Information & Ethics Committee on Feb. 9th, 2012

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you. I really don't have enough time to go back into a lot of this.

Mr. Conacher, you suggest the concept of transparency, and you look at suspicion. You have already indicated that because you choose not to register, you are suggesting that you feel there's something wrong. Are there other people in your organization, then, who are lobbying who you demand follow the rules? Is this simply something you do yourself?

[Duff Conacher]

No. As I mentioned, I was the only staff person. I'm now a board member of Democracy Watch.

I have very publicly stated that since I was here three times, pointing out the loopholes, and the government refused each time, I was going to de-register, because I didn't have to be registered, and that until the loopholes were closed, I would not register again.

I have been before committee three more times, and every time the committee and the government have continued to ignore the loopholes and have allowed secret, unethical lobbying.

[The Chair, NDP, Jean Crowder]

Thank you, Mr. Conacher. Your time is well up.

Monsieur Morin pour cinq minutes.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Thank you, Madam Chair.

It's clear, as Mr. Conacher said, that this act has far too many loopholes. The Conservative government is being lax when it comes to lobbying, which was also the case with the previous Liberal government.

My question is for Mrs. Yates.

You're quite familiar with the topic. For 2010-2011, only 5,129 lobbyists registered in the Registry of Lobbyists. Do you really think only 5,129 lobbyists are engaging in lobbying activities in Ottawa?

[Prof. Stéphanie Yates]

This question refers back to the famous definition of what constitutes lobbying. If we consider that it's a communication activity, so contact between a lobbyist and a public office holder, 5,000 may seem an appropriate or logical number. But if we take into account all the preparation behind these activities, I think it's fair to say that the number of people hired by this industry is much higher than that. I think a broadened definition would allow us to take into account all those people whose work contributes to the single contact or the single communication.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Thank you.

The way I understand it, true lobbying is much broader. There are a lot of people who do not register. It's interesting.

Last Tuesday, the commissioner for British Columbia said that when its members instituted administrative penalties in their legislature, registration in their registry increased by 70%. I think there must be a coercive effect. When people realize that they aren't required to register for various reasons, they find loopholes to get out of doing so. They don't register so that they might avoid the paperwork or avoid being in problematic situations. I think it's very important, and I think you agree with that, that this needs to be broadened.

Do you also agree with administrative penalties?

[Prof. Stéphanie Yates]

Absolutely.

I concluded my brief with that aspect. I think the commissioner's concerns are founded, in that she conducted reviews and inquiries, and that didn't necessarily resonate with the RCMP for various reasons. There should really be a regime that I believe she calls an intermediate regime, where we would have administrative penalties that would target breaches of the act and the code of conduct.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Thank you.

You also mentioned that eliminating provisions relating to the significant part of a person's duties—so 20%—is a good thing. But I have a small problem with that. Don't you think that this will lead to a gap between the lobbying activities of large firms, which dedicate 100% of their time to lobbying, and small non-profit organizations that meet with a public office holder once or twice a year?

[Prof. Stéphanie Yates]

In my brief, I clearly stated that I am in favour of keeping the concept of the 20% threshold. I think it's important to keep it just so we can target lobbying as it is currently understood, including preparation activities, and not the lone citizen who meets with his or her MP twice a year. The threshold is operational. It's possible to keep it, but we need to plug the gaps by broadening the definition of lobbying.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Thank you very much for those clarifications.

Since we're talking about improvements that we could make to the Lobbying Act, I'd like to know whether you think some aspects should remain intact because they work well and should not be changed.

[Prof. Stéphanie Yates]

I think a lot of improvements were made when the act was reviewed in 2008. The very fact that the commissioner is independent is, in my opinion, an essential ingredient to the proper functioning of the act.

Also, when we compare the various registries, it's obvious that the Canadian registry is fairly complete, even though I support the fact that we should perhaps add certain fields, particularly to clarify the funding of certain organizations. Nevertheless, the registry generally includes much more relevant and useful information.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Okay.

Mr. Conacher, did you want to add anything?

