Information & Ethics Committee on Jan. 31st, 2012

[The Chair, NDP, Jean Crowder]

I call the meeting to order.

Good morning, everybody, and happy new year. Welcome back to the committee. I want to thank our witness for accommodating the unexpected delay in our schedule. We will go ahead and conduct an hour's meeting; with whatever time we have left, we will conduct the committee business that was originally scheduled for the meeting.

Mr. Jordan, I understand that your presentation will be less than ten minutes, so I'm just going to turn the floor over to you. As usual, we'll then go to committee members for questions and answers.

Mr. Jordan, the floor is yours.

[Joseph Jordan, Senior Consultant, The Capital Hill Group]

Thank you, Madam Chair.

I want to thank the committee for the invitation to participate as a witness in your five-year statutory review of the Lobbying Act, as is mandated by section 14.1 of the legislation.

By way of introduction, I am a former member of Parliament. I served as parliamentary secretary to the Prime Minister. I served as parliamentary secretary to the President of the Treasury Board. I was the director of parliamentary affairs in a minister's office. I am currently a member of the Queen's Privy Council and am currently a senior consultant with The Capital Hill Group, a government relations firm here in Ottawa. I also teach government relations in the MBA program at the Rotman School of Management, University of Toronto. In other words, to use the vernacular of the bill, in recent history I have been a designated public office holder and I am now a registered lobbyist. Apart from the fact that I apparently have trouble holding down steady employment, I hope I can draw on some of my experiences while we discuss this legislation.

At the outset, I want to put on the record that I did appear before the Senate committee when Bill C-2 went through the legislative process. At the time I expressed some concerns about the bureaucracy's ability to enforce this bill logistically, because what it involved was a shift from a system that was essentially lobby registration to lobby regulation, and I had in my mind all the complexities that would involve. I must say that I think they have performed admirably. On a logistical side, the office is functioning at a very high level. Any contact I've had with it has been extremely positive; I think the registration system itself, the computer system, is working well, so I have to eat a bit of crow, because I predicted doom on that front and it certainly hasn't materialized.

On a personal note, I also want to state very clearly that I fully support the objectives of this bill. Anything that we can do or anything that you can do as parliamentarians and legislators to increase transparency on the political decision-making will help reduce some of the cynicism that I think is driving down voter participation rates and infecting people's views of government and government's role in their lives.

To that end, I'd like to review a couple of areas of the legislation that I think the committee should consider examining during your review.

The first item is essentially structural. The application of the regulatory framework in this act, which is extensive and far-reaching, is entirely based on a person realizing that they are engaged in activities that require a registration. Although subsections 5(1) and 7(1) list a number of activities that would be considered registerable activities, I think it may make sense to actually put a definition of lobbying into section 2 of the legislation. For a suggestion, I think a solid definition would be "communication with decision-makers to affect outcomes". I think that a clear and concise definition of the activity that is being regulated provides a stronger foundation to then define the related activities.

The committee testimony to date has reflected a concern about individuals who are "flying under the radar", as I think was the term used, meaning people who are engaged in lobbying activities but who, for one reason or another, are not registering and reporting those actions. Setting aside people who are knowingly and deliberately choosing to ignore the law, I think there are a couple of factors that contribute to this situation. The inclusion of an arbitrary time trigger, the so-called “20% rule”, involves an individual or organization performing some calculation of aggregate resources expended in lobbying activities. At best, it's confusing; I think that at worst, it's unconstitutional.

I'll give you an example. The August 11, 2009, interpretation bulletin on how to calculate the 20% rule states:

One way is to estimate the time spent preparing for communicating (researching, drafting, planning, compiling, travelling, etc.) and actually communicating with public office holders. For instance, a one-hour meeting may require seven hours of preparation and two hours of travel time. In this case, the time related to lobbying with a public office holder would be a total of 10 hours.

That would be the time used to calculate whether you trigger the 20%.

Therefore, what you have is a case in which identical organizations engaged in identical activities could have separate reporting requirements if one is based in Ottawa and one is based in Vancouver. I'm not a lawyer, and that's not an apology, but I'd take this one to the Supreme Court. I don't think we can have legislation that is going to discriminate against Canadians based on where they live. Quite clearly, in my reading this interpretation bulletin does exactly that.

I think that may be one thing you want to look at and, at the very least, take travel out of the calculation, because I think there's an inherent bias in that to people who live closer to Ottawa. Again, that's something we are probably trying to have less of in our legislation.

