Information & Ethics Committee on Feb. 14th, 2012

[The Chair, NDP, Jean Crowder]

Good morning. Welcome to meeting number 23 on the statutory review of the Lobbying Act. Welcome to our witnesses.

Witnesses, for your information, I expect your presentations to be 10 minutes long for each witness, for the Canadian Bar Association and the professor.

When we come to the question and answer portion of our meeting, the first round of questioning will be seven minutes, and that will include both the member's question to you and your response, and I will cut you off if necessary.

I will begin with the Canadian Bar Association. I don't know who's taking the lead, but would you also introduce your colleagues? Thank you.

[Judy Hunter, Lawyer, Legislation and Law Reform, Canadian Bar Association]

Yes, I will. Thank you very much.

Good morning, committee members.

My name is Judy Hunter. I'm a staff lawyer with the Canadian Bar Association. I want to thank you for the invitation to present the CBA's views to you today on the five-year statutory review of the Lobbying Act.

I'd like to tell you a little bit about the CBA. It's a national association of over 37,000 lawyers, law students, notaries, and academics, and an important aspect of the CBA's mandate is seeking improvements in the law and the administration of justice. That is the perspective from which we appear before you today.

The CBA's brief was prepared by members of an ad hoc working group composed of lawyers with special knowledge of and expertise in the Lobbying Act, including Mr. Jack Hughes and Mr. Guy Giorno. Mr. Giorno will begin and will be followed by Mr. Hughes. Both are prepared to answer any questions from the committee.

Thank you.

[Guy Giorno, Member, Canadian Bar Association]

Passage of this law reflected Parliament's determination that lobbyist registration and reporting were necessary to principles of democracy, the rule of law, government transparency and accountability, and confidence in the integrity of government decision-making.

The CBA, being a strong proponent of the rule of law and democracy, supports the objectives of the Lobbying Act. Our submission recommends amendments to the act intended to improve and strengthen transparency and accountability as well as to ensure fairness and consistency in the application and administration of the act. We endorse many of the lobbying commissioner's recommendations to strengthen the act. In particular, the CBA makes eight recommendations.

First, we propose to eliminate the “significant part” test. In other words, this means removing the minimum volume threshold for registering in-house lobbying. We agree with the commissioner that this provision is difficult to interpret and enforce. The current provisions allow some corporations and organizations to avoid registering their lobbying activities. Moreover, and perhaps most significantly, the current threshold lets a former designated public office holder avoid the five-year lobbying ban by working as an in-house lobbyist for a corporation for less than 20% of his or her time.

Second, we propose a complementary amendment that would harmonize disclosure rules for corporations and associations. Quite simply, under the current law, when an association is required to register, it must name every employee who lobbies. On the other hand, when a company is required to register, it must name only some of the employees who lobby. Lobbying by corporation should not be any less transparent than lobbying by non-profit groups. We propose that each corporation return include the name of every employee whose duties include lobbying.

Third, we propose that board members, directors, partners, and sole proprietors, when they lobby, be registered as in-house lobbyists, not as consultants. They certainly are not consultants. Treating them as consultants is confusing, and it places an unnecessary administrative burden on individuals, a burden that is more appropriately borne by the company or the organization than by individual board members. Treating board members as in-house lobbyists would streamline the implementation without lessening transparency and disclosure. In fact, by placing all lobbying activity for a company or organization under a single return, the change would actually enhance transparency and accountability. This is the approach taken by Alberta, British Columbia, Manitoba, and Quebec.

Fourth, we believe that monthly reports should be more transparent by, one, as recommended by the commissioner, naming the in-house lobbyists who are meeting with the designated public office holders, and two, naming all the public office holders present at these meetings with designated public office holders. This change could be made by amending the regulation or by amending the act.

Fifth, we endorse the commissioner's request for statutory power to impose administrative monetary penalties for contraventions of the act or the code, subject to a statutory review or appeal process. Currently there is no penalty for breach of the code. Administrative monetary penalties would fill this gap. At the same time, if people are now to face sanctions for breach of the code, it is only appropriate that the code be incorporated into the act or the regulations.

