Information & Ethics Committee on March 23rd, 2011

[The Chair, Liberal, Shawn Murphy]

I will now call the meeting to order.

I want to welcome everyone here.

This meeting, colleagues, is really the start of our study into the Lobbying Act. The statutory review of the legislative provisions of the Lobbying Act has been referred to us.

We have a number of witnesses scheduled. The first witness we want to hear from is the commissioner herself, Karen Shepherd. She's with us today. She's accompanied by René Leblanc, the deputy commissioner. Mr. Bruce Bergen, senior counsel, is also here.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Chair, I have a notice of motion that I want to table.

We seem to be getting a lot of feedback; it seems to be echoing. Randy Hoback is from the Prince Albert area, and sometimes he and I row a little bit.

I hope this is not going on the record. I suppose it is.

When he talks, there's a big echo; when I talk there's a little one, Mr. Chair.

Mr. Chair, I want to table a notice of motion:

That the committee requests that the Prime Minister's Office, the Privy Council Office, Indian Affairs and Northern Development Canada, Natural Resources Canada, and Environment Canada, provide it with all correspondence, both electronic and written, from and to Bruce Carson from September 1, 2008, to March 18, 2011, and that this information be provided to the committee within three calendar days.

It's a notice of motion, Mr. Chair.

[The Chair, Liberal, Shawn Murphy]

Okay. Thank you very much, Mr. Easter.

That would require the 48-hour statutory period. It has been distributed. You would be entitled to move that motion anytime after Friday.

Having received that notice, I'm now going to go back to the orders of the day.

The first item is that we're going to hear from Ms. Shepherd concerning the issue of proposed legislative changes to our Lobbying Act. The chair has a few opening comments after Ms. Shepherd, and then we'll go to questions.

Ms. Shepherd.

[Karen Shepherd, Commissioner of Lobbying, Office of the Commissioner of Lobbying]

Good afternoon, Mr. Chair and members of the committee. I am pleased to be here today to discuss the legislative review of the Lobbying Act. I am accompanied by Mr. René Leblanc, deputy commissioner, and Mr. Bruce Bergen, senior counsel.

I am submitting to the committee my report on the experience of administering the act over the last five years. The report contains my recommendations for improving the Lobbying Act.

At my December 14^th appearance before this committee, I outlined a number of issues related to the review of the Lobbying Act. Today I would like to elaborate further.

Let me begin by saying that in my view several aspects of the Lobbying Act are working to increase transparency. More than 5,000 lobbyists are registered to lobby federal public office holders, and every month hundreds of communications with designated public office holders are disclosed by lobbyists. However, based on my experience, key amendments to the act would capture a greater share of lobbying activities and enable me to enforce it more decisively.

The registry of lobbyists provides a wealth of information on who is engaged in lobbying activities for payment, but does not capture the lobbying activities of organizations and corporations who do not meet the “significant part of duties” threshold. That threshold is difficult to calculate and even more difficult to enforce. That is why I am recommending that the “significant part of duties” provisions be removed from the act. In doing so, I would also recommend that Parliament give consideration as to who the legislation should capture and that a limited set of exemptions might be necessary. I would be pleased to explore this issue with Parliament during its deliberations.

The senior officer in a corporation or organization is currently responsible for reporting on its lobbying activities. I believe this accountability is important and should not be changed. That said, I believe it would be more transparent if the names of those engaging in lobbying activities with designated public office holders were also listed in the monthly communication report. Currently only the senior officers are listed, even though they might not have attended the meeting.

I also recommend that all oral communications, regardless of who initiated them and whether or not they were planned, should be reported. Currently only oral and arranged communications are recorded monthly. Deleting “and arranged” would increase transparency by disclosing any chance meetings or other communications between lobbyists and designated public office holders where registerable subjects are discussed.

The act provides me with a mandate to develop and implement educational programs to foster public awareness of the act. I believe that communicating the rationale and requirements of the act and the Lobbyists' Code of Conduct leads to greater compliance. It is for this reason that I recommend that this explicit mandate remain in the legislation.

In terms of my ability to enforce the Lobbying Act, the only measures available to me are referrals to the police for a breach of the act and reports to Parliament for a breach of the code. In December, I suggested that these enforcement measures may not be appropriate for the different levels of infractions I encounter.

