for him to run. But it seems he is afraid of losing. If he is afraid of losing, or if the government is afraid of losing him, perhaps he is not doing such a great job of representing the people of Montreal.

The worst part is seeing a governing party that believed strongly in democracy when it was in opposition. A person must be elected to represent Canadians. Now, in Quebec, there is no need to be elected.

I remember when the Liberal government appointed Pierre Pettigrew to cabinet. A Liberal member resigned and there was an election. The government did not wait for an election: somebody resigned—or died, as is the case in Repentigny—and then an election was held.

That is also what happened to the member for Saint-Laurent—Cartierville. He was appointed to cabinet at the same time, so one of the Liberal members resigned. An election followed.

Today's Conservative Party, which was in opposition at the time, opposed the Liberal appointments. Now it is talking about Bill C-2, the accountability act.

Can the Conservatives explain to Canadians and to parliamentarians why the Minister of Public Works is not answering questions in the House of Commons? He is hiding in the Senate to avoid answering Canadians. It is shameful.

I would like an answer from the government. I am hoping they do not just tell me he is doing a good job, as they did on October 23. It is not up to the government to decide that. It is up to the citizens. I await the parliamentary secretary's answer.

[Sheila Fraser]

In 2004, we prepared a report about the sponsorships audit and then carried out a study of general roles and responsibilities within the public service. On the one hand, this study indicated that the roles needed to be clarified, particularly the roles of the minister and the deputy minister, and that it was necessary to identify who was responsible for what; on the other hand, it showed that many documents could be confusing, because terms such as "accountable", rendre compte in French, and "answerable" were used, even though the latter has a different connotation. At the end of the line, no one was answerable or accountable.

I cannot comment on the policies set out in Bill C-2. Nevertheless, this bill clarifies everyone's roles. Needless to say, everything will depend on how the act is implemented. It is essential that all deputy ministers be aware of precisely what their role is and what they are accountable for.

[Richard Nadeau, Bloc, Gatineau, QC]

All right. You have just given us an overview of this scandal, which, let us hope, was an isolated incident.

Bill C-2, which is before the Senate, increases the accountability of deputy ministers.

I am not sure whether this is the right place to talk about it, but I will raise the issue anyway. My understanding is that accountability is shared by both administrative and political officials, whether they are political appointees or government deputy ministers, who must also be accountable to a minister for their activities.

It is expected that Bill C-2 will be enacted. Will it be able to help prevent future breaks in the audit chain?