Bill C-2 (39th Parliament, 1st Session) Committee on June 14th, 2006

[The Chair, Conservative, David Tilson]

We're now on amendment NDP-26, on page 194.

Mr. Dewar, could you move that, please?

[Paul Dewar, NDP, Ottawa Centre, ON]

I move amendment NDP-26, Chair.

If we take a look at the intent of this section, we are looking at how we regulate and deal with areas of government, and one of the areas of government that is very important to us is how lobbying is dealt with. We've discussed lobbying before, and we've discussed contingency fees. We've discussed the registry. We've discussed the fact that lobbying needs to be cleaned up in this town. I won't go over the horror stories of what happens when lobbying is not regulated.

What we need to do is make sure this is going to be something that is all-encompassing. We have one crack at this for now, and that is to make sure that lobbying is something that is done responsibly--and there are responsible lobbyists in this town.

When I look back to what we had put forward in our ethics package that Mr. Broadbent moved before the election, one of the key things he wanted to make sure of was that we wouldn't have people who are lobbying government turning around and receiving government contracts. It's a very basic notion. In fact many of the people I know who do lobbying, who are responsible lobbyists--which is the majority of them--know that to be an ethical way of doing their jobs.

You decide what kind of lobbying you're going to do. You set up your operations such that you lobby on one particular area, and you don't confuse things. In other words, it's like two separate circles; it's not like a Venn diagram. When we have people who are lobbying government one day turning around and getting government contracts the next, we end up with this kind of Venn diagram. It's not only confusing, but I would say it's not ethical, because you're receiving contracts from people one day, the next day you're lobbying, and it goes on and on.

Canadians aren't aware of this, by and large. Most people outside of this town didn't know this was an issue until recently. We want to make sure this is dealt with. We want to make sure that people who are lobbying one day don't turn around and get a contract the next day. We want to put up a wall that doesn't have holes in it, so there are no tunnels that people can crawl through to get to the other side.

What this amendment does is ensure that contracts for the performance of work, the supply of goods, or the rendering of services not be awarded to firms that normally lobby the Government of Canada.

I have talked to people about this. To a person, no one disagrees with this. I can't imagine why anyone would disagree with this. If there are other concerns, let's have them. But in terms of the ethical behaviour of how people lobby and how they receive contracts, it's pretty clear. People in my constituency don't have connections that they can one day turn into lucrative contracts. That's the kind of thing we need to steer away from.

That's the essence of this motion, the motivation behind it. It's to finally cement the difference between what it is to lobby and what it is to garner influence from that lobby, which is to be able to get government contracts.

[The Chair, Conservative, David Tilson]

Mr. Lukiwski.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Thank you, Mr. Chair.

I'd like to ask our technical experts for an opinion. I know how you have to interpret the clauses that are going to be adopted into this bill very diligently, and if you're interpreting the term “normally”, I wonder how that affects this. He said “firms that normally lobby the government”. What does “normally” mean? Does that mean if you've lobbied the government sometime in the past, you can't ever receive a government contract? Or is it someone who lobbies the government 10 times a month? I just don't know what the classification “normally” means.

I'd like an overall assessment from the technical panel, but with particular emphasis on that.

[Joe Wild]

Mr. Chair, with respect to the question of “normally”, it's certainly a vague term in law. So there is a vagueness in the use of that word. Given that this is, again, being designed as a discretionary regulation that the Governor in Council would be passing, the Governor in Council could, in the regulation, give more precision to what “normally” means.

That being said, I think it's important that the committee be aware that there may be implications under Canada's trade agreements. Once you get over the $100,000-for-service and the $25,000-for-goods contracts, there are requirements in terms of open bidding, and there are very specific areas where the government is allowed to close off competition. I'm not aware of any area under any of the internal or international trade agreements that would allow the government to close off competition from a lobby firm.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

I just want to be clear on this. Are you saying that the government might be in violation of international trade agreements if we passed this clause?

[Joe Wild]

The passage of the clause would simply set up the authority to issue a regulation. If the regulation were ever issued--

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Enforced.

[Joe Wild]

--unless trade agreements were first amended to allow for the possibility of basically creating preferential treatment for non-lobby firms--in other words, if you somehow tried to get into the trade agreements that you could discriminate against a lobby firm in an open, competitive bidding process--then yes, there is the potential that those regulations would violate Canada's trade agreement obligations.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

I'll ask you what's undoubtedly an unfair question. How likely is it that you could get those provisions put into international trade agreements?