When I refer a file to the RCMP, the act requires that I suspend looking into the matter pending the outcome of their investigation. Since July 2008, it has taken the RCMP on average eight months to review a file. In all cases, the RCMP decided not to proceed. As I can only continue with my own investigation once a decision has been taken by the RCMP, this affects my ability to render decisions and table reports to Parliament in a timely manner.

At my December appearance I indicated that lobbyists are voluntarily coming forward to disclose that they were late in registering or submitting monthly communication reports. I see this as an encouraging sign that many lobbyists want to comply with the act. I do not believe the public interest would be well served if I were to refer such files to the RCMP for criminal investigation. For these and other lesser transgressions, I have decided to educate and monitor these cases. I do not see this as letting them off the hook. Employing such alternative measures encourages others to come forward. In addition, as I indicated, individuals subject to education and/or correction continue to be monitored to ensure they remain in compliance.

For that reason, I am recommending that an administrative monetary penalty mechanism be adopted. This would provide a continuum between my current practice of relying on educational measures and the lengthier processes of referrals to a peace officer or reports to Parliament.

Despite the available penalties under the current act, no one has ever been charged, or convicted, of an offence under the Lobbying Act. I am of the view that, unless there are amendments to include a range of enforcement measures, probabilities of convictions for breaches of the act under this legislation are low.

As I have mentioned before, the Lobbying Act prescribes that investigations must be conducted in private. This should not be taken as an indication that I am not enforcing the act. In fact the opposite is true. I am enforcing the act to the full extent provided by the current provisions of the legislation. I have sent six files to the RCMP, I have tabled three reports in Parliament for breaches of the code, and three additional reports have been sent to individuals to provide them with an opportunity to present their views as required under the act.

I continue to believe that conducting investigations in private assures their integrity and protects the reputations of those who may have been wrongly accused. This is not insignificant. However, I have started confirming to parliamentary committees that certain administrative reviews and investigations have been open when the matter was clearly in the public domain. As a result, I think it is important that the act be amended to include provisions that would offer the commissioner or any person acting on my behalf some degree of immunity against criminal or civil proceedings, libel, or slander.

I would now like to take this opportunity to address some of the criticisms that you may have seen recently in the media. With respect to the application of rule 8, on improper influence, of the Lobbyists' Code of Conduct, both my guidance and my reports to Parliament clearly indicate that helping someone get elected is in his or her private interest and might put the lobbyist in breach of the code, depending on their lobbying activities.

My interpretation reflects the judgment of the Federal Court of Appeal, which was quite conclusive in overturning the old interpretation of rule 8 and in offering clear direction regarding how it should be interpreted. Contrary to what transpired in the media, my guidance does not prohibit lobbyists from engaging in political activities.

I believe that lobbyists are professional and that I have provided them with sufficient information to allow them to make decisions. This way, they can exercise caution when engaging in political activities, taking into account their lobbying ones. In fact, some lobbyists have indicated that the guidance and clarifications were sufficient and are arranging their affairs accordingly.

The issue of my decision not to provide advance rulings has also been raised in terms of which political activities they might perform without risk.

First, I would like to state that I do not regulate political activities.

Second, I am enforcing the act that Parliament enacted. Under the act my decisions are judicially reviewable. It is therefore imperative that all of my decisions be fair and be based on all relevant facts. I must be prudent in relation to advising lobbyists regarding potential situations based on information that could easily change after the advice has been given. It would put at risk not only a person to whom I would provide this ruling but also my ability to look into the matter in the future should there be allegations against this person. My neutrality and my ability to be fair would be compromised.

In conclusion, I want to assure members of the committee that I have been administering the Lobbying Act as Parliament has enacted it. As the administrator of the act, I look forward to working with the committee on the legislative review to find ways to further enhance transparency and better ensure compliance.

Mr. Chair, this concludes my remarks. I want to thank you for your attention and I will now be pleased to answer any questions the Committee members may have.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Ms. Shepherd.

As Ms. Shepherd has indicated in her remarks, there are a lot of issues swirling around out there about the present lobbying legislation. It's the chair's opinion, and it's the chair's opinion only, that the act does cry out for substantial revision or substantial amendments.

