Information & Ethics Committee on Oct. 26th, 2010

[The Chair, Liberal, Shawn Murphy]

I call the meeting to order and extend to everyone here a very warm welcome. This meeting, colleagues, of the Standing Committee on Access to Information, Privacy and Ethics has been called pursuant to the Standing Orders. We're very pleased to have with us today Ms. Mary Dawson from the Office of the Conflict of Interest and Ethics Commissioner. She of course is the commissioner.

She is accompanied by Lyne Robinson-Dalpé, the assistant commissioner, and Nancy Bélanger, general counsel. On behalf of all members of the committee, I want to welcome all three of you.

I propose that this part of the meeting go until 5:15, and then we'll spend the last 15 minutes dealing with the minutes of the steering committee, which have been circulated.

I'm going to start with you, Ms. Dawson. I understand you have some opening comments, so I will turn the floor over to you.

[Mary Dawson, Conflict of Interest and Ethics Commissioner, Office of the Conflict of Interest and Ethics Commissioner]

Mr. Chair, I would like to begin by thanking the committee for inviting me to appear before you to talk about my 2009-2010 annual report under the Conflict of Interest Act.

I am accompanied by Lyne Robinson-Dalpé and Nancy Bélanger.

I am pleased to welcome your new members and look forward to working with all of you. I also appreciate the productive relationship that I have enjoyed with the committee during the past three years, as I have settled into my mandate.

In my remarks today, I will highlight some of the activities covered in my annual report. They touch mainly on the areas of outreach and communications, investigations and some of the challenges I identified in the report. I will also identify some areas where my office has encountered challenges in applying the act.

By way of background, the Conflict of Interest Act applies to the approximately 2,800 full- and part-time appointees of the Government of Canada. All are considered public office holders under the act, and they are subject to its general rules on avoiding conflict of interest.

Full-time employees, numbering about 1,100, are also subject to the act's requirements relating to the disclosure and divestment of controlled assets. These reporting public office holders include ministers, parliamentary secretaries, ministerial staff, and senior government appointees.

All reporting public office holders are required to make a full confidential disclosure of their assets within 60 days after taking office and to update it every year. Within 120 days after their appointment, reporting public office holders are required to sell any controlled assets they hold or put them into a blind trust. They must also make public declarations of certain other assets and any directorships or positions of office with outside organizations that are permitted under the act.

In some cases public declarations are also made to reflect special compliance measures, such as conflict of interest screens--I will say a little bit more about these later. As well, there are ongoing disclosure requirements, within relatively short delays, relating to material changes, gifts and other advantages, the receipt and acceptance of firm offers of outside employment, and recusals.

The act allows me to impose administrative monetary penalties of up to $500 for failure to comply with the reporting deadlines. In the last fiscal year, I imposed penalties in five cases. However, I noted in my annual report that the act does not provide for penalties for contraventions of substantive provisions of the act.

Outreach and communications are important tools to assist us in helping public office holders to comply with the Conflict of Interest Act. In the past year we have continued to meet regularly with individual public office holders to explain their obligations under the act and address their questions and concerns.

We have improved our compliance processes, resulting in significantly fewer missed deadlines. We have upgraded our electronic case management system to assist our advisers in giving public office holders more timely advice and guidance.

There was an increase in the number of gift disclosures made by reporting public office holders in the past year, probably because of more proactive communications by my office. We explained their obligations to them relating to gifts, and we introduced new forms and administrative procedures to help those who regularly receive gifts. Other outreach activities included presentations to groups of reporting public office holders.

As I noted in my annual report, my office has historically had little contact with non-reporting public office holders, most of whom are part-time members of federal boards, commissions, and tribunals, and some of whom are part-time ministerial staff. This is because they are not subject to the act’s reporting requirements, its divestiture requirements, or its prohibition against engaging in outside activities. As well, while they are subject to the gift rules, they do not have to disclose them.

In the past, our practice has been to simply advise these mostly part-time public office holders of their obligations under the act when they assume their duties and at the end of their term of office, but not to initiate any other communication with them during their term. I undertook in my annual report to change this situation. As an initial step, I am in the process of sending the first in a series of annual letters to all non-reporting public office holders reminding them of their obligations under the act and inviting them to contact my office with any special concerns.

The last year has been particularly busy on the investigations front. I reported on four examinations under the Conflict of Interest Act. Three of these had parallel inquiries under the Conflict of Interest Code for Members of the House of Commons.

I also discontinued an examination of allegations of partisan advertising of government initiatives by the Prime Minister, certain ministers, and their parliamentary secretaries.

