Bill C-2 (39th Parliament, 1st Session) Committee on May 16th, 2006

[The Chair, Conservative, David Tilson]

Good afternoon, ladies and gentlemen.

This is meeting number eight of the Legislative Committee on Bill C-2. The orders of the day, pursuant to the order of reference of Thursday, April 27, 2006, are for Bill C-2, An Act providing for conflict of interest rules, restrictions on elections financing and measures respecting administrative transparency, oversight and accountability.

Our guests today are from the Office of the Ethics Commissioner. We have with us the Ethics Commissioner, Dr. Bernard Shapiro; the deputy commissioner, Robert F. Benson; and the director of corporate affairs, Lyne Robinson-Dalpé.

Good afternoon, Dr. Shapiro. Could you proceed with a few opening remarks. As you know, I'm sure members of the committee will have a few questions for you.

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

Thank you very much.

Mr. Chairman, members of the committee, thank you for the invitation to appear before your committee today.

To begin, I would like to introduce my colleagues who are with me — Mr. Robert Benson, the Deputy Commissioner, and Ms. Lyne Robinson-Dalpé, Director of Corporate Services.

I have some brief opening remarks with respect to various issues related to Bill C-2, then I will be pleased to answer your questions.

At the outset, I want to point out that my comments will focus not on Bill C-2 generally, but on the proposed Conflict of Interest Act, which creates a new conflict of interest regime for the public office holders in the federal government.

In general, I am pleased to see many positive features in the proposed regime in which the role and mandate of the commissioner will be expanded, notably in four areas: first, responsibility for the administration and compliance of the conflict of interest code for senators; second, investigative authority to include all current and former public office-holders, not just ministers, ministers of state, and parliamentary secretaries; third, authority for the commissioner to self-initiate inquiries; and fourth, powers of the commissioner to issue notices of violations and to impose administrative penalties.

I'm also pleased to note that some of the proposals included in the act directly address some of my own concerns and recommendations raised notably in my Issues and Challenges 2005 paper issued last fall and during my appearances before parliamentary committees in the last Parliament. These include the requirement for a timely publication in the public registry of ministerial recusals from cabinet meetings and adoption of a formal mechanism by which members of Parliament can refer requests for examinations from the public to the commissioner.

However, I do have some general comments on the overall approach of the proposed Conflict of Interest Act and the implications of this approach. The most important of these is that the new act represents a fundamental shift in the federal conflict of interest regime for public office-holders from a values-based system based on explicit principles to a rules-based system enshrined in legislation, which in some ways of course strengthens the regime.

On the other hand, this change in the foundation of the conflict of interest regime has a number of potentially problematic implications, and I will just raise three.

First, the act does not include any preamble or principles upon which ethical conduct can be evaluated as in the current code and indeed in the current code for the members of the House of Commons as well. Thus there is, for example, no mention of the requirement to conserve and enhance the objectivity and impartiality of government to make decisions in the public interest and to avoid giving preferential treatment to any person.

Second, the act sets out a definition of conflict of interest for the first time, which in itself, I think, is a step forward. However, there is no explicit mention of apparent or potential conflicts of interest. If the intent of the bill is for the commissioner to deal only with situations of what are referred to as real conflicts of interest and that cases of apparent or potential conflict of interest should be dealt with in the political arena, then the current wording of the bill is probably appropriate. Otherwise it could lead to ambiguity on the exact role of the commissioner.

Third, the focus of the new model is on enforcing specific conflict of interest provisions rather than managing conflict of interest in situations that might arise. Moreover, the statutory nature of the new model will require significant legal resources to interpret and of course enforce the rules.

Nevertheless, I believe that in general a lot has been gained under the proposed act. But something of course may have been lost in terms of some of the good features in the transition from a values-based system to a rules-based system. Relative to the observations I have made, I would like therefore to suggest three proposals for your consideration.

First, I believe it would be beneficial to add a preamble to the act setting out the ethical principles that the Conflict of Interest and Ethics Commissioner would be empowered to use to interpret the act. These principles, of course, need not be the current ones. They could be a different set altogether, as long as there was some reference to standards that could be interpreted. Then if a public office-holder is engaged in an activity that might be perceived to be a conflict of interest but that is not covered specifically by the legislation, the commissioner would be able to advise, at least, on the manner in which the matter could be resolved.