[Duff Conacher]

If I could say one brief thing about administrative penalties, a representative from the Government Relations Institute of Canada, when he testified, and also Joe Jordan, both said that when the commissioner reports that someone's violated the lobbyists' code, it's a serious penalty and no one would want to hire that person again. That's simply not a true claim. Michael McSweeney of the Cement Association of Canada was found to violate rule 8 of the Lobbyists' Code of Conduct and then he was promoted by the association to be president and CEO.

Will Stewart, in the same situation, when he was found guilty by the commissioner of violating the code for assisting Lisa Raitt with a fundraising event...I checked the registry and he has not lost one client since he was found to be in violation of the code. So that's an argument as to why administrative penalties are definitely needed.

In terms of what you should definitely not recommend changing, the Government Relations Institute of Canada said, “We're not talking about simpler rules or looser rules”, when they were here, but they are, actually. They want rule 8 gutted and turned over to the Ethics Commissioner. If that's done, then lobbyists will be allowed to do whatever they want for politicians and public officials they are lobbying, and also to give anything they want to them, because the Ethics Commissioner says there's no conflict of interest created when lobbyists fund raise for politicians they're lobbying and things like that. So the GRIC does want looser, weaker rules, and you should not gut rule 8. It's the most important thing.

[The Chair, NDP, Jean Crowder]

Thank you, Mr. Conacher.

[Duff Conacher]

We spent 10 years in court trying to finally get it enforced, and if it's gutted now, you're going back to the free-for-all where they'll be trading favours again, as there was back to Confederation.

[The Chair, NDP, Jean Crowder]

Thank you, Mr. Conacher.

Mr. Chenier, we're over time, but did you have a very brief comment on this?

[John Chenier]

Very brief, the difficulty has always been to define what lobbying is. That has always been the loophole that people have used. It was initially an attempt to influence, and, therefore, for the first 10 years we had lobbyists calling to just get information—they weren't attempting to influence a decision—and then they would advise their clients. They did not have to register at all for that activity.

When the attempt to influence was removed and it became just contacting a public official, that brought more people out to register. But it seems to me that the definition of lobbying, as Ms. Yates has said, has to be expanded to include the preparatory work, the strategizing, and everything else, which is what good people do.

[The Chair, NDP, Jean Crowder]

Thank you, Mr. Chenier.

Mrs. Davidson.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

Thanks very much, Madam Chair, and my thanks to our witnesses here today. We've certainly seen some interesting presentations.

I'd like to go back, Mr. Chenier, to the definition of lobbying. You were just getting started on telling us a little bit about it.

Ms. Yates, you said you would support keeping the 20% rule but broaden its definition.

I would ask each of you to expand on how you would broaden that definition. Some of the witnesses talked about travel time being included in that 20%. Maybe you could address that as well.

[John Chenier]

I'm afraid I have to disagree somewhat with Ms. Yates on the 20% rule. I think it does have to be changed. I think it does have to be removed, and removed in such a way that we don't include all the people who are coming on lobby days, like constituents. On the other hand, it does capture what I consider to be the major loophole—people coming and being very active and effective in a campaign for maybe two or three days, but not appearing at all on the registry.

As to the definition of lobbying, the lobby community, by and large, from the period, say, 1889 to 2000, chose whether or not they wanted to register. They chose whether they wanted to be visible on the registry or not. It was not compulsory for most of the paid consultant lobbyists, because they don't really do a lot of lobbying on their own. They do a lot of information gathering, and they know who to see. As long as you didn't have to arrange the meetings, you didn't have to register. They could, as we say, take on an undertaking, advise the client, design the lobby campaign, tell everybody who to see, gather all the information that they needed about where the government stood on the issue, who was going to make the decision, when it was going to be made, and then bring in the troops, normally the client who understood the issue, to visit the government officials.

As long as the other people made the arrangements for these meetings, this was not registered activity. They could come to town, spend three to five days making their case, press their issue, leave town, and there would be no trace of that lobby campaign happening. None. Legally, it was not required.

When they changed the rule from an attempt to influence to contacting a public official, then that activity became visible. If you were contacting a public official to get information, you were skirting it whether or not you decided to register. Most people decided to register.

