Information & Ethics Committee on Feb. 25th, 2013

[The Chair, NDP, Pierre-Luc Dusseault]

Order, please.

Good afternoon everyone and welcome to the committee's 66th meeting. As planned, we are continuing our study of the Conflict of Interest Act.

Today, we are pleased to welcome Mr. Giorno and Ms. Froc, representing the Canadian Bar Association. Mr. Dodek, from the University of Ottawa, was also supposed to join us, but he will not be here today. We will have an opportunity to hear from him at another meeting. We are also pleased to welcome Mr. Boisvert, who is a professor at the École nationale d'administration publique.

As usual, we will begin with presentations. Each witness will have 10 minutes. We will then move to the question and answer period.

Without further ado, I will yield the floor to Mr. Giorno, from the Canadian Bar Association. You have 10 minutes.

[Guy Giorno, Executive Member, Canadian Bar Association]

Thank you. Ms. Froc will begin.

[Kerri Froc, Staff Lawyer, Law Reform and Equality, Canadian Bar Association]

Thank you, Mr. Chair, and honourable members.

The Canadian Bar Association is pleased to appear before this committee today to address the statutory review of the Conflict of Interest Act.

The Canadian Bar Association is a voluntary association of 37,000 lawyers across Canada, whose primary objectives include promotion of the rule of law, improvement of the law, and improvement in the administration of justice. It is in the spirit of this mandate that the members of our administrative law section, through its law of lobbying and ethics committee, have made the comments that we have submitted to you in writing and will speak about today.

Guy Giorno, an executive member of the CBA's administrative law section and the chair of its law of lobbying and ethics committee, is here with me today.

I'll turn it over to him to address the substance of our comments on the review.

[Guy Giorno]

As Kerri said, I'm an executive member of the CBA's national administrative law section, and I chair the CBA's committee on the law of lobbying and ethics.

Everyone covered by the Conflict of Interest Act holds a privileged position and each has volunteered for public service.

In Canada, public office holders are not conscripts.

Whether by seeking election or by accepting an appointment or employment, each public office holder freely chooses this responsibility. Public office holders voluntarily accept the public trust knowing they must maintain that trust and knowing they must be seen to maintain it.

The Supreme Court of Canada has observed, “preserving the appearance of integrity...[is]...as important as the fact that the government possesses actual integrity.”

In this context, allow me to highlight a few of our recommendations.

We agree with the Conflict of Interest and Ethics Commissioner that Parliament should close the loophole by which the Governor and Deputy Governor of the Bank of Canada are not covered by the act. We support the commissioner's call for greater transparency in reporting of gifts, including extending reporting to all public office holders, and reducing the $200 thresholds.

Perhaps the most significant shortcoming of the Conflict of Interest Act is that it lacks teeth. The act contains 44 rules, 19 positive obligations or duties, and 25 prohibitions. The prohibitions and one-third of the duties are unenforceable. No one can be charged for breaching a prohibition under this act. No one who defies a prohibition will pay a fine. Other than being named in a report to Parliament, there is no sanction for violating any of the 25 prohibitions or for breaching one-third of the duties under this act.

In that case, the rule of law is not respected. If the law sets rules of conduct, those rules must be enforceable. They must be enforced, and their enforcement must be clear.

What's more, the current scheme results in unfairness and inequality under the law. Laws are drafted by civil servants and passed by politicians. When civil servants draft and politicians pass laws on ordinary citizens, those laws include penalties. When civil servants drafted and politicians passed the prohibitions in this law, which applies to senior civil servants and politicians and to political aides and political appointees, penalties were absent.

We recommend that the commissioner be given authority to impose administrative monetary penalties for all contraventions of this act. We also recommend that the act be amended to require the government to address and respond to each breach.

Since the Federal Accountability Act was introduced in 2006, the Canadian Bar Association has been concerned about the restriction that prevents public office holders from belonging to a professional association like the CBA. Our recommendation 3 endorses the commissioner's request for authority to permit a reporting public office holder to engage in outside activities where these would not be incompatible with the reporting public office holder's public duties or obligations.

Political fundraising can give rise to conflict of interest issues, especially when the targets of fundraising are stakeholders of a politician's department or when the funds are solicited from lobbyists who are lobbying the politician or his or her office or department. The Prime Minister has issued sound guidelines for political fundraising in the guide called “Accountable Government”. Unfortunately, the fundraising rules in “Accountable Government” do not have the force of law and cannot be legally enforced. We recommend taking the Prime Minister's fundraising rules and writing them into the Conflict of Interest Act.