Let me give you an example. Suppose a minister is faced with having to decide whether to personally approve a large amount of public funds to a business entity in the minister's own riding. In this situation, even though the minister's private interests would not be furthered, as provided in the definition of conflict of interest included in the act, I believe the public expectation is that the minister should not personally approve this funding, unless of course it is one in a series of selected business grants across Canada. However, there is nothing specific in the proposed act that would require the minister to recuse himself in this situation, as it is not considered, apparently, a conflict of interest in terms of personal financial interests. Under the current code the principles of impartiality, making decisions in the public interest, and avoiding preferential treatment to anyone would provide the rationale for requiring a recusal.

Second, it would be very helpful to the commissioner, in carrying out his or her functions and responsibilities, if he or she had some additional discretionary authority for the interpretation of the act on the basis of the principles that might be included and, as is currently the case, for the extension of compliance deadlines where warranted—for example, to deal with a large number of new clients after an election, where there's a tsunami of material coming forward as various new people are appointed.

Third, I would like to propose that a clause requiring the act to be reviewed in five years be added. I know it is getting to be a bit of an annoying habit for many members to be constantly reviewing acts that have already been passed. Nevertheless, I think it would provide an opportunity to evaluate the experiences of this new regime and to make any necessary changes.

I believe these amendments would go a long way toward meeting the intent of the act, which is, I believe, to underline the importance of accountability in general, and ethics in particular, and to provide Parliament, the public office-holders, and the Canadian public with a solid framework to achieve these results.

In addition to these three suggestions, I want to point out two provisions in the bill that will pose some interpretation and compliance challenges. Subclause 15(4) on political activities appears to be wide open on the type and extent of political activities permitted for a public office-holder, and this could engender—I'm not saying that it will, but it could—difficulties in terms of the perception that a public office-holder would be biased in carrying out his or her official duties. However, if the intent of the bill is that any apparent or perceived conflict of interest situations are to be dealt with in the political arena, and that the commissioner is only required to deal with substantive conflicts of interest, then the proposed arrangements are appropriate as they are; if not, the section could be problematic.

The current wording of proposed section 64 on the activities of ministers and parliamentary secretaries vis-à-vis their activities as parliamentarians may create some confusion. Under what circumstances exactly should a minister wear his or hat as an ordinary MP and serve the constituents? This confusion would be especially acute when the minister is asked by constituents to deal with a quasi-judicial body, or a crown corporation, on their behalf.

The last area I would like to mention is that there will be administrative challenges in the implementation of the new act and the expanded mandate of the commissioner. Additional immediate and longer-term resources will be required for inquiries and legal services, as well as for system adaptations and changes.

In addition to the issues I raised above, I do have comments on other areas of the act. Given the limited time available this afternoon, I cannot raise them all, however, I will be glad to provide them to the committee if it wishes to receive them.

Along with my colleagues, I would now be pleased to answer your questions.

[The Chair, Conservative, David Tilson]

Thank you, Dr. Shapiro.

Mr. Owen has some questions for you.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Thank you, Chair.

Dr. Shapiro, thank you for your presentation and the work you have done on behalf of Canadians in initiating the Office of the Ethics Commissioner. It's been an extremely difficult task, and Canadians should be most appreciative of the efforts you've made.

I have a couple of quick questions.

One is that when you had the opportunity after the last election to review the crossing of the floor by a person who then became a minister, I can't remember the exact words you used, but they seemed similar to your concern with respect to the need for a preamble to the act, but almost in reverse, that the code provided you with the principles that may have caused some concern, but the—

[The Chair, Conservative, David Tilson]

Mr. Owen, I took on Mr. Martin this morning on this; I feel strongly about it. I don't think we should get into personal situations. I know you haven't mentioned anyone's name, but we all know who you are speaking of, and I'd like you to try to avoid that if you can.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Fine. Thank you, Chair. I'll try to generalize a little more.

I took from previous remarks you've made that although something seemed to have perhaps offended the spirit of the rules of conduct, it had not actually offended the legislation, and that in that sort of situation you would invite Parliament to consider remedying that.

