Information & Ethics Committee on March 4th, 2013

[The Chair, NDP, Pierre-Luc Dusseault]

Order, please. We will begin the 68th meeting of our committee. As you can see on the agenda, we are receiving two representatives from the Government Relations Institute of Canada during the first hour. Joining us are Mr. Patrick, the institute's president, and Mr. Thurlow, the chair of the Legislative Affairs Committee. We are continuing our statutory review of the Conflict of Interest Act.

Gentlemen, thank you for joining us. You have 10 minutes to make your presentation. We will then have a question and answer period, which will last about 50 minutes.

Without further ado, I will yield the floor to Mr. Patrick.

[Jim Patrick, President, Government Relations Institute of Canada]

Thank you, Mr. Chair.

My name is Jim Patrick. I'm senior vice-president of the Canadian Wireless Telecommunications Association and president of the Government Relations Institute of Canada this year.

Joining me is Scott Thurlow, president and CEO of the Canadian Renewable Fuels Association and chair of GRIC's legislative affairs committee.

We're pleased to be here today to speak to the committee's review of the Conflict of Interest Act. It was exactly 13 months ago that we were here to speak to your review of the Lobbying Act.

GRIC was founded in 1994 by government relations professionals in response to the growth and maturing of the industry over the past several decades. GRIC fosters high standards of practice through professional development and adherence to a professional code of conduct.

We also speak on behalf of Canada's government relations community on matters pertaining to the relationship between the lobbying industry and government. Our membership includes consultant and in-house lobbyists from non-governmental organizations, universities, charities, national trade associations, crown corporations, and private companies, both domestic and multinational, extending across the breadth and depth of the Canadian economy.

The Lobbying Act, by and large, governs activities of lobbyists. The Conflict of Interest Act, by and large, governs activities of public office holders. Given that much of the day-to-day activities of lobbyists and public office holders involves interaction between the two groups, it should be expected that the two statutes would intersect and overlap in key areas.

This committee completed its five-year review of the Lobbying Act in 2012. It will soon examine legislative amendments to the Lobbying Act stemming from that study. This committee's 2013 study of the Conflict of Interest Act, therefore, gives you an excellent opportunity to ensure that the two statutes are as aligned as possible and that existing gaps and overlaps between them do not work against the objectives of either statute.

We have three principal recommendations.

Specifically, first, the standard for determining whether a lobbyist has placed a public office holder in a conflict of interest should be the same as the standard for determining whether a public office holder was placed in a conflict of interest by a lobbyist.

Second, the rules on what types of gifts a lobbyist can offer a public office holder should be the same as the rules on what types of gifts a public office holder can accept from a lobbyist.

Third, post-employment restrictions on public office holders should be streamlined. They should be administered and interpreted by a single authority—in our view, the Conflict of Interest and Ethics Commissioner.

[W. Scott Thurlow, Chair, Legislative Affairs Committee, Government Relations Institute of Canada]

The standard for determining whether a lobbyist has placed a public office holder in a conflict of interest should be the same as the standard for determining whether or not a public office holder was placed in that conflict of interest by a lobbyist. GRIC notes that for public office holders the Conflict of Interest Act arguably sets the criteria and meaning for a real conflict of interest only. I say “arguably” because the committee has heard evidence that the test for apparent conflict of interest is implicit in the act. The Lobbyists' Code of Conduct, on the other hand, explicitly targets both real and apparent conflicts, creating a situation where the ethical bar could be seen as higher for lobbyists than for public office holders and a situation where lobbyists can be guilty of placing a public office holder in a conflict of interest that the public office holders were never actually in.

As GRIC noted in its last appearance before this committee, in February 2011, the Commissioner of Lobbying tabled a report in Parliament finding that a lobbyist had breached rule 8 of the Lobbyists' Code of Conduct and had therefore placed a public office holder in a conflict of interest. This ruling pertained to actions that took place in 2004, five years before the current rules were put in place. The retroactive application of the 2009 rules to 2004 events was never addressed or explained by the Office of the Commissioner of Lobbying. Moreover, the Conflict of Interest and Ethics Commissioner had already concluded, based on the exact same set of facts, that the actions in question did not constitute a conflict of interest on the part of the public office holder.

In other words, one officer of Parliament examined the facts and concluded that a public office holder was not in a conflict of interest, and then another officer of Parliament examined the exact same set of facts and concluded that a lobbyist had placed the public office holder in a conflict of interest, which the public office holder was apparently never really in. Logic, due process, and the fundamental tenets of natural justice dictate that once a public office holder is found by a quasi-judicial body not to have been in a conflict of interest, no individual can then reasonably be found by another quasi-judicial body to have placed that public officer holder in a conflict of interest based on the same set of facts.

[Jim Patrick]

For these reasons, GRIC recommended to this committee last year that the Commissioner of Lobbying's standard for determining whether a lobbyist has placed a public office holder in a conflict of interest be consistent with Conflict of Interest and Ethics Commissioner's standard for determining whether a public office holder has been placed in a conflict of interest by a lobbyist. The standard should be the same under both acts, whether the test is for “real”, “apparent” or “potential” conflicts of interest. No one should ever be found to have placed a public office holder in a conflict of interest that the public office holder was never in.