This committee, members of the committee, and members of the public have made many complaints and overtures or interventions over the last number of years on the Lobbying Act. Some of the provisions Ms. Shepherd has alluded to, but there are others that this committee is going to have to look at very carefully when we do the study. I'll just list some of them, and this is not extensive or exclusive.

What constitutes lobbying? Is our definition satisfactory?

Is the five-year ban on all public office holders, MPs, and others reasonable and justifiable in today's society?

There have been discussions in some fora that designated public officers proactively record and disclose their contracts with lobbyists. Is this good public policy?

Ms. Shepherd has alluded to the 20% rule, or the significant part of duties. We see people go into positions of government relations but who do not have to record as lobbyists because in their own opinion they are not spending more than 20% lobbying federal public office holders. Is this good public policy? Of course Ms. Shepherd is recommending a substantial change to that.

Should the lobbying commissioner proactively oversee the employment and other activities of former public office holders? The lobbying industry, again as Ms. Shepherd has pointed out, has expressed many concerns about code rule 8. What exactly can they do to assist political parties and candidates for political office? Ms. Shepherd of course has indicated that the present rule is clear, although many in the lobbying industry indicate that it is not clear.

The whole issue of transparency has to be talked about, because we have a situation where there have been complaints filed years ago, and we're just not exactly sure where they stand in the queue.

One of the biggest problems I see is a substantial lack of enforcement of the Lobbying Act. The fact that in the past 22 years no one has ever been charged speaks volumes. It's my view that the present legislation is compromised by imposing a duty upon our peace officers and public prosecutors to enforce what I consider to be an administrative function. Of course over the last 22 years the peace officer community has not shown any appetite to get involved in any prosecution under this particular act.

The fact that the commissioner has no powers other than to report the matter to the House, does not have power to suspend or anything else, I think is a serious matter. And then of course if it is reported to the House, as it was in a couple of incidents, about a month ago, what exactly should or would the House do in that situation?

These are just a couple of my own examples of some of the issues this committee is going to have to deliberate on very carefully. I think it's an important role we are embarking upon. And as I said, we have our first and perhaps one of our more important witnesses, the commissioner herself.

Having said that, we're going to go to round one.

Seven minutes, Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair, and also thank you for the overview. I think you touched on a lot of the issues the committee actually has to deal with.

First a question on an ongoing investigation before I get into the Lobbying Act itself. I think you publicly confirmed, Ms. Shepherd, on several occasions that you are investigating Rahim Jaffer and Patrick Glémaud about possible violations to the Lobbying Act. That has been almost a year since this issue arose. Do you know when you might be delivering a report? Or what can you tell us about that ongoing investigation?

[Karen Shepherd]

As I said to the committee in December, and I meant very much what I said, in terms of this, it is a priority for the office. When I was here in December as well I also described a process that my office goes through in terms of looking into a file from an administrative review into an investigation. And I also described that during that process, with the act as I have now, should I at any point in time have reasonable grounds to refer a matter to the RCMP, I must suspend looking into a matter. As I indicated in my five-year report, when any file is over with them I don't have control in terms of the timing things.

[Wayne Easter, Liberal, Malpeque, PE]

You mentioned in your remarks to us that's a problem, and it takes an average of eight months to review a file.

How many cases have you referred to the RCMP?

[Karen Shepherd]

I have personally referred six files to the RCMP.

[Wayne Easter, Liberal, Malpeque, PE]

Okay. You've outlined in your remarks that it's a problem. How do you see overcoming that problem with proposed changes in the act? Should you be allowed to continue to investigate? What process do you see for getting around the eight-month delay with the RCMP?

[Karen Shepherd]

It's one of the reasons I've suggested having the ability to have some kind of administrative monetary penalty mechanism. That would give me the ability--especially if there's a continuum--to go from my practice now of educating, to do referrals to the Royal Canadian Mounted Police.

In certain situations you can have a continuum that will allow for repeated offences and different levels of transgressions. I've seen that with some of my colleagues in the provinces, who have the ability to issue penalties. If I saw something, especially if I thought it was in the public interest and wanted to get something out, I could do a file, do an administrative penalty, and it would be within my control as to how fast I moved on a file. I wouldn't be dependent on another body to look at it.