As for breaches of the act, these allegations are currently referred to the RCMP, which investigates. The RCMP and the crown attorney determine whether charges should be laid. In the history of the federal lobbying regime, no charges have ever been brought.

I speak from personal experience as a former public office holder. While I was in office, a former official, someone subject to the five-year ban, tried to arrange a meeting between me and his client. Consistent with our policy automatically to refer any suspected wrongdoing to the appropriate authorities, I reported the matter to the lobbying commissioner, who referred it to the RCMP. Subsequently, I met with and gave evidence to the RCMP investigators. I never heard the result of the RCMP investigation, but the commissioner's latest annual report indicates that after every single Lobbying Act investigation, the RCMP declined to lay charges. This must include the case I had referred, even though it involved a clear and blatant attempt to arrange a meeting contrary to the five-year ban.

Under the current system of RCMP investigation, serious incidents of non-compliance result in no practical consequences for the lobbyists. Allowing for administrative monetary penalties will fill this void.

To be clear, the CBA does not support removing the offence provisions from the act. We believe that administrative monetary penalties and prosecution for offences should coexist as alternative and mutually exclusive processes under the act.

[Jack Hughes, Member, Canadian Bar Association]

Sixth, as a technical matter, we believe that the commissioner's current administrative review process should be enshrined in the act. Our submission lists a number of reasons why this amendment would improve the administration of justice.

Seventh, we believe that Parliament should follow the lead of those provincial legislatures that prohibit people from lobbying government at the same time as they have a contract to advise government on the same subject matter. Alberta, British Columbia, Manitoba, and Quebec have decided to prohibit this blatant conflict of interest. So should Canada.

Eighth, and finally, we note that the post-service lobbying restrictions for many public office holders are divided between the Lobbying Act, administered by the Commissioner of Lobbying, and the Conflict of Interest Act, administered by the Conflict of Interest and Ethics Commissioner. The categories of office holders who are affected are different, the durations of the restrictions are different, and the restrictions themselves are different. We see merit in harmonizing the restrictions under one act or the other, though the CBA does not take a position as to which one.

In closing, we appreciate that this committee has heard from various stakeholder groups, including representatives of the professional lobbying industry. While many lawyers on occasion act as registered lobbyists, both as consultants or in-house, the CBA has sought to approach this review from a different perspective, namely, strengthening the administration of justice and upholding the rule of law. To that end, the members of our working group were chosen because of their collective experience and legal expertise in interpreting, applying, and advising on lobbying transparency legislation across Canada. We are therefore grateful for this opportunity.

We would be pleased to answer any questions you may have.

Thank you.

[The Chair, NDP, Jean Crowder]

That's great. Thank you very much for your succinct presentation.

Mr. Hudon, you have the floor for 10 minutes.

[Prof. Raymond Hudon, Professor, Department of Political Science, Université Laval]

Good morning. Thank you for the invitation. I am very honoured.

If I may, I will be making my presentation in French because I still believe that I am in a bilingual country.

Let's talk about lobbying. Today I'm going to be making quite a different presentation. First of all, you know that I am a political science professor at Laval University and that I work on the questions surrounding this topic. Nevertheless, today I will be taking a much more general approach, one that I would say is much more philosophic.

I believe that lobbying is at the heart of the problems we are currently experiencing in our democracy, but perhaps not for the reasons that spontaneously spring to mind. The general public has a lack of confidence—we all know this—in public office holders, especially elected officials and soon even parliamentary institutions. Given that some very competent people who appeared before me have already drawn comparisons between legislation as I have already done myself for the lobbying commissioner in Quebec, I decided, this morning, to do another type of exercise. You may find it too general and not sufficiently relevant. I will let you judge for yourselves. I will begin with three questions that are so fundamental that they will surprise you.

What is lobbying? Who is a lobbyist? Who is a public office holder?

Without wanting to insult you and without coming out and saying that the current legislation is not welcome—quite the opposite, I think that it should be maintained—I do believe that it is not really hitting the mark, given the way that this phenomenon of lobbying has evolved. This practice has changed dramatically over the past few decades. Since the Lobbyists Registration Act was passed in 1988, many things have changed, leading me to my three general questions.