Our second recommendation pertains to what types of gifts a lobbyist can offer a public office holder. The Conflict of Interest Act defines “gift or other advantage” in subsection 2(1) as the following:

(a) an amount of money if there is no obligation to repay it; and

(b) a service or property, or the use of property or money that is provided without charge or at less than its commercial value.

The act further states that:

No public office holder or member of his or her family shall accept any gift or other advantage, including from a trust, that might reasonably be seen to have been given to influence the public office holder in the exercise of an official power, duty or function.

The act further requires disclosure of any gifts or gifts exceeding $200 from any one source in a 12-month period and gifts over $1,000 are to be forfeited to the crown.

As you know, in its guidelines on gifts, including invitations, fundraisers and business lunches, the Office of the Conflict of Interest and Ethics Commissioner has noted that it interprets the definition of gifts to include such things as money, loans, property, memberships, services, meals, invitations to events, and invitations to galas and fundraisers. The guideline document goes on to explain that “no specific rule exists as to which gifts can be accepted by public office holders. The value of a gift is NOT a criterion of acceptability; it is a threshold for the purpose of disclosure to the Office and the public.”

[W. Scott Thurlow]

In its April 2012 report on the statutory review of the Lobbying Act, this committee recommended that an amended Lobbying Act “Impose an explicit ban on the receipt of gifts from lobbyists.” In its September 2012 response to this committee’s report, the government committed to pursuing a prohibition on lobbyists giving gifts to public office holders, and to rules specifying the value and nature of what types of gifts would be permitted and prohibited.

As it is this committee that will review upcoming changes to the Lobbying Act, which the government has signalled may include some additional restrictions on gifts from lobbyists to public office holders, you will have an opportunity to ensure that the rules on what a lobbyist can offer a public office holder are aligned with the rules on what a public office holder can accept from a lobbyist.

GRIC takes no position whatsoever at this time on what the definitions under the Lobbying Act should be when it comes to the value and nature of gifts that lobbyists can offer to public office holders. But we strongly recommend that you take the opportunity to ensure that the Conflict of Interest Act reflects the same definitions on the value, and nature, and acceptability of gifts that public office holders can accept from lobbyists, to avoid any confusion and conflict between the two statutes.

[Jim Patrick]

Principally, one major consideration you will have to address is the impact on charitable fundraisers and other not-for-profit events if you, as MPs, are unable to accept, for any reason, tickets to any of the dinners or receptions that are the lifeblood of many important charities, and foundations, and organizations across the country, including in your own ridings.

[W. Scott Thurlow]

Sections 35 and 36 of the Conflict of Interest Act describe restrictions and prohibitions on public office holders, and separately, on reporting public office holders, which generally involve one or two-year bans on dealings with former departments with which the public office holder had “significant official dealings” during a one or two-year period prior to his or her last day of office.

In addition, the Lobbying Act creates a five-year ban on former designated public office holders registering as a consultant lobbyist or in-house organization lobbyist. Former designated public office holders may, however, register as in-house corporate lobbyists provided they self-determine that they lobby no more than 19% of their time.

These multiple and overlapping definitions have already caused some confusion in the current examination of the Conflict of Interest Act, with some witnesses and members citing definitions found in one act when meaning to cite definitions found under another one. It is the submission of our association that you examine very closely the submission made by the Canadian Bar Association, which stated that:

The CBA believes that post-employment restrictions on public office holders should be consistently applied and enforced. To this end, the CBA believes that to the greatest extent possible post-employment restrictions on public office holders should be interpreted and administered by a single authority—

—that is, the Commissioner of Lobbying or the Conflict of Interest and Ethics Commissioner.

[Jim Patrick]

In conclusion, GRIC reiterates that, by virtue of the this committee's ongoing review of the Conflict of Interest Act, and your upcoming review of legislative amendments to the Lobbying Act, you have an excellent opportunity to ensure that the two statutes work together, and not at cross-purposes.

GRIC appreciates the opportunity to provide its views in this important proceeding and would be pleased to answer any questions the committee may have.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you for your presentation.

Without further ado, I yield the floor to Mr. Angus, who has seven minutes to ask our witnesses questions.

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

Thank you, Mr. Chair, and thank you, witnesses, for coming here.

I think we're certainly interested in the issues regarding anomalies between the Conflict of Interest Act and the Lobbying Act. It doesn't seem to make any sense to be able to prosecute one side of the conversation but not the other depending on what the rules are.

I'm interested in the issue of the lobbying code explicitly targeting real and apparent lobbying. It seems that we've heard at this committee in the past the legal principle that in order to be just, it must seem to be just. Yet under the Conflict of Interest Act, it says that it's just a real conflict, that the apparent aspect of it is implicit in the act. I didn't know that something being implicit was a legal principle. It seems that if someone is being called out for a real conflict, there is a higher threshold than it merely being apparent—but it wouldn't be the same with lobbying.