[Wayne Easter, Liberal, Malpeque, PE]

As I think the chair mentioned in his remarks--and I think Mr. Murphy mentioned--the RCMP, police, or whatever are probably not going to make violations to the Lobbying Act a priority when they have robberies, thefts, you name it as other files on their agenda.

On the administrative monetary penalty that you outline in your paper, do you believe you would go that route rather than bringing in the RCMP or police for the criminal side of it?

[Karen Shepherd]

I definitely would like a continuum. I think that's one of the things with Parliament. Do we want to look at this as a criminal infraction? If it's a criminal infraction, it needs to go as high as the RCMP.

When I look at what powers the Alberta lobbyist registrar and commissioner have, they have two levels. For a level-one offence it's $25,000. Then they have what is almost a second tranche or second level up to $100,000.

If something were put in to give the commissioner the ability to issue monetary penalties as high as $100,000, that would probably be more than sufficient, in terms of not needing to send something to the Royal Canadian Mounted Police.

[Wayne Easter, Liberal, Malpeque, PE]

On loopholes in the Lobbying Act itself--this is really for clarification--is it true that no one has to be registered as a lobbyist if they are not paid for their lobbying, and if they are lobbying about the enforcement interpretation or application of any act of Parliament or regulation?

[Karen Shepherd]

In the first question, the Lobbying Act does refer that an individual must be paid for and communicating on a registerable activity, which is to amend or change a policy, program, bill, or regulation to obtain a financial benefit. I've also looked at it as they may have the payment in hand, but if there's an expectation of payment as well, that's how I've determined there is payment.

I think you had a second question.

[Wayne Easter, Liberal, Malpeque, PE]

It was if they were not paid for their lobbying.

[Karen Shepherd]

If there's an expectation of payment, that to me would be payment.

If you are communicating about an existing law to acquire a better understanding or to be in conformity, that wouldn't be considered lobbying. If you are communicating, even if you were paid to be in conformity or to get clarification on a particular law or regulation.... It's when you are communicating to change that particular law or regulation that the issue of that becomes a registerable activity.

[Wayne Easter, Liberal, Malpeque, PE]

For clarification, when people come to the government under the employee exchange program, are they exempt from the five-year ban on lobbying when they return to their corporation after working with the government? That interchange happens a lot.

[Karen Shepherd]

Yes, they are exempt from the five-year prohibition. There's an explicit exemption.

[Wayne Easter, Liberal, Malpeque, PE]

Is it also true that the Lobbyists' Code of Conduct does not apply to anyone who is not registered or required to register under the Lobbying Act?

[Karen Shepherd]

That's not correct. If they should be registered under the legislation, then the Lobbyists' Code of Conduct would apply. It's like the case I filed on Mr. Bruce Rawson. He was not registered at the time.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Easter.

Madame Freeman.

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

Good afternoon, Mrs. Shepherd, Mr. Leblanc and Mr. Bergen. Thank you for being here. Thank you for your presentation.

On July 22, 2010, Mary Dawson, the federal conflict of interest and ethics commissioner, called for greater freedom to discuss her investigations. You raised this earlier when you said that just because people don't hear about investigations doesn't mean that you aren't doing anything about them or that no work is being done.

So, Ms. Dawson called for greater freedom to discuss the investigations she is conducting. Do you feel this same need to be able to freely disclose to the general public the cases you are working on? I know that you have to report to Parliament, based on what I had been told by the law clerk and parliamentary counsel of the House. You are authorized to disclose this information to Parliament. Don't you think, as Ms. Dawson does, that you should be freer to discuss these investigations?

[Karen Shepherd]

Well, to be frank, as I said in December, when a case is really in the public domain, I have no problem stating that I am in the process of looking into the situation.

In some other cases, there is a risk that this will harm the investigation that is under way. As I said in my five-year review of the act, it is important that I continue to conduct my investigations in private to ensure the integrity of those investigations. This protects the capacity to obtain testimonies and documentation. It also allows me to make a fair and unbiased decision.

The difference for me is that it allows me to study the situation. If I disclosed to the public that I was conducting an investigation, there would be a risk that it would end up in the media, which may harm the integrity of my investigation, which I want to protect.

So I fully agree with talking about cases to the public and saying that I am indeed reviewing these cases, but I can't discuss the details of them.