It might also be useful to revisit the original rationale for the 20% rule. It was not the intention of legislation—this is what the rationale was at the time—to catch individuals or organizations that are engaged in occasional lobbying. I think you need to take a look at that and reconcile it with the objectives of the legislation.

It might be simply that you are catching people who are bad at lobbying, because the good lobbyists can get it done under 20%. This isn't necessarily a criticism aimed at any person, but as this bill evolves, as it reacts to situations, both policy and political, and as its reach is extended, I think you have to make sure that at the end of the day when you put the pieces back together, Humpty Dumpty makes an egg. I think in some cases we have gone a little sideways on what we're trying to do.

The second element is the requirement that a lobbyist be paid in order to be covered by these regulations. The Americans have a regime of lobby regulation and don't make that distinction.

In looking at the participating sectors of the argument industry, at the inputs that go into public policy making and the public policy making algorithm, I think the goal should be the highest level of transparency possible. So certainly the actions of paid consultant lobbyists should be transparent, but so should the actions of non-governmental organizations, think tanks, religious advocacy groups, professional organizations, and even academics.

The notion that only those who are directly paid to lobby have questionable motives and all the other participants in the debate are pursuing the public interest in its purest form strikes me as a little naive. I think that either eliminating the word “paid” or at least expanding the definition to include “indirect benefit” might be worth considering.

Again, to give you an example, I teach at the University of Toronto. The fact that I'm appearing before you here today is something that I will bring up the next time my salary is negotiated, so to somehow suggest that this particular undertaking may not have indirect benefit to me is again I think not realistic.

I think the legislation is also coming into conflict with legitimate objectives of certain organizations. In terms of governance in organizations, we live in a post-Sarbanes-Oxley world, and organizational and corporate boards are struggling with these new realities.

For example, if an association is trying to attract top talent for its board of directors and decides to compensate them any amount over expenses, they are then considered paid, and the 20% rule doesn't apply, triggering the potential requirement for the entire board to individually register as consultant lobbyists if they have contact with public office holders. If you check the registry, I think you'll see that the Canadian Medical Association is one organization that has had each of its board members register as consultant lobbyists.

I think we should be supporting these groups in their goal of better governance. I'm not sure that this additional hurdle is helpful in their recruiting.

Another element of the legislation that was predicted as problematic was the inclusion of designated public office holders identified as “senior”. Therefore, any registerable communication that was oral and pre-arranged with these individuals required separate filing of a monthly communication report. That was then posted to the public registry and available online. There was a hue and cry--all kinds of it--about how this was going to provide sensitive information to competitors. I don't think that has materialized, but there are some issues around it.

The original proposal in Bill C-2 before it was amended called for a higher level of detail regarding the actual communication information, and a dual filing process, whereby both sides at the meeting, the designated public office holder and the registered lobbyist, both reported their meetings individually and separately, and the lobbying registry office simply reconciled. If there was one half of a meeting reported, that was something they could then investigate. The problem we have now is that the lobbying commissioner's office has to respond to anonymous tips or whatever to figure out where to look for problems because they aren't going to surface naturally on their own.

We ended up with a system in which the responsibility rests solely with the lobbyist and the meeting details simply need to reflect the identified subject matter listed in the original registration. Again, the committee may want to examine the impact this element has had over the last five years and see if it's getting us where we want to be.

In addition, I think, on the inclusion of DPOH status, you could put this on the government electronic registry. One of the challenges we face is who is designated and who is not. It's a moving target in terms of the designations not being consistent across ministries as people move in and out of positions and are temporarily acting and these sorts of things.

The government has a very good electronic directory of employees. There may be some way of identifying on that directory if the person is or is not in fact a designated public office holder. I think it might simplify the process and reduce the number of false filings, wherein people file and don't need to because the person isn't designated, or where they don't file because they don't think the person is and that then triggers a separate course of action.

Staying with the DPOH theme, the original legislation gave the government the Governor in Council authorities to designate any class of DPOH, and they exercised this authority to extend designation to members of Parliament. I realize the political risks of anybody saying they want to do anything that would be seen to be reducing transparency and accountability, but I think designating individual MPs who aren't parliamentary secretaries or ministers as DPOHs is a bit of a knee-jerk reaction. It could have profound long-term effects on the rights and privileges of MPs and, in a sense, the relationship between the executive and legislative branch.