We're almost looking at the reverse here, where we've got remedies and you've made some comments about amending the statute, but adding a preamble gives you wider scope to provide advice to the people you have the responsibility to oversee in a way that can add interpretive value.

[Bernard Shapiro]

I think the operative word is advice. That is, I think that having a preamble of some sort, having some standards against which we try to interpret the meaning of the act--and the act is going to be interpreted over and over again in the event that it passes--is terribly helpful in trying to sort out the differences between situations that appear the same but are in a context that in fact makes them different. It's impossible to imagine all the rules one could ever need in administering any kind of code that relates either to conflict of interest or ethical matters in which value systems obviously differ. I think it would be helpful.

As I say, I've no particular preference for the ones we have. They've turned out to be useful in some respects, but others could easily be developed. I don't want to make that argument. I'm just arguing that something would be helpful.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Thank you.

I have just one further question and then I'll hand it over to my colleagues.

In relation to the additional responsibility the act would give for the Ethics Commissioner to have responsibility for the Senate as well, there was previously a lot of discussion within the Senate as well as outside of the value, from the Senate's point of view, of having their own ethics adviser or officer, because of concern, whether real or perceived, that an officer appointed by the executive would not have authority, in a sense, over that independent house of Parliament. I wonder if you have any concern or comment on the complication that it might provide to a single ethics commissioner.

[Bernard Shapiro]

I certainly don't want to prejudge what the Senate is going to be concerned about when they consider this bill. That was an issue the last time around; I was not present at the time and I can't comment on its details. I think one thing you said would not be helpful if it were repeated too easily, and it is that it is not envisioned that the appointment be one of the executive. The appointment is one of the House of Commons, in one case, or it could be the Senate in the other. There is a variety of different ways in which the system could be jointly managed. I think there's a lot to be said for having the operation focus on a single office rather than on multiple offices, but that would be up to the senators and the House, eventually, to decide.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Thank you.

[The Chair, Conservative, David Tilson]

Mr. Murphy has a pinch.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

In a pinch...what difference does it make whether a person is an executive assistant to an opposition critic or leader of the opposition, and then, after the government changes, is allowed to lobby the same people he or she worked with for eight or ten years--I'm keeping it hypothetical, of course, Mr. Chairman, pursuant to your direction--or whether they've been in government and leave government? What difference does it make?

Surely it's the influence, and not who they worked for and what paycheque they received. Do you see a conflict of interest as much proscribed prospectively here as there would be for someone who's been so close to someone who is now in power?

[Bernard Shapiro]

Again, these things tend to be context dependent. It's always easy to think of single examples and then try to generalize them to everybody. I think that both people who are in power obviously have access to power in certain ways, and therefore one has to be careful about what their previous associations were and how they deal with those in the context of their current environment. I think it's equally important to go the other way--that is, someone who previously had access, and is now in another context, can produce the same result and ought to be dealt with in a similar way.

[The Chair, Conservative, David Tilson]

Mr. Sauvageau.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Firstly, thank you for being here this afternoon, Mr. Shapiro.

I would like to apologize for the ill-mannered way in which we are treating you and all the other witnesses that have appeared, or will appear, before this committee. Unfortunately, an utterly unconscionable time restriction has been imposed on the committee and on you. That is probably why you ended your presentation by saying:

In addition to the issues I raised above, I do have comments on other areas of the act. Given the limited time available this afternoon, I cannot raise them all.

You were being very diplomatic. Other potential witnesses have refused to appear before the committee. I think that this situation is utterly inexcusable.

You said that you would be glad to provide your additional comments to the committee if it wishes to receive them. I do not know whether the committee wishes to receive them, but I certainly do. You can send them to me, along with any other information, through the clerk.

I would like to thank you for having suggested amendments. I do not have any questions for you. I simply wanted to make an observation, but you should feel free to respond to it if you wish.

The bill before us comprises 317 clauses and 250 pages. Yet, for the first time in 13 years, I find myself faced with a time restriction for studying the bill, a little like the time restriction imposed upon you for your presentation. The Conservatives have given us approximately two and a half weeks; I find this utterly mind-boggling. Other time restrictions are also being imposed, and the NDP has joined the bandwagon.