As a preamble, I will quote from the French National Assembly in order to explain my positions clearly. In 2009, in Paris, the French National Assembly introduced a lobbyist registry. It was said, and I quote:

Lobbying is considered a form of expression for civil society.

In order to justify the registry, it was added that:

[...] lobbying can help the National Assembly be consistent in its approach to economic, social, scientific and cultural change, and spur democratic, sound and effective policy.

We are not talking about gossip and tabloid newspapers here. We are talking about "a democratic, sound and effective policy".

This is now being said in the land of Jacobinism and interest in the common good. We have to understand what this means. Up until recently, the French did not want to have anything to do with lobbying because it was viewed, at the outset, as being simply scandalous.

What's lobbying?

I'm going to restrict myself to the basic question. Moreover, if you read the brief, entitled "Simple Questions for Complex Problems", you will see that although the questions are very simple, they cover very complicated subjects.

What is lobbying? I will begin by looking at our Canadian and American legislation. This legislation does not apply everywhere in the United States, because the federal American law I am going to refer to makes some very clear exceptions. Our provincial and federal laws define lobbying as being a

written or oral contact with the public office holder.

But now this is marginal in the practice of lobbying. In other words, the act that we are now intelligently reviewing, and this must be done, covers only a small percentage of what today constitutes the practice of lobbying. I think that we need to be aware of this. The spirit in which we work is therefore dramatically different. You are no doubt aware of this, but I would nevertheless remind you about the basic difference between the concept of lobbying contact and lobbying activity. Lobbying activity involves preliminary research, the development of strategies and so on and so forth. However, today this is primarily the stage where people focus their efforts.

I could elaborate further on this issue, but I am going to immediately go to my second point because it has a direct impact. Who is a lobbyist? Is it the individual who writes to or contacts the public office holders? But what about the person in the office who prepares a strategy and is paid by the lobbying firm, is he or she not a lobbyist? This is an important point which, moreover, has an impact on the post-employment cooling off period rule that the Canadian Bar Association representatives referred to repeatedly.

Of course, if you are not the one who makes contact with a public office holder, you are not breaking the law. Nevertheless, without quoting any names, you are aware that, in Quebec City as is the case in Ottawa, some former ministers did not wait five years before finding themselves good jobs in legal firms, even if they themselves were not lawyers. I will let you guess why. I am not condemning these people, but in order to cover these cases, I would argue that our legislation is inadequate. This may be a radical point of view, but I do feel that we need to be aware of and point out this shortcoming.

I will now talk to you about the new type of public office holders. Let us use an example which, although it does not pertain to anyone here, is something you are already knowledgeable about. If not, you will be interested in finding out about this matter. Here, in Ottawa, people have in all likelihood heard about the mayor of Quebec City and his arena. Recently, the mayor appointed somebody from the private sector to, in particular, negotiate in his name with Quebecor. Is this individual, who is at the helm of an insurance company and is completely competent—this is not what is at issue here—a public office holder? This individual is acting on behalf of a public office holder. You know that the Quebec City mayor is quite innovative when it comes to certain practices, but he is opening up an extremely important door in this case as it pertains to the legislation we are currently studying.

Given the way that things are evolving, we have to rethink the law. We cannot claim that we are setting the parameters for lobbying through this bill, or if we are, we are doing so in a very marginal way. Personally, I think that we need to give some thought to all of this. You recently had an election and there will soon be one in Quebec. You therefore know that there has been a worrisome decline in voter turnout over the past few years. According to some studies, this decline is not over. If such bills, regardless of whether they pertain to access to information or lobbying, lead people to believe that we are not making every possible effort to make our practices transparent, voters will tune out even more. And I do not believe that this is what we want for the future of our democracy.

Having said that, a final caveat is necessary. I am absolutely not proposing the establishment of a detective state. We have to be intelligent, but at the same time, we can do so in two ways. We must be aware of what is happening and go about it intelligently, that is to say in a well-balanced and level-headed way.