We still have people who can plan a strategy, know who to speak to, advise people who to talk to, what the issues are, get people to find the current information—and they don't appear in the registry at all. That comes down to your definition of lobbying.

If you have an undertaking, and you're advising a client on what to do, then, to me, that's lobbying. Whether or not you actually do the personal contacting is irrelevant.

[Prof. Stéphanie Yates]

As for the 20% rule, I think the objective is the same. We want to be able to target the true lobbyists and ensure that the individual citizen or single community organization that knocks on an MP's door once or twice every six months doesn't have to register.

Mr. Chenier said that rules need to be made to establish that distinction between true lobbyists and occasional lobbyists, if we can call them that. The 20% rule is just a tool. It isn't perfect, but it's what we found. A distinction is made by saying that if someone lobbies for more than 20% of their time, that person is a true lobbyist. The problem is that, since the definition includes only that part of the communication with the public office holder, that means that all the activities that Mr. Chenier was talking about are not taken into consideration. If we broaden the definition to include all those activities, including the travel expenses, I think that most of the lobbyists would very quickly reach that 20% threshold. Then we would be able to make the distinction between true lobbyists and occasional lobbyists, who go and see his or her MP once every six months. That person would very likely not reach the 20% rate and would not have to register. The 20% rule isn't perfect and people can always try to get around it, but by broadening the definition, I think we'd be able to respect the spirit of the act behind that rule.

Let's go back to what shouldn't be changed, which is the question the member asked. In Quebec, we have a distinction between the lobbying done by profit-oriented organizations and lobbying done by non-profit organizations. As I wrote in my brief, this creates a two-tier system. It gives selective transparency and, in my opinion, the last thing we want to do is eliminate the 20% rule, which would introduce this two-tier system where non-profit organizations would not have to register. That's the danger of eliminating the 20% rule.

To wrap up, in the United States, the fourth largest lobby is the American Association of Retired Persons, a non-profit organization. Among the things that should not change, above all else, it's introducing this distinction.

[The Chair, NDP, Jean Crowder]

Thank you, Ms. Yates.

We're well over time, Mrs. Davidson.

Monsieur Dusseault, pour cinq minutes.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Madam Chair.

I still have a few quick questions to ask.

First, I found the Bruce Carson matter particularly surprising when I heard about it through the significant media coverage it got. At the time, there were very minimal penalties, if any. But if there were penalties, how much could they be? For example, Mr. Carson engaged in lobbying and could have had a contract for about $250 million. do you really think that small penalties—I think it's $25,000 in British Columbia and in Ontario—would be enough? Do you think that people who lobby for such large contracts and for so much money are really going to fear those penalties?

[Duff Conacher]

The Bruce Carson situation points out two things. First, the media found it out, not the Commissioner of Lobbying. It's part of the scandal that no audits are being done to find out who's even meeting with ministers. I mean, that would be a very simple thing. The commissioner currently has the power to do that under her general enforcement administrative powers, but she's not. She's sitting back and waiting for the media to discover situations.

Second, if someone is going to profit greatly from a contract, it doesn't mean you need to have a penalty that equals the size of the contract to get them to register, as long as it's a significant penalty. You heard the commissioners in three provinces say they already have that power, and the Ontario commissioner wants it.

A penalty of $25,000 is adequate, I think. You can't go too high or it becomes quasi-criminal, and then you have an issue of whether an administrative tribunal can, under the charter, levy such a high penalty. So there is a dollar amount above which you can't really go, or you'll get into the problem of having an administrative tribunal with the power to levy that penalty.

[John Chenier]

I would also say that having the power to fine someone communicates a message to the public as well. If there's a $25,000 penalty and the penalty is indeed applied, then people say, “Oh, wow, the maximum was applied here.”

But when you have no penalties whatsoever, other than a mentioning, it's sort of like, “Tsk, tsk. That's really bad.” It gives the wrong impression as to whether this is really bad or really good. Having that penalty in place and imposing it communicates a message beyond the monetary amount.