We disagree with the commissioner on automatic divestment of assets whose value could be affected by government policy. She wants to reduce from 1,100 to as few as 140 the number of people subject to automatic divestment and to replace it with case-by-case divestment. We believe automatic divestment of controlled assets should remain required of all employees of ministers' offices, except students.

Contacts between lobbyists and ministerial aides number in the thousands. Much of this lobbying relates to decisions that could affect the value of publicly traded stocks and other controlled assets. This is reason to maintain the current law, which provides that no minister's office employee shall own a controlled asset.

Finally, we are concerned that statutory reviews such as this one are not taking place during the timeframes required by law. These statutory reviews are more than administrative or housekeeping matters. They were mandated by Parliament to provide a formal outlet for stakeholders and other citizens to comment on their experience with the operation of legislation that might have been controversial or passed quickly or embedded in omnibus bills.

A review of the Conflict of Interest Act was required by July 2, 2012. However, the House of Commons did not assign this committee to conduct the review until December 10, 2012. The CBA is deeply troubled by the repeated disregard of deadlines established by statute. The Parliament of Canada Act should be amended to mandate the Speaker of the House to assign the appropriate committee for a statutory review if none has been assigned by the deadline.

Thank you very much.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you.

I will now yield the floor to Mr. Boisvert. You have 10 minutes.

[Dr. Yves Boisvert, Professor, École nationale d'administration publique]

Similarly to my colleagues, I will give you a few recommendations, but from a significantly different perspective, as I will refer to political science research. We have cross-referenced analyses of scandals, of the institutionalization of government ethics measures and of recommendations made by international NGOs, including the OECD.

The objective was to raise the main concern, whereby the existence of provisions was no longer sufficient, and the effectiveness of those provisions now had to be assessed. That is something our parliaments have not worried about thus far. The main concern was to implement measures, establish a piece of legislation and appoint a commissioner, but very few tools have been provided to ensure that the measures enable those in charge to fulfill their mandate and their mission. When it comes to that, I agree with my colleague who was worried about the strength logic. Our analyses of Canadian federal provisions clearly indicate that those responsible for enforcing laws and regulations in ethics and integrity are not able to truly carry out their mandate, owing to a lack of financial and human resources. I think that this is one of the main concerns when it comes to ethics and integrity.

The expectations and goals of such a piece of legislation should be set out much more clearly in the preamble. Beyond the shopping list of very technical expectations regarding public office holders, it is unclear whether those laws have highly specific goals, which consist in maintaining the integrity of public decisions. I think it's essential to begin by pointing that out. I believe we need to move on from the logic of technical laws in favour of more living legislation, whereby we would aim to implement legislation on ethics and integrity.

Usually, four objectives should be pursued. The first is the socialization of targeted individuals; the second is the development of public office holders' ethical competence; the third is the clarification of deontological rules and expectations; and the last is increased severity of punishment. Without severity of punishment, those provisions will completely fail to convey to public office holders the government's prioritization of those aspects.

Our analysis of scandals indicated that the clarification of the following three points should be a priority in your legislation. For starters, special interest should be defined. Unfortunately, legislation often tends to refer us back to issues of personal, even financial, interest even though special interests are much more important and broad. Many political and administrative scandals, in all OECD countries, involve issues that stem from political party financing. In such cases, the public decision is negatively influenced, and political parties choose special interest. It should be very clear that special interests go well beyond the direct interest of the public office holder and their family. We see in the legislation that the scope is basically fairly limited. That gives rise to a considerable problem. Special interests can be completely outside the public office holder's private sphere. This aspect requires some serious thought.

Gifts and other benefits make up the second point. That issue was fairly absurd during the 1980s and 1990s because no one could understand that gifts could greatly influence public decisions. Our scandal analyses showed, surprisingly so, that the increasingly frequent acceptance of gifts was one of the major flaws. I invite you to look at the work done by the Charbonneau commission. I can guarantee that the increase in gifts to public servants was a very significant phenomenon.

As the OECD indicates very clearly, gifts are always a gateway to corruption. In other words, failing to take gift giving seriously leaves the door wide open to the gradual acceptance of corruption.

Today, the debate no longer consists in figuring out if the gift is worth $100 or $200, but in determining whether it's still tolerable for public office holders to accept gifts—regardless of their nature and value. As anthropologists say, a gift is never free; it always leads to expectations of a counter-gift. Anthropologists could show you very clearly that this is part of cultural dimensions.