Thank you, there will no doubt be some questions. I am well aware of the fact that this is not an orthodox presentation. However, I think it was time to give it.

[The Chair, NDP, Jean Crowder]

Merci, Monsieur Hudon.

Now we'll go to the members' round. Welcome, Mr. Martin, to the committee for today.

We'll begin with you for seven minutes.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you very much, Madam Chair, and thank you to our witnesses today, the Canadian Bar Association and Professor Hudon, for your very welcome contributions to this debate.

Notwithstanding our best efforts, even through the Federal Accountability Act, to tie a bell around lobbyists' necks in a more effective way, we continue to be frustrated by what we see as the undue influence of well-connected political/Conservative lobbyists, both registered and unregistered, which we believe continues to undermine our democracy. More and more, we see access and influence becoming marketable commodities on Parliament Hill, and we believe we are at the precipice of a slippery slope towards the American model, where nothing happens if you aren't accompanied by a well-connected expensive political lobbyist. So in spite of our best efforts, it still comes down to who you know in the PMO.

I'm very interested to hear the representation from the Canadian Bar Association or the recommendation urging or at least ratifying the plea of the lobbyist registrar that they must be allowed to assign penalties. I can't believe the RCMP has never found anything wrong with anything that anybody has even done on Parliament Hill associated with influence peddling.

The difference between influence peddling and lobbying is about five years in prison. Illegal lobbying, I should say. There is such a thing as legal lobbying.

I guess in the context of the presentations we've heard, and even with the recommendations made, how do we protect ourselves from somebody as unscrupulous as a Bruce Carson skulking around in the corridors of power, peddling influence in a completely illegal fashion, but apparently getting meetings with important people? Is there any amount of regulation or even legislation that can actually stop someone who is determined to break the law? It takes two to tango. You can't lobby illegally without a willing partner. Rahim Jaffer would have been wandering around like some lost sheep in the hallways had he not been able to actually get meetings with people to promote and advance his own initiatives.

Perhaps, Mr. Giorno, you can tell us, for the bar association, is there anything in your recommendations that would actually give us some satisfaction to put a stop to the Bruce Carsons of the world or to put a stop to the well-connected guys who work hard to elect a government and then immediately step back and start selling access to that government, like the John Reynolds and the Tim Powers, the Geoff Norquays and the Ken Boessenkools, and the Monte Solbergs? And all these guys who aren't even registered as lobbyists but who are peddling influence on Parliament HIll with a preliminary phone call to open the door.... If you've still got the key to the PMO, maybe you shouldn't be selling access on Parliament Hill.

Is there any satisfaction in the recommendations that you have brought before us today that would lead us to believe that we can stop this kind of quasi-criminal activity, even if the RCMP won't prosecute?

[Jack Hughes]

Thank you, Madam Chair, for the question.

Mr. Giorno will deal with it in substance, but just as a general rule, as our colleague Ms. Hunter said, we are members of the CBA. We're also lawyers in individual law firms, and we are obviously not in a position today to speak about any specific cases. I appreciate that the member's question was more general in nature, and I'll let Mr. Giorno speak to those specifics. That was our proviso, that unfortunately we will not be able to deal with specific issues today.

[Guy Giorno]

The CBA doesn't have a position on individual cases, but the CBA has made recommendations that I think will address, Madam Chair, a lot of the concerns raised by Mr. Martin.

We believe that giving the commissioner the power to impose administrative monetary penalties will ensure that lobbyists who breach the code.... Mr. Martin has referred to a former member of Parliament who breached the code and there was no sanction except for a report in Parliament, and now the commissioner would be able to impose monetary penalties.

I should add that in the jurisdictions that allow for administrative monetary penalties to be enforced, they're not a few hundred dollars. I believe the statutory limit in Alberta and British Columbia is $25,000, a significant amount. That's the first comment.

The second is that removing the 20% rule, removing the 20% threshold, will make it easier to see who is lobbying and who is not, and therefore who is breaking the law or who is lobbying without being registered and who is not. It will also make the five-year ban more easily enforceable.

