Information & Ethics Committee on Feb. 16th, 2012

[The Chair, NDP, Jean Crowder]

I call this meeting to order.

Good morning, everybody. I know we have a couple of people substituting. I want to welcome Mr. Sopuck and Ms. Sims to the committee today. I also want to acknowledge that Mr. Boudria, a former member of Parliament, is in the audience.

I'd like to welcome our witnesses to meeting number 24 on the statutory review of the Lobbying Act. The witnesses have 10 minutes to present. Our first round of questions from the members is seven minutes, which includes the member's question and your response. I will ask people to keep to their timeframes.

I will turn it over to you, Mr. Coates. I'm not sure who's presenting, but perhaps you can introduce your co-witness.

[Michael Coates, President and Chief Executive Officer, Hill + Knowlton Strategies]

My name is Michael Coates, and I'm the president and CEO of Hill + Knowlton in Canada. With me here today is Elizabeth Roscoe. She's the head of the public affairs practice here in Canada.

Thank you very much, everybody. It's great to be here. We want to thank you for the opportunity to provide our input into the statutory review of the Lobbying Act. As the industry leader, we are proud of what we do, and we feel it's important to share our perspective about a profession that has not only provided us with an exciting and meaningful career but makes a valuable contribution to public policy.

We're pleased that during previous hearings this committee and many MPs have acknowledged the contributions lobbyists make to provide you with information that helps you with your jobs.

We submitted a brief to the committee and will use our time today to provide you with a brief overview of the five recommendations we have to improve the Lobbying Act.

Hill + Knowlton Strategies has operated in Canada for 30 years. We have grown to 250 professionals and associates located in nine offices across Canada. The public affairs practice at Hill + Knowlton actually makes up just one-third of our business; two-thirds of our business has nothing to do with government whatsoever. Furthermore, we encourage all of our public affairs clients to make representations on their own.

We also take pride in our employees' high ethical conduct. Those engaged in lobbying—less than one-third of our total workforce—must sign, as a condition of employment, Hill + Knowlton's code of conduct and adhere to the Lobbyists' Code of Conduct and the government relations code of conduct.

At H+K we believe that lobbying is a fundamental right. It produces more informed public policy decisions and is ultimately in the public interest for citizens and government. In essence, lobbying can be a bridge between business, NGOs, and government. Our consultants provide value, and they are qualified in a variety of policy fields, with many having extensive experience with government as both partisans and permanent officials.

Social media has been a real game changer. It can influence legislative, regulatory, or policy changes without even requiring a lobby registration. These facts support our fundamental premise that in today's environment there is less emphasis on who you know than on what fact-based information is communicated to inform a decision.

Our recommendations here today were formulated by our domestic experience, but also with the input of our H+K strategists from Washington, London, and Brussels. Our own findings are consistent with the Commissioner of Lobbying, who recently noted that Canada's lobbying legislation, political financing laws, and conflict of interest rules are clearer and stronger than in most G-8 countries. In terms of transparency and disclosure, Canada's Lobbying Act has stronger provisions than those in place in the U.K., Brussels, or Washington.

While the 2008 revisions to the Lobbying Act strengthened transparency and accountability, we think its application has fallen short in a couple of respects. Changes are needed to make it more consistent with the preamble of the act and the principle of free and open access to government.

Our main message here today is that we welcome tougher enforcement, because we want everyone to engage with the same high standards of conduct that we ask of our consultants. With greater powers of enforcement, we also call upon the committee to lighten the regulatory burden of monthly contact reports and move to quarterly updates of registrations, which are more consistent with what we found in other countries.

Elizabeth will take us through the recommendations.

[Elizabeth Roscoe, Senior Vice-President and National Practice Leader, Public Affairs, Hill + Knowlton Strategies]

I'd now like to briefly describe our recommendations to the committee.

Our first recommendation is to amend the act's enforcement powers. During her December 13 appearance, the Commissioner of Lobbying requested that Parliament grant the office additional powers to include an administrative monetary penalty mechanism, the AMP. We recommend that the Commissioner of Lobbying be granted this increased enforcement power, as long as the office identifies and follows judicious due process and the rules are exercised consistently. All registered lobbyists should be held to the same standard.

Our second recommendation is to delete the designated public office holder carve-out, which has been a consistent theme throughout your hearings. In-house corporate lobbyists affected by the five-year Federal Accountability Act ban are allowed to lobby if they self-determine that they lobby no more than 20% of their time. In our view, this creates confusion for corporations, for organizations, for consultant lobbyists, and frankly, for members of Parliament. Going forward, we recommend that the act be amended to remove the significant part of the duties test for former designated public office holders, thereby clarifying that they could not lobby for the five-year period, as applied to all other designated public office holders.