One last matter appears crucial to me. Considerable revision is needed in a very porous aspect of all laws—post-employment. That's probably one of the weaknesses common to all legislation that has to do with the management of public office holders' conflicts of interest. Those in charge of managing post-employment issues should be provided with considerable capacity. It's clear that your current legislation and the budgets allocated to the commissioner probably do not provide sufficient leeway for managing post-employment cases.

Post-employment issues, especially in Quebec, were rather problematic on several levels—in Montreal alone. In a number of cases, 100% of senior officials and a few elected officials immediately obtained positions within companies involved in certain problematic cases. So the management of post-employment is a considerable issue.

In Quebec especially, the lobbyist commissioner is having a very hard time managing post-employment. Those in charge tend to only define the post-employment aspect related to lobbying, even though post-employment may be much broader. We may be talking about simple compensation for a past decision that has nothing to do with lobbying. In that case, the gift involved is huge. We are talking about compensation of several hundred thousand dollars in a prestigious position within a company where a transaction did take place. Those are not illusions, but rather realities that exist in a number of OECD countries.

I would like to raise one last issue I worry about. I am talking about the need for governments to provide real tools to those in charge of ethics and integrity. It's time to stop implementing legislative tools with overly limited budget envelopes and staff. That's something we have seen repeatedly in a number of government institutions.

The challenge lies in providing the organization that manages ethics and integrity cases with effective tools and, if possible, encouraging parliamentarians to get involved much more directly in the implementation of a regulatory system dynamic.

Whether we are talking about the management of lobbying, ethics and conflicts of interest, or disclosure, parliamentarians could provide us with a much more effective regulatory system if there was at least some coordination among them and much more narrow collaboration. Canadians could finally regain some confidence in their political and administrative institutions.

Thank you.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you for your presentation.

Without further ado, we will begin the question and answer period with the committee members.

Mr. Angus will speak first, and he has seven minutes.

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

Thank you, Mr. Chair.

Thank you to the witnesses for being here today. This is a fascinating discussion.

Mr. Giorno, I certainly agree that preserving the appearance of integrity is the same thing as maintaining integrity. That's fundamental.

It also seems to me that if we're creating laws, the laws have to be clear. If they're not clear, can they really be just?

I have incredible respect for the commissioner, but my concern when we're looking at this act is there are times when I look for clarity and I don't really know what it is. It seems it's a little loosey-goosey particularly when it comes to fundraising. When I asked the commissioner about gifts—and perhaps I'm in a different realm; I'm not a deputy minister, but I am offered baseball caps and cups. If that's buying my vote, well, I don't know. It all sits in a box. I don't mind announcing 30 dollars' worth of snow globes; it's not a problem to me. But when I ask about political fundraising, we don't really hear any clear answers on what the threshold is. I'm concerned. It's not that we're trying to make our jobs impossible. As you know, we live in the world of political money. That's what political parties live on but there has to be clear rules.

I'm asking for a sense of where the line is and how we divide it. Is it that difficult to do? I see in your brief you say that we should have clear rules. What would you suggest?

[Guy Giorno]

First of all, Chair, the CBA position deals only with the Conflict of Interest Act. We haven't commented on the members' code, although, as members will appreciate, there are similar provisions.

Speaking to the Conflict of Interest Act, we draw attention to the fact that in annex B of “Accountable Government”, there are, concerning political fundraising by ministers and parliamentary secretaries, what we think are very clear and thorough guidelines that seek to separate quite clearly the lobbying and decision-making related to government policy from political fundraising.

The member is correct that currently, as concerns political fundraising, under the act there are no guidelines. In fact, there is only one rule, a very simple rule in section 16 that applies to all fundraising. It simply says that you can't personally solicit funds.

We believe that at least in the area of political fundraising, again, as it affects reporting public office holders—that's the only group of office holders covered by the Conflict of Interest Act—the specific rules in annex B of “Accountable Government” should be imported into the act. They would provide a lot of the guidance and clarity which the member has asked for, at least under the act, not speaking to the MPs' code.

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

In terms of the issue of divestment of assets, the recommendation is...assets of those...“who have a significant amount of decision-making...”. It seems to me that's a very subjective interpretation.

I see that your recommendations say we need to have clear rules on automatic divestment. What would you suggest?