I'm not Chicken Little and I'm not saying the sky is falling, but I think we should all be concerned if as an MP there are certain regulations and restrictions around who you see and then actions you take subsequent to those meetings. Your responsibilities as to providing oversight as members of Parliament may take precedence over whatever objectives might be met under that exercise, although I do say again that it would be very difficult for somebody to walk outside this room and scrum on that issue, because it certainly would look like you're trying to make the system less transparent. I can say it; maybe you can't.

[The Chair, NDP, Jean Crowder]

Mr. Jordan, perhaps we could move to your recommendations.

[Joseph Jordan]

Sure.

[The Chair, NDP, Jean Crowder]

That would be great. Thank you.

[Joseph Jordan]

There are two final points I'll make. There has been a lot of talk about what's called “Rule 8”: registered lobbyists' participation in elections and the electoral process. Good luck with that. It's a bit of a tricky one. What you are trying to do there is balance my rights as an individual, my constitutional rights to participate in the democratic process, with trying to prevent me from creating obligations that I would exploit further down the line.

I will say this. Whatever decision you come up with, I think the industry would welcome very, very clear rules for what can and cannot be done, as opposed to the interpretation bulletins that essentially say, “Well, do whatever you think is right, and if you do something that is wrong, we'll come a-knockin'”. We're talking about a Criminal Code underpinning here and I think we need a little more clarity around that issue.

I'll leave you with this thought, then, and I'll welcome any discussion or questions you have. The relationship between business and government is one of the principal determining factors in the performance of our economy and the quality of our society. I think politicians, bureaucrats, entrepreneurs, and citizens have a vested interest in this relationship functioning at as high a level as possible.

It's important to ensure that the transparency objectives of this legislation are realistic, attainable, and effective and that the compliance burden does not contribute to the insularization--I think I made that word up--of the public decision-making process. In other words, anything that causes government to retrench from consultation, to make decisions in a vacuum because of the burden of complying with this legislation, I think is taking us backwards.

Again, I think the committee has quite a challenge ahead of it. I look forward to discussing any or all of those points or any points that you want to bring up based on my experiences.

I'm at your disposal. Thank you, Madam Chair.

[The Chair, NDP, Jean Crowder]

Thank you, Mr. Jordan.

We will begin with Mr. Angus for seven minutes. That of course includes the member's questions and the witness's responses.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, Mr. Jordan. It has been a very interesting discussion so far.

I'm interested in your recommendation about the question of lobbyists being paid and your interpretation of it, because one of the elements that has come up is that someone might not be specifically paid, but there might be a financial interest down the road, or it could be favours. But in that you would include think tanks, academics, and NGOs, and I'm wondering how we would do that in making it not only transparent but realizable. Many people come to our offices to meet with us on all manner of things, and if the onus is upon them to be registered as a lobbyist, I think a lot of well-meaning groups are going to get themselves into trouble. How would you actually make that work? And what would be the distinctions that are needed?

[Joseph Jordan]

Thanks for the question.

I think the point I was making is that if you can agree on what the objective of the legislation is, then work backwards: who is caught or where does the Canadian society benefit from transparency? Again, I think the point I was trying to make is that for anybody who is, in any kind of organized way--apart from the citizen-MP relationship--participating in a public policy debate, I think you can make the assumption that they're doing it in their self-interest. To simply use “paid” as the bar...you are having a lot of people who are influencing a considerable amount of pressure on that process and who are completely outside this regime.

So by putting the definition as “communication with decision-makers to affect outcomes”, everybody understands what we're talking about now. If you take out “paid”, then it's just the case that everybody who's going to play in that sandbox has to register and has to follow the same rules.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Yes. I'm still trying to get my head around that. One of the recommendations of the lobbying commissioner is that we remove this “significant part of duties”, this 20% rule, partly because there are people who have enormous influence if they make a phone call. That might be 5% of their duties, but they could have enormous influence because it's about who you know, and that's what makes their phone calls effective.

So we're worried about them falling under the radar, but I guess if an academic were coming to meet with you because of concern about prison policy, copyright policy, or health care policy, they would have to be signed up the same as you in the Capital Hill Group would be. Is that what you're suggesting?

[Joseph Jordan]

I'm not suggesting the solution; I'm just pointing it out. But I would say, what would be the harm...? If the idea is that Canadians need to know who is trying to move the balance point in a policy--for whatever reason--why is the public good served by them knowing only what Joe Jordan is doing, but not knowing what person X, Y, or Z is doing, a person who is out there and having considerable influence?