[Joe Wild]

All of them? It would take a matter of years, if not decades, I would think, of negotiation.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Thank you.

[The Chair, Conservative, David Tilson]

Mr. Dewar.

[Paul Dewar, NDP, Ottawa Centre, ON]

I'd just like to go back to that point. I appreciate your concerns there. We share them. The intent of this amendment is to talk about people who are registered lobbyists who lobby the Government of Canada. We're not talking about, at least in intent, people who are international in scope, as you say.

To set up rules--and I look to you to clarify--here and perhaps in other jurisdictions, and to make sure that people who are registered lobbyists, as everyone is required to be.... We're talking about the ones in the registry who will be within its scope. That's who we're talking about here. I'm not sure about the leap to the international trade agreements. That's certainly not where this amendment was going in terms of intent, so I'd hate to have it go global on me in terms of practice.

[Joe Wild]

I think the issue you would face would be the agreement on internal trade. Assuming that the lobbyist registry only contains Canadian lobby firms or lobbyists who are Canadian, the issue, then, would be the agreement on internal trade. Again, for over $100,000 for services and over $25,000 for contracts, it requires the government to offer an open, competitive, fair bidding process.

The question would be: how could you offer an open, competitive, fair bidding process for some given service if you're going to discriminate against a class of firms because they conduct lobbying activities? That's where it creates the potential for this violation of the obligations on the government under the agreement on internal trade.

[Paul Dewar, NDP, Ottawa Centre, ON]

Let's say this amendment was passed, then, and it was on the road to being enacted. Would there not be any legal bumps along the road, without having to get into trade agreements or agreements of that scope? It could be tailored accordingly and then go back to the committee on regulations, for instance.

[Joe Wild]

I'm not sure, Mr. Chair, that I fully followed the question.

[Paul Dewar, NDP, Ottawa Centre, ON]

Let me just put it clearly. If we pass it, put it forward, would there not be, perhaps through your office and others, a mechanism to say that we'll make sure that this doesn't have the unintended effect of having to get into areas that are beyond our abilities?

[Joe Wild]

It's certainly possible that regulations could be constructed, provided that we're only dealing with contracts under the trade agreement thresholds. So if you were talking about contracts under $100,000 for services...although even then you're going to run into a problem with the government contracts regulations, which require an open and competitive bidding process. So then you're really talking about contracts under $25,000.

For contracts that are under $25,000 for services and goods, you could potentially, I guess, create a regulatory regime that would discriminate against a certain class of service providers--maybe. The only reason I say “maybe” is that I just want to be very careful about that potential. So the government would be faced with the task of trying to find a way to carve a set of regulations that would be narrow enough in the monetary amount of contracts that it could still incorporate.

I keep saying “discriminatory” because in the procurement world that's what it is.

If you were going to do that, as long as you kept it under $25,000 you would probably be okay. But even under $25,000, while it's not a regulatory requirement, the government still tries to compete where possible. It's just the notion that if you have an open and transparent bidding process, then you only have the relevant factors coming into play on the actual criteria that you sent out and that companies are coming back and bidding against.

I'm struggling with trying to figure out how we could do the regulations. The only thing I keep coming back to is that if we were staying under $25,000, then it might be possible to do the regulations.

[The Chair, Conservative, David Tilson]

Mr. Owen.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

There's a somewhat analogous situation where audit firms are also providing consulting services, and I've wondered how we have dealt with that in the Government of Canada over time. Many of those companies have split into their auditing functions and their consulting functions, but it has been an ethical problem for some time. Have we dealt with that in our contracting practices for audit services as well as consulting services?

[Joe Wild]

I think the issue with audit companies has primarily been dealt with by the profession itself, in that it is self-regulating, with its own rules around when you can act as an auditor, and that if you are going to act as the auditor for a company, you should not then be participating in consultant service contracts with that same company or organization that you are auditing. But that, as I understand it, is done primarily through the profession's own self-regulation, as opposed to anything the government is doing.

[The Chair, Conservative, David Tilson]

All those in favour of NDP-26?

(Amendment negatived)

[The Chair, Conservative, David Tilson]

We now have amendment G-60 on page 195.

Mr. Poilievre.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

I move amendment G-60. Are there any comments from the panel?