In June of 2009, I reported on my examination in relation to allegations that Mr. Colin Watson, a member of the Toronto Port Authority board of directors, had furthered the private interests of a friend by participating in certain board decisions. I found that Mr. Watson was not a friend of the individual in question within the meaning of the act and concluded that he was not in a conflict of interest and did not contravene the act.

In my three most recent examination reports, I commented on issues reflecting ethical considerations that were not addressed by the act.

In April 2010 I reported on my examination of complaints that 25 ministers and parliamentary secretaries had used partisan or personal identifiers on ceremonial cheques or other props in connection with federal funding announcements. I found that enhancing political profiles is a partisan political interest and not a private interest within the meaning of the act. I concluded, however, that using partisan or personal identifiers in announcing government initiatives was inappropriate and that steps should be taken to address this practice.

The focus of my other two examination reports related to fundraising and lobbying. In May 2010 I reported on my examination of the activities of the Honourable Lisa Raitt, when she was Minister of Natural Resources, in connection with a political fundraising event organized by her riding association. In September 2010 I issued a report on my examination of the involvement of Mr. Rick Dykstra, Parliamentary Secretary to the Minister of Citizenship and Immigration, in a political fundraising event organized for the benefit of his riding association.

In both reports I noted that more stringent provisions relating to fundraising should be considered for ministers and parliamentary secretaries. In this connection, I noted that the act's predecessor, the Conflict of Interest and Post-Employment Code for Public Office Holders, prohibited ministers, parliamentary secretaries, and other full-time public office holders from personally soliciting funds, regardless of whether or not doing so would place them in a conflict of interest.

I also made reference to the Prime Minister's guidance document setting out best practices to be followed by ministers and parliamentary secretaries in respect of fundraising activities. I understand from a recent media report that the document will soon be made public.

I will conclude by drawing to your attention several areas where my office has encountered challenges in applying the act that were discussed in my annual report. One area involves the notion of material change. Reporting public office holders are required to inform my office of a material change to any of the information disclosed in their confidential report. They're supposed to do so within 30 days of a change occurring, but often we do not learn about them until the next annual review. A material change could affect an individual's obligations under the act, which is why it's important that these changes be reported without delay. As I've already mentioned, a failure to meet the reporting deadlines could result in an administrative monetary penalty.

Material change is not defined in the act. In an effort to improve the reporting rate, I recently updated our website to add an information notice under the act describing my interpretation of what constitutes a material change.

Under the act, public office holders must recuse themselves from discussion, decision, debate or voting on a matter where they would be in a conflict of interest. Recusals take place in relation to specific conflict situations that usually come up at relatively short notice.

It makes sense to identify situations where recusals may become necessary as soon as a public office holder takes office and at that time set up a process to prevent conflict of interest situations from occurring. The act gives me the discretion to determine appropriate compliance measures, and under this authority I have followed the practice of setting up conflict of interest screens that anticipate possible conflicts, thereby avoiding the need for recusals in most cases. Conflict of interest screens are often referred to colloquially as “Chinese walls” and are a common practice in legal and business environments.

Once a conflict of interest screen is in place, related matters such as the handling of files, meetings, and phone calls are redirected by the screen administrator, and these matters do not come to the attention of the public office holder.

The act requires that all recusals by reporting public office holders be made public, but there's no similar requirement for conflict of interest screens.

I do, however, have the authority to make any other documents public when I consider it appropriate to do so. For reasons of transparency, since late last year I have been making these conflict of interest screens public as a matter of course.

I note that our public registry has contained no recusal declarations since the act came into force. This is primarily because we've been using the conflict of interest screens effectively. There may have been other recusals, but only one has been reported, and that one could not be made public because it contained a confidence of the Queen's Privy Council for Canada.

The final area I want to mention involves the confidentiality of examinations. When I receive a request for an examination that's been made public but that does not meet the basic requirements for acceptance, I'm not permitted to give any public explanation of the reasons for not investigating. This leaves me open to accusations that I do not take the request for examination seriously or that I'm favouring an individual or party--allegations that could unjustly damage the reputation and hence the effectiveness of my office. The allegations can also unfairly damage the reputations of those complained against.

Mr. Chair, this concludes my opening statement. I am grateful to the committee for taking the time to review my 2009-2010 Annual Report in respect of the Conflict of Interest Act and to examine the issues that I raised in it.

I am happy to answer any questions you may have.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Ms. Dawson.

We're now going to proceed with the first round, which is for seven minutes.

Mr. Easter, you have seven minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Welcome, Ms. Dawson and colleagues.

I might say as well, as a member of Parliament, that we've sent a number of materials over to your office and we've always had pretty good cooperation.