Our third recommendation is to clarify the treatment of corporate board members. External officers of a corporation who are members of a board of directors are treated as consultant lobbyists. We recommend that Parliament clarify the treatment of outside directors on commercial boards. They receive remuneration, and some, as part of board responsibilities, are asked to communicate with government in one of the prescribed forms of activity. The outside board members, in our view, should be treated as part of the corporation. This change would align with current corporate governance procedures and disclosure.

Our fourth recommendation is to delete the requirement for monthly communication reports. In our brief, we point out that, while disclosure and transparency are common objectives for governments in the U.S., the EU, and the U.K., no other jurisdiction requires monthly communication reports. Our brief demonstrates that the monthly OCL communication report is a secondary report that provides no further clarity on the issue or the subject matter than originally identified in the primary registration. In the interest of transparency and efficiency, we recommend that registered lobbyists be required to update the primary return on a quarterly basis to include who they meet with. This recommendation is more consistent with the accepted norms of commercial confidentiality.

Our fifth recommendation is to affirm registered lobbyists' ability to engage in volunteer political activity. The ability for registered lobbyists to freely participate in political campaigns should be, in our view, clear and unequivocal. Our brief shows that the U.K., the EU, and the U.S. treat lobbying and volunteer political activity very differently from how Canada treats them. Furthermore, unlike the U.S., Canada prohibits corporate donations. We propose that the OCL's Lobbyists' Code of Conduct reflect the same principles found in the Public Service Employment Act, which allows public servants to participate in the political process, similar to all other Canadians.

In conclusion, we believe, in terms of transparency and disclosure, that Canada's Lobbying Act has stronger provisions than other jurisdictions we work in, and that adjustments are required. We believe our suggested approach—which closes loopholes, provides for greater powers of enforcement, and moves to a quarterly update of registrations— will maintain that transparency, provide consistency, and ultimately strengthen Canada's Lobbying Act.

Thank you, Madam Chair.

We look forward to the discussion with committee members.

[The Chair, NDP, Jean Crowder]

Thank you for that succinct presentation.

We'll go to

Mr. Dusseault, you have seven minutes.

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

Thank you, Madam Chair.

I want to thank the witnesses for being here today. It is interesting to hear from lobbyists whose involvement in this environment is different from that of other witnesses.

I read your recommendations and wondered whether you in fact agreed with the five-year waiting period. My understanding is that public office holders would all be subject to the same five-year rule.

[Michael Coates]

Thank you very much for that question.

Madam Chair, from our perspective, we don't take a position on the five-year rule. It's up to the government to decide how it wants to regulate the activities of people in the government. We will work with whatever regulation the government comes up with.

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

Do you think that the five-year waiting period is sufficient? Do you think it works well? Should public office holders be subject to that rule? Do you have an opinion on that?

[Michael Coates]

It's a very tough standard, but again, it's not something that Hill + Knowlton feels is an issue with regard to the way it conducts its business.

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

You say you would like the 20% rule to be removed. Could you tell me what you think about that time limitation? Do you feel that removing the limitation would be beneficial and contribute to the transparency of the Lobbying Act?

[Elizabeth Roscoe]

Thank you for the question.

As you can see in our brief, with regard to the 20%, we think the same rules should apply to all consultant, corporate, or organizational lobbyists. I think earlier this week the commissioner, the Government Relations Institute, the Public Affairs Association, and even the Canadian Bar Association made reference to this not being consistently applied. Therefore, when individuals are lobbying members of Parliament or government officials, it is not clear who they are dealing with.

We believe that a change going forward to delete this carve-out would create a consistent group of individuals on the designated public office holder side.

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

In the same vein, I would like to know where you would draw the line in the case of, for instance, my 100,000 constituents who would occasionally like to see me and talk to me. The same goes for all the MPs' constituents. Should they register under the Lobbying Act every time they meet with their MP? Would that apply only to those who are being paid? How do you see that?

[Elizabeth Roscoe]

Certainly that is part of the definition, that you have to be paid to be considered a lobbyist.

I should be clear. We are not suggesting changing the significant time. We're only suggesting that the carve-out be deleted for designated public office holders. Many of your constituents will not be undertaking lobbying for any more than perhaps 10% of their time. We're not suggesting that they should be affected by this change. It's only those who are designated public office holders.

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

In another one of your recommendations, you suggest that the commissioner be granted much greater powers. I agree with giving the commissioner at least the power to impose financial penalties.

How heavy do you think the fines should be? Do you agree with me that applying such penalties could encourage lobbyists to comply with the act or at least to register?