I'm not saying it's easy, Mr. Angus. I'm just saying that if the goal is to throw light on everybody who's trying to get the government to do something, I think we're getting less than we could get by not including those other participants.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Well, I guess the question...and you've sort of raised this from another angle. As a designated public office holder, as an MP, if I'm being told that I have to register every single person who comes to and meets in my office, in some ways I don't have a problem with that, but in other areas I do. There are people who come to me because they have to give me information, because they're concerned about what's happening. There's secrecy...not secrecy, but privacy rights. So it seems to me that the little Joe and Jenny community group that wants to meet with me because they're concerned about policy gets treated the same as the Capital Hill Group if they don't register as lobbyists.

However, if I were an MP and had a list of all the groups I met with in a given day, I don't have a problem with that, because, jeez, people would think I actually worked hard for a living when they see all the people we do meet. But there are problems with that. So putting the onus on the group who's coming in, it seems to me, is letting you guys off the hook, because we're going to get swamped with all kinds of little community groups that aren't going to be meeting the Lobbying Act, and then we're going to be going after all these people for failing to register as lobbyists but missing the people who, with that little phone call, may have enormous influence.

[Joseph Jordan]

Well, I think that's why if you move MPs out of the DPOH category, you solve that problem, because people who go and see the MP then aren't subjected to the communication filings at all.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Yes, but it is the obligation of a registered lobbyist to talk about who they meet with.

[Joseph Jordan]

Oh, I have to, absolutely--

[Charlie Angus, NDP, Timmins—James Bay, ON]

Yes.

[Joseph Jordan]

Absolutely, but if I'm seeing a public office holder--not a designated--as long as I'm duly registered, that communication I have is not part of the communication filing every month.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Right.

Now, the second recommendation of the lobbying commissioner was that the act “should be amended to require that every in-house lobbyist who actually participated in the communication be listed” in the report “in addition to the name of the most senior officer”. So if a group of four comes, we know who those four are, as opposed to just the person who set up the meeting. Do you think that's a reasonable transparency goal?

[Joseph Jordan]

I certainly agree with the principle. I just don't know...and you've touched on it too: I mean, what can you reasonably expect to accomplish through a regulatory framework?

Part of the problem with in-house lobbying is that a large company will have different people on different files. They may have people from different countries on different files. So it would be an exercise of constantly updating whoever is working on that file. It could be done, but again, I don't know whether the pain is worth the gain. Right now, they register the senior officer.

Generally, companies that are lobbying fall into two categories. In one, they are constantly in contact with regulatory frameworks--the banking community, the pharmaceutical industry--and they have their own lobbyists because there's more than enough work to keep somebody busy constantly. Or it's a company that has one issue they're trying to address because of something that has come up. If you throw them both in the same basket, you're going to create quite a compliance burden on the company that's only going to be there once every three or four years.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Recommendation four is that the act should be amended to require lobbyists to disclose all oral communications about prescribed subject matters with designated public office holders regardless of who initiates them. Do you think that's a reasonable recommendation?

[Joseph Jordan]

Well, you and I could be standing beside one another at the urinal and have a conversation and that would have to be registered. So I mean, that one, I think.... You people need to be streetwise. Is just going near a lobbyist going to pollute your minds to the sense that you're going to turn the government in a bad direction?

I guess logistically it can be done. I'm already, as a registered consultant lobbyist, subjected to the highest standard in terms of the rules. But if you go that route--you know, things that happen at a cocktail reception--I think you'll fundamentally put a burden on organizations and associations that represent groups of entrepreneurs, let's say. I think the compliance burden there will be extremely high.

Right now it's pre-arranged and it's initiated by the lobbyist. Those are the communications that fall under the category. So by eliminating pre-arranged--

[The Chair, NDP, Jean Crowder]

Thank you, Mr. Jordan. We're well over seven minutes.

[Joseph Jordan]

Okay. Sorry.

[The Chair, NDP, Jean Crowder]

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Madam Chairman.

Thank you, Mr. Jordan, for your presentation today.

I note that you said off the top that the office has performed admirably and efficiently. We appreciate hearing that--albeit, you have made some recommendations that I'd like to go over with you.

Rule 8 has come up in the past, frankly, and I did have a number of organizations talk to me, and their representatives talk to me, specifically about rule 8 because they want to comply. They want to comply with whatever the ruling is.

I'm asking you this more as a person who is registered: Do you think a rule that came down that indicated that if you are registered as a lobbyist you should not be allowed to participate in any political activities would be a fair rule or a rule that would unfairly target people, in your view?