I guess one of the key current issues--and you're no doubt aware of the discussion that's been happening at this committee and others--is the appointment of the Prime Minister's new chief of staff, Nigel Wright. We and others have certainly expressed some concerns about the temporary leave of absence and the number of departments that he might have to recuse himself from.

It's my understanding that you have given your approval regarding the arrangements that have been made with Mr. Wright, but I'm not sure if that's true for both sides of the equation. One side of the equation is the fact that Mr. Wright is on a temporary leave of absence from Onex and is therefore going to be here for just a little while. His obligations, clearly, over the long haul, are going to be to Onex. Were you aware of that arrangement he has with the Prime Minister? Do you have any comments to raise on that side of the coin?

[Mary Dawson]

Yes, I'm aware, but I must say that we are still in the process of finalizing any arrangements with him. They have not been finalized.

[Wayne Easter, Liberal, Malpeque, PE]

When do you expect them to be finalized? Do you have any timeframe? The government is pushing us, if we want to talk to Mr. Wright, to do so before November 8. We disagree with that, of course, because it's Parliament's right to call whoever it desires, with the exception of a few, whether they're exempt staff or not.

In any event, do you have a timeframe for when you will have that completed?

[Mary Dawson]

It's impossible to set an absolute deadline. I remind you that in fact he's not even in office yet. When somebody takes office, they have 60 days in which to give us information, and then there are another 60 days after that for the arrangements to be finalized. That's not to say we're not going to finalize the arrangements more quickly than that in this case. We've made a lot of progress. We've had lots of discussions, and we're doing well with our discussions. I could probably go on to say that we're probably not too far away, but until everything is dotted and crossed, we don't have the arrangements finalized.

[Wayne Easter, Liberal, Malpeque, PE]

That, too, is one of our problems with the government's intransigence in not allowing exempt staff to come forward, because some of these things do not happen until after....

But on the other side of the issue, as I outlined to committee the other day, there are nine or ten departments from which we believe Mr. Wright might have to recuse himself. Have you discussed at length how the chief of staff to the Prime Minister, the second most powerful position in the land, can do his job if he has to recuse himself from...? It's actually ten departments. You mentioned in your opening remarks Chinese walls. Is that the way you see this? I mean, will Chinese walls prevent conflict of interest? I understand the defence contract for aircraft hasn't even been signed yet. This man has connections throughout the defence industry. In fact, he is or was a director of one of the companies that is indirectly involved.

[Mary Dawson]

I can't comment on individual cases, as you undoubtedly understand, but I can say, as I have, that we've had extensive conversations. We're well advanced in developing the screens, and once those screens are in place it's going to be up to the incumbent to ensure that he complies with them and that there are no conflicts.

The screens are meant to assist the public office holder to avoid a conflict of interest, so we work with them to make those screens as complete as we can. Should there be something that falls through the cracks, then the person should resort to a recusal. But certainly we've done a lot of work on the matter and we're well advanced.

[Wayne Easter, Liberal, Malpeque, PE]

You're obviously operating under the assumption that these screens will prevent the perception of conflict. We are dealing with 10 departments here. Maybe you'd better explain to me a little further how these so-called screens can prevent that.

The other fact is that many public office holders, under the rules now, are not allowed to get into lobbying government in any substantive way for five years. This individual will only be here for 18 to 24 months. He's on a temporary leave of absence. No one can tell me that this man's obligation in the future is not to Onex. How do you get around that? How can the public actually believe there is not going to be a substantive conflict here?

[Mary Dawson]

My obligation is to ensure that the requirements of the act are met. I believe we are meeting the obligations of the act by establishing these screens, or we're assisting the public office holder, Mr. Wright, to ensure that he does meet the obligations of the act. The other thing about those screens is that they will be made public when they're finalized.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Easter.

Ms. Freeman, you have seven minutes.

[Carole Freeman, Bloc, Châteauguay—Saint-Constant, QC]

Thank you for being here, Ms. Dawson, Ms. Bélanger and Ms. Robinson-Dalpé.

I wanted to ask you about the fact that you have the title of ethics commissioner, and yet the term “ethics” does not appear anywhere in the current act. You seem to be uncomfortable with that. Your help is frequently sought in a variety of situations, but your focus under the Conflict of Interest Act is more on matters of personal interest.

The act is scheduled for review in July 2012, so what amendments should be made to strengthen the ethics component? Basically, you have a title, but nothing in the act deals with that part of your mandate. What amendments would you propose?

[Mary Dawson]

It is an interesting question. If you'll pardon me, I'll respond in English.

I've struggled with the fact that my title says “Conflict of Interest and Ethics” since I came into the job. I think I'm gradually getting used to the issue, and I'm dealing with it in the way that I think is appropriate.