[Michael Coates]

This is our essential message, Madam Chair.

We think enforcement is key here, not only enforcement of the act overall, but also of the code of conduct.

There are cases in which the Commissioner of Lobbying has taken quite a bit of time to get back to people she may be looking at who have potentially infringed upon the code. We think that if she had additional administrative monetary penalties, perhaps that timeframe would be shortened and we'd get more expeditious justice.

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

The power to impose monetary penalities is being discussed. Have you also considered the possibility of granting the commissioner the power to investigate?

Currently, when a case requires investigation, it is transferred to the RCMP. The commissioner has no investigative powers. Do you feel that would be something to consider, given that the RCMP has never followed up, in any of the cases? Do you think that the commissioner could have the jurisdiction to conduct those investigations?

[Elizabeth Roscoe]

Yes, we've heard that this is one of the additional powers she's seeking. We defer to the parliamentarians at the table to understand whether that expansion of investigative powers is required. What we've asked for, if you deem that both the investigative powers and the AMP are going to be added to the office, is that judicious process be applied, that individuals—and I think you've heard other witnesses ask for the opportunity to be informed that they are being investigated—have due process and the opportunity to seek counsel, if that investigation is undertaken.

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

Okay, thanks.

[The Chair, NDP, Jean Crowder]

You have 10 seconds left.

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

That's fine, thank you.

[The Chair, NDP, Jean Crowder]

Thank you very much.

Mr. Del Mastro, you have seven minutes.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you very much.

And thank you to the witnesses for their presentation, for their brief.

I'd like at the outset to comment on one of the things you said initially, which the committee has recognized: that folks working in government relations do valuable work in many cases. I think the committee has also recognized that it's a democratic right. As such, I'd like to think that we've moved forward in a very positive fashion on an act that many witnesses have commented on, saying that largely it's working and is achieving the objective that was set out.

In this statutory review, we're looking at how we can make it better and improve transparency. So I thank you for your very constructive comments in that regard.

I'll start off with a couple of things. First of all, you recommend deleting the requirement for monthly communications. We've had witnesses suggest that this takes a few minutes. To me, it seems that this specific requirement is providing the kind of transparency that Canadians want to see. They want to know, when government makes a decision, who may have been talking to government—whom the government consulted, in some cases. Often the government is asked, “Who did you consult with?”

As you are a group that represents many of the stakeholders that you would like to see consulted on significant pieces of legislation, I think it's important that we are in fact having that pushed out and saying, okay, these groups did in fact meet with these individuals—members of Parliament from all parties, what have you—in the lead-up to this bill or after a bill was introduced.

I think this is the kind of transparency that Canadians want. We've been told that it isn't excessively burdensome.

Why would you like to see this requirement removed?

[Michael Coates]

Thank you for that question.

Madam Chair, the additional burden, from a regulatory standpoint, is not a lot. Here's the issue, as I see it. If you look at the preamble of the act, you are looking for a system in which the registration of paid lobbyists does not impede free and open access to government, and you have to finely balance that. There was a time when we used to send our clients in very early when there was a transaction of some type—perhaps a merger or an acquisition—or when a client of ours wanted to change a regulation or policy. We're reluctant to do that now, because these reports are taking place in almost real time. We know that competitors of our clients are tracking all of these registrations. They're, in a sense, acquiring information about the private strategies of our clients.

In fact, we've seen a pullback, both in our advice and in the interests of our clients, in actually wanting to talk to government as much before a number of these decisions are taken. If you go into a quarterly review.... I have to tell you, I don't like contact reports; I tell you that right now. But if you have to have contact reports, I'd just as soon they be done on a quarterly basis, so that at least it's not taking place in real time.

[Dean Del Mastro, Conservative, Peterborough, ON]

With due respect, I'd simply argue back that I know there are those out there, like Duff Conacher, who'd say that's exactly why we have the monthly reports, because we want to know what the strategies are, what's behind some of the efforts taking place on the Hill. That's why there's value in them. I'll just say that and move on.

We've heard about the carve-out for designated public office holders—the 20% rule—from a number of folks. Did you look at the classification for designated public office holders? We've had many groups come in and suggest that not all designated public office holders are equal, with respect to how the restriction should apply.

Did you look at that at all? Did you consider that, or is it something that you left for the committee to determine in its review?

[Elizabeth Roscoe]

We defer to the committee for those classifications. You're best able to determine whether it's applicable to all levels within either a minister's office or a member of Parliament's office.

[Dean Del Mastro, Conservative, Peterborough, ON]

Okay, I'll get together with Mr. Dusseault, and we'll figure this out together.