[Guy Giorno]

Right now the rules are clear. The current rule is that if you're a reporting public office holder, you are subject to automatic divestment. Divestment is defined as selling or putting in a blind trust. That's very clear.

Our recommendations would maintain that clarity and maintain almost all of the automatic divestments, except in narrow cases, which I think would be clearly defined. Interns or students in ministers' offices, again is a clearly defined class. Then we would allow the commissioner to exempt public appointees, that is, Governor in Council appointees, where the nature of their mandate is so narrow—it doesn't apply to multiple sectors of the economy; it applies very narrowly and there's not likely to be an issue related to the decisions affecting the value of assets. The example we use is the Immigration and Refugee Board.

Our proposal would maintain the current clear requirement, narrow it very slightly, and only in clear ways.

I agree with the member's question that for the commissioner to say the automatic divestment rule ought not to apply to anybody except somebody who exercises significant authority leaves open a question. She names chiefs of staff to ministers only. She does not mention deputy chiefs of staff, policy advisers, directors of policy, all of whom—we know—talk on a daily basis sometimes to lobbyists who are lobbying on government decisions that would affect the value of publicly traded securities.

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

In terms of the administrative monetary penalties, the clarity of that, for us it's an important issue because it allows differentiation between errors in judgment and people who have done something wrong.

How would you see the administrative monetary penalties? Are there limits? When do they start? Have you built a context around how that would be applied?

[Guy Giorno]

We begin with the rule of law, and this is a very important point. Chair, the member's question allows me to underscore this. Parliament chooses which laws it makes and which laws it doesn't. In this case Parliament has chosen to create 44 rules and to put them in statutes. They're not guidelines or policies. Parliament voted to put them in statutes, 25 prohibitions and 19 mandatory obligations. It's open to Parliament to repeal them.

In the case of every other law that I know of enacted by Parliament, that is, the laws affecting common folk, there are penalties for those breaches, and then a lot of the considerations the member has asked about are dealt with in the judicial process. In many statutes due diligence is a defence. In many statutes there's a requirement of both a mens rea and an actus reus, that is, a mental element giving rise to the offence, and the actual activity giving rise to the offence. We trust the judicial process.

The member is correct that there are sensitivities in balancing considerations, but for common folk, we don't say that because it's very difficult to look at whether a law was broken or not there are no penalties. Ordinary people are subject to fines. They're prosecuted. What we think is a matter of rule of law.... Actually, it's absolutely utterly incompatible with the rule of law for those who write the law to say, “Well, because of these considerations, for us there are no penalties.”

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

I was looking at your brief. You also made a statement about the obligation of government to report each breach.

How do you frame that?

[Guy Giorno]

Right now, section 19 of the act says:

Compliance with this Act is a condition of a person’s appointment or employment as a public office holder.

We know that right now, under the few sections, the 13 of 44 rules for which there can be penalties, there are breaches. In the last 12 months alone the commissioner has found 17 breaches. It appears there has not been any follow-up on these. We know, for example, that those 17 public office holders were not removed from appointment or employment as a result of the breach. As far as we can determine, there was very little attention paid in Parliament to those breaches and very little attention paid to them in the news media.

As a matter of the rule of law, there must be consequences attached to breaches. Our recommendation is that when a breach is found, in addition to the penalty, the government that employs or appoints the individual will have to respond to the breach, having taken into account the breach and taken into account section 19, which says that obeying the act is a condition of employment or appointment, by saying either “We're going to maintain the employment or appointment, and here is why”, or “We're not going to, and here is why”.

What is not acceptable, in our submission, is for breaches to be found—again, there's a small number of rules for which there can be penalties under the act as it now stands—and for nothing to happen as a result of them.

We make a recommendation that applies to the government, although in our brief we comment on the absence of scrutiny in Parliament and in the news media of these breaches. If this is a significant and serious act, then breaches are significant and serious and attention ought to be paid to them.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Mr. Angus.

Thank you for your answers, Mr. Giorno.

I now yield the floor to Mr. Carmichael for seven minutes.

[John Carmichael, Conservative, Don Valley West, ON]

[Inaudible--Editor]

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

Thank you.

Thank you very much for your presentations this afternoon. They've been extremely interesting. As you can well imagine, this is a topic on which we're hearing many different opinions, but we're hearing some common ones as well, and that is very helpful.

Mr. Boisvert, you talked a bit about the clarifying of personal interests. You felt this needed to be one of the priorities. Do you feel that it should be clarified as a definition, that it should be better defined in that manner? Are there other definitions that need to be looked at as well?