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

On a point of order, Mr. Chair, the member is stating that we imposed some sort of time on him. In fact, that position was made by the committee as a whole. We have the minority of representation on this committee, and the other parties agreed with it. I think the record should be corrected that we have not imposed any time as a party.

Thank you.

[The Chair, Conservative, David Tilson]

Try to do your best, Mr. Sauvageau.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Carry on speaking to your staff, Mr. Poilievre, and let me do my work. Thank you very much.

It is utterly mind-boggling that we have been given so little time to study this bill. All of the witnesses who have appeared before the committee have suggested amendments, and those who have still to appear will do the same. I would like to thank you for having proposed what I believe to be the most important amendment, that is to include a mandatory five-year review of the act, which will, inevitably, be flawed because we are being rushed in our study of it. Bear in mind that what you sow is what you reap. As I was saying, the most important amendment is probably the inclusion of a mandatory five-year review, as was provided for under C-11 last session. The Conservatives have not included a mandatory review because for them, Bill C-2 is equal to God's Ten Commandments.

I would like to hear your comments on the five-year review, the time restriction, the lack of preamble, and, time permitting, any other amendments that you believe should be made to Bill C-2.

[Bernard Shapiro]

In making the three amendments I suggested, I tried to keep in mind what appeared at least to be the legislative calendar, or what appeared to be the calendar through which this was going to be considered and then dealt with. I made no attempt whatsoever to go into a detailed clause-by-clause imagination of how a revised bill might look in trying to realize whatever the government's intentions were. I made no attempt to do that. I just focused on the things that I thought would be most useful in the context we had.

It seems to me that adding some set of criteria--as I said, the principles we had may not be the ones that are wanted; there may be others that may be more useful--that would give both the people subject to the law--because it's a law now, it's not just a guideline--and Canadians in general some idea of what the objective was. Certainly we'd be glad to work with anybody who wishes to work those out. I offer the possibility, but that's a question of what the committee wants and wishes to do. I thought that would be helpful.

On a more minor scale, the question of discretion, it seems to me, is very helpful. It needs to be limited; it can't be too wide. For example, in the current situation the government changes and there's a huge tidal wave of paper that comes to the office, and it is probably impossible to deal with in the time limits that are provided. So some discretion to let that move a little so you can deal with the odd special occasion seems to me to be a good idea.

The revision of the review, I think, would be a natural consequence of the fact you raised earlier. There hasn't been a lot of time in some ways to consider this as carefully as might otherwise have been the case, but perfection can get in the way of the goods, so to speak, to use an English expression. I think a serious attempt at review of the experience once a number of years has passed--it could be three or four or five--would be a useful idea.

Another useful idea the committee may wish to consider as it looks at the law in detail is what the implementation calendar is like. There are some things that, of course, could be implemented right away, but very careful thought should be given to which of the sections may require more work--not on the section itself, but more work to get implemented. An example is anything that requires a regulation such as fines. It's a complex process, so the development of those can't be done in any instant way. Some thought about the implementation calendar should be given, and some thought has already been given, I should say, but I think more thought would be very helpful.

[Benoît Sauvageau, Bloc, Repentigny, QC]

You are absolutely right in what you say, but, unfortunately, due to the time restrictions that have been imposed upon us, we will be unable to improve the bill. Given the desire to pass the bill at breakneck speed, we will have no choice but to subject public servants, public office holders, and others affected by the bill, to a flawed piece of legislation.

Thank you.

[The Chair, Conservative, David Tilson]

Thank you.

Mr. Martin.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Chair.

I'm interested, Dr. Shapiro, in one aspect. The government contemplates a new Conflict of Interest and Ethics Commissioner--a dual function. They've made the case that this new appointee must have a judicial background, or something to that effect. I don't fully understand what they're getting at or why. Do you see that this would be necessary, given what you know about the new...?

[Bernard Shapiro]

That is a difficult question for me to comment on, since in a sense it's a personal question. I find it very awkward to make any comment at all. I think in that sense it's unintended, but I think it's a little unfair. I'd rather make no comment, if that would satisfy you.

[Pat Martin, NDP, Winnipeg Centre, MB]

I'm sorry. That's fair enough. I understand. I'm trying to get my mind around what--

[Bernard Shapiro]

I understand. I get the point.