I talk about the fact that I'm primarily dealing with conflict of interest and that ethics is in my title but doesn't occur in the act. The reason why I refer to that from time to time is to try to make people understand what my true responsibility is under that act. But I've concluded that since ethics is sitting there in the title, why not make some observations when I feel like it.

Basically, in my last few investigation reports, you will see that I find whether there's a contravention and then when appropriate I go on to make observations about whether I think some of the activities were appropriate or whether there are some additional changes that could be made, either through informal rules or changes to the act. That's the way I'm now coping with this term “ethics” in the title of my job.

The other observation is that I don't think you can define ethics. An ethical scheme for one person is not the same as one for another person. It's a very loose concept, and I'm not sure that broad ethical considerations ought to be legislated.

I hope that goes some way to answer your question.

[Carole Freeman, Bloc, Châteauguay—Saint-Constant, QC]

That partially answers my question.

In the past year, people have brought various examples to our attention. When it came to fundraising, there were no grounds to file a complaint. But the more these situations arise, by not tightening things up, the message we are sending and the message that the commissioner's office is sending is that there are no restrictions whatsoever, because you are limited by the mandate set out in the act.

What can we do to make the situation better? We cannot spell out every single ethics-related thing, but we should be able to impose much clearer parameters. Things are obscure the way they are now. You can make recommendations, but your mandate is very limited.

[Mary Dawson]

With respect to fundraising, it's covered under the act but not under the code. There are prohibitions against fundraising, and it's very artificial to try to figure out whether somebody is fundraising as a minister, as a parliamentary secretary, or as a member of Parliament. One suggestion I made was that perhaps the rule should be extended to cover ministers, whether they're acting as a minister or a member of Parliament. That would be one approach.

There are many ideas that one could put on the table as to just where one wants to go with the fundraising issue, but generally, these things come up as you notice them. As issues come before you, you then see where maybe some improvements could be made, and that's where I'm trying to make my small contribution when I see something that maybe could be improved.

The other observation, though, is that one must be careful not to create too long a list of rules, so you kind of forget why you're doing it. There's a place for principles as well. So there's a balance there as to how detailed you get with these rules. The most important thing is to make people want to maintain the integrity and the reputation of parliamentarians or public office holders. The answer is not entirely in making stronger and stronger rules.

[Carole Freeman, Bloc, Châteauguay—Saint-Constant, QC]

You do not think stronger rules are necessary. You said you have to be very discreet in terms of the files you work on. The act prevents you from disclosing complaints. Could you elaborate a bit more on what that means with respect to restrictions?

[Mary Dawson]

Yes. I'm a great fan of transparency, and whenever I can make things transparent, I will. I really take a lot of pains in trying to tell in my annual reports what I've been doing. Having said that, these are people's reputations that we're dealing with very often when there are complaints made about somebody. I think one has to balance privacy considerations against the need for transparency.

The act and the code are somewhat different in the rules they have about the extent to which things are confidential. It's a little bit complicated to get into, but I can as necessary. Basically the rules are more stringent, for example, with respect to investigations under the code than they are under the act.

I always keep in the back of my mind the need for respect of personal privacy when I'm making statements about what's going on. So there's a balance. It's not an easy balance, but both of them are very important.

[The Chair, Liberal, Shawn Murphy]

Thank you, Ms. Freeman.

We're now going to move on to Mr. Siksay.

Mr. Siksay, seven minutes.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Thank you, Chair.

Thank you for being here again, Commissioner Dawson, with your colleagues.

Commissioner, I have just one story of the day that I want to make sure isn't really in your area of jurisdiction. I don't think it is, but I just want to confirm that. The Auditor General today reported on conflict of interest guidelines for public servants, for bureaucrats. Is there anything in that area that falls on your plate?

[Mary Dawson]

Actually, I didn't see it before she made it public. I glanced at a half-page list of what was in it and it sure looked like it was all about the public service, but that's as much as I know.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

It's interesting that we're waiting on Treasury Board guidelines and still functioning with public service guidelines on conflict of interest from 2003 from the previous government.

I wanted to ask you about the fundraising guidelines that you are waiting to read from the Prime Minister, because that's been part of a number of your investigations this year.

You mention that you understand from recent media reports that the document will soon be made public. I know that's what you reported to the House procedures committee a couple of weeks ago. Have we seen that document yet or do we know anything more about when it might finally be made public?

[Mary Dawson]

I haven't. Basically that document came into my possession and I just observed that in support of transparency principles, why not make it public? That was my comment. But no, I know no more than you do.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Has there been a commitment from the Prime Minister's office to make it public at some point?

[Mary Dawson]

I believe there was at some point, some time ago now.