Could you comment on that, please?

[Dr. Yves Boisvert]

You used the words “personal interests”. That expression is barely used nowadays because people are increasingly using “special interests”. Special interests are at play. The shift from the dimension of personal interests to that of special interests already significantly broadens the interests that may be called into question when a public servant's decision is influenced.

I talked about political parties in my example. Does prioritizing or accepting some influence on a public decision because we want to place our political party in a favourable situation that enables it to receive funding constitute a problem? Earlier, we discussed the whole issue of gifts that is absent. However, regarding that legislation, I think a debate should be held to clarify the aspect of political party funding. Focus should be placed on the actions taken by public office holders, especially ministers, in terms of funding.

To quote Quebec, ministers did have profitability standards to meet in fundraising, and that could lead to all kinds of pressure and negative perceptions. From that point of view, we could have a very negative perception of the idea that someone may have had undue influence on a public decision solely for the purpose of helping their political party acquire funding more easily. That already implies a broadened scope, which is well beyond a public office holder's direct personal interest. We have crossed over into the area of special interests.

There are other cases we found interesting, where public office holders' family members and presumed friends seemed to garner certain favours. Are those not special interests related to a family network—a close network as described here? The expression of a broadened special interest could bring us to question the validity of a public decision that would favour friends. As we jokingly say back home, Mr. Accurso had a huge number of friends. Everyone was Mr. Accurso's friend. That raises the following question. How could decisions have been negatively affected with regard to that? In any case, when it comes to perception, Canadians have the right to ask questions.

Given that such a piece of legislation is being discussed again and questioned, I feel that special interests must clearly be broadened to determine what types of interests could be favoured by unfair and inequitable decisions for Canadians.

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

Thank you.

You talked a bit about “personal interest”. You talked about “friend” and that definition. Perhaps it needs to be looked at too. You talked about gifts, and if I understood you correctly, I think you said there should be no gifts.

I have a question. I think those of us sitting at this table are not in a position where we, as just members of Parliament, receive much in the way of gifts, but what about cultural issues and things of that sort? There are some instances where ministers or others who have to report are in a situation where if they did not accept a meal or did not accept a cultural gift, it could be seen as a slight. Can differentiations be made?

[Dr. Yves Boisvert]

Let's presume that you do not receive many gifts—and you are the first to recognize that. I would venture to say that's for the best. I teach public servants and managers, and we get them to think about the fact that gifts are inappropriate in our public organizations. We agree that those public office holders should be even more exemplary. If that is required of the lowest-level public servants, the principle of denunciation is always expected.

As for exceptions, I talked about them in my very succinct presentation. One of the points—which is often debated in scientific or institutional literature—is the exception that is always there for those who have diplomatic mandates or are carrying out a diplomatic mission. I am talking about people who are abroad and face different cultural traditions. That does not prevent most experts on the issue from saying that, in such cases, the obligation to actively disclose the gift received should be implied. In addition, where possible, upon returning to the country, the person should give that gift to an institution that would be in charge of managing gifts received by public office holders.

There is a whole set of suggestions when it comes to that. In some countries, an annual auction is organized for the gifts received by public office holders, and the money collected is given to non-profit organizations, among others. So there are a number of scenarios possible to avoid impoliteness while respecting the spirit of not accepting gifts—the prohibition on gift giving in that perspective. I think we should head in that direction, instead of reconsidering the standards involved in gift giving.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Ms. Davidson.

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

Okay, thank you. Am I done?

[The Chair, NDP, Pierre-Luc Dusseault]

Your time is up. You have already been talking for seven minutes.

So I will yield the floor to Mr. Andrews for seven minutes.

[Scott Andrews, Liberal, Avalon, NL]

Thank you, Mr. Chair, and thank you to our witnesses for coming today. We're seeing some common themes throughout our witness testimony in comparing to the commissioner what recommendations her office has made.

Mr. Giorno, from your experience from being around this place, what is it about the Conflict of Interest Act, the 19 duties and the 25 prohibitions, that public office holders don't seem to recognize those rules? Or it’s not that they don't recognize those rules, but I think if you asked them, they wouldn't be able to tell you half of them if they had to spell them out.

Is the problem that they know there are some general rules about conflict of interest, but not the specifics? Will the penalties bring more attention being paid to them? Do you understand what I'm asking? Why is it that of these 19 duties and 25 prohibitions, if you ask people, they probably wouldn't be able to name half of them?