The Canadian Bar Association, as an institution, has long upheld the rule of law and the administration of justice. We believe that giving regulators like Karen Shepherd, the Commissioner of Lobbying, the tools the regulators need to enforce the act, and to ensure there are sanctions for violation, is the way to address that concern.

[Pat Martin, NDP, Winnipeg Centre, MB]

Would you agree with me, Mr. Giorno, that there is a proliferation of these well-connected political influence peddlers, not unlike in the days of Brian Mulroney, where Frank Moores and Fred Doucet and all these guys worked hard to put the Prime Minister in power and then immediately stepped one step back and started selling access to that Prime Minister for contingency fees and hourly fees?

When you say a penalty of $25,000, the 10% contingency fee that Rahim Jaffer hoped to achieve in his illegal lobbying would have been 10% of a $150 million bonus that he was trying to achieve for his clients. So the contingency fees can be 30%. It's illegal as hell, but it's happening all around us, Mr. Giorno. You were just here.

Are we being aggressive enough to try to preserve democracy so these guys aren't undermining everything that's good and decent about the notion of relatively equal access to government's great largesse, not better access and privileged access for those with deeper pockets or a friend in the PMO?

[The Chair, NDP, Jean Crowder]

A brief response, please. The time is up.

[Guy Giorno]

Sure, Madam Chair, very quickly.

I was citing Alberta and B.C. only as examples. Committee members will make their recommendations. Newfoundland and Labrador, for example, has a provision that allows, as a penalty, for profits made by lobbyists to be disgorged and paid back to the crown. There are different models.

In short, almost all of the specific claims Mr. Martin has made, if those things did exist, represent violations of the act as it now stands. Most of what Mr. Martin has described, if it was existing, would be illegal today without even amending the act.

[The Chair, NDP, Jean Crowder]

Great. Thank you.

Mr. Del Mastro, for seven minutes.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you very much, Madam Chairman.

Perhaps Mr. Martin ran out of names to drop. I could probably give him a list of everybody in our caucus maybe. He might want to drop those names as well.

[Pat Martin, NDP, Winnipeg Centre, MB]

[Inaudible—Editor]

[Del Mastro]

What would life be without some good name dropping, Madam Chair?

[The Chair, NDP, Jean Crowder]

Order, please.

Mr. Del Mastro, just one moment, please.

Mr. Martin, Mr. Del Mastro has the floor, so I would ask you to allow him his seven minutes, and we'll give you an opportunity if you're in the rotation again.

Mr. Del Mastro.

[Pat Martin, NDP, Winnipeg Centre, MB]

I have a point of order.

[The Chair, NDP, Jean Crowder]

Mr. Martin.

[Pat Martin, NDP, Winnipeg Centre, MB]

From what Mr. Del Mastro just said, I'd be happy to table a list of well-connected Conservative lobbyists who are operating legally and illegally, beating down the doors of the PMO on behalf of their clients.

[The Chair, NDP, Jean Crowder]

Mr. Martin, I'm not sure that's a point of order.

Mr. Del Mastro, continue with your seven minutes, please.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

[The Chair, NDP, Jean Crowder]

We, of course, did stop the clock for this interchange.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Madam Chairman. I'd be happy to see Mr. Martin's list of well-connected Conservatives. I think that would be good nighttime reading for me; I could get a few laughs before I go to bed.

I welcome today's witnesses. It's very interesting. I want to thank you for the very substantive recommendations that we've heard today specifically around the Lobbying Act. I believe we are hearing some very good testimony on how we can strengthen this act, because ultimately this is about transparency, about making sure people have faith in our democracy.

I wanted to begin with the Canadian Bar Association and ask them—you didn't touch on it but it has come up a number of times—specifically about rule 8. There was a big article yesterday that was written that talked about the fact that...I would actually argue that overwhelmingly the exceeding majority of people want to follow the rules. They just want to know what the rules are and in some cases the rules aren't as clear as they should be, and you've made some recommendations on that.

Rule 8 has been subject to interpretation. Are there any recommendations that the Canadian Bar Association has around rule 8?