Would you suggest that we use real and apparent in both acts, or would you want the Lobbying Act to be loosened?

[W. Scott Thurlow]

I think the position we would take first and foremost is that they should be the same. So whether you pick one or the other, that is in the purview of this committee.

The second thing I would say is that common law has had more time since the creation of our country to discover through the assistance of judges what a real and apparent conflict of interest is. I think that in making these types of determinations, we should turn to common law as the best place to start.

That having been said, the Oliphant commission made several recommendations in this direction. Our comment first and foremost is that the standard for determining whether a lobbyist has placed a public office holder in a conflict of interest should be exactly the same as the standard for determining whether or not the public office holder in question was put in that conflict.

In practical terms, whether the Lobbying Act or the Conflict of Interest Act applies explicit tests for real, apparent, or potential conflict of interest, the standard has to be the same.

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

What surprised me when we were speaking with Ms. Dawson was the focus on gifts down to $30, but she didn't really clarify her position on political fundraising. We had a situation where the Lobbying Commissioner looked into the case of Ms. Raitt, I believe, and felt that selling tickets to a fundraiser was inappropriate. But Ms. Dawson didn't seem to find that it was, because it wasn't for personal benefit.

I think it is really important to get our heads around the issue of fundraising. It would perhaps be impossible to say that a lobbyist can't go to a fundraiser because a member of Parliament or minister might not be aware of it, but would selling tickets or holding the fundraiser be different?

From your experience in the industry, how do you think we could actually clarify the rules on fundraising, so they are fair but also ensure that there's not undue influence?

[Jim Patrick]

You're absolutely correct, in that Office of the Commissioner of Lobbying has held that fundraising activities for elected members are a personal benefit.

The office's interpretation of rule 8 of the Lobbyists' Code of Conduct is such that even a riding association is considered a personal benefit—almost your property—whereas we've heard, as you rightly state, from the Conflict of Interest and Ethics Commissioner that it's not personal interest. So if you are finding it confusing, I guarantee that everybody is.

We'll say what we said the last time we were here, that the rules need to be clear.

We don't have corporate and union fundraising in Canada. We have funds that are donated by individuals typically in small amounts. Those people, as much as you do, need to know that what they're doing is not going to prevent their chance of making a case to you in the future, that if they find themselves in another job that requires them to talk to government, they won't be prevented from doing so because seven years ago they attended a fundraiser.

If any area of the Lobbying Act is really to be clarified and defined, it should be the area around political fundraising, and this is the opportunity for this committee to do that.

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

If at a later point you gentlemen have some thoughts on it, I certainly think we'd be interested in hearing them, because it is about being fair and about just ensuring that we have clear rules so there are no “gotcha” moments here for any side. We need to have a fair system.

In light of that as well, I'd like to ask about the issue of gifts. I think as MPs we're probably obsessed, from our point of view. On any given Saturday night we have to go to three or four dinners that people expect us to go to. It's not as though we're getting a benefit from these dinners. Going to them is part of our job. Are those $30 tickets for the dinners personal benefits we're receiving for doing our work? Do we have to start to list all those? Or when the local organization comes and drops off the snow globe, do we have to actually price that? To me that seems like a different issue from one in which someone is giving box tickets to a deputy minister who's picking a contract.

We could lower the threshold for gifts. We could say no gifts at all; pay your own way. That's one option. But it seems there has to be a middle ground, so we clarify what a gift is and what would be seen as undue. I thought you said you didn't have a particular position in terms of the value for dollars, but is there a way we could actually walk through this so there's a little more clarity between the NGO dropping off its gifts and someone really trying to buy your influence?

[Jim Patrick]

First of all we think that increased transparency is always good and that an absolute prohibition isn't always necessary to achieve transparency. This committee recommended a complete ban on gifts to public office holders under the Lobbying Act, and the government seemed to agree in its response to your report.

Our primary concern is that this needs to be handled very carefully, because the definition of gifts, although there is something of a definition in the guideline documents that support the act, extends to charitable fundraisers and gala dinners. I suppose on that basis, you, as elected members, might find yourselves politically compromised by attending the Canadian Women in Communications dinner, for example. It's coming up. That's why I thought of that.

If there's going to be some level of prohibition on gifts that a lobbyist can offer a public office holder, then I think first of all that level should be the same as the level that triggers disclosure on your part. As much as we can synchronize the rules on what can be given, and what has to be disclosed or forfeited, those should be the same. Most importantly, it has to be at a level that you, as elected members, are comfortable with. I think that's the starting point for that discussion. We can give you a reaction, but I think the starting point has to be whether you, as elected members, are comfortable with a lunch. Is a lunch going to influence you unduly? Is a dinner going to influence you unduly? Is a snow globe? I've been in your office, and I've seen the box of snow globes. You still didn't agree with us on that issue, so I don't think the snow globe is where we need to draw the line.

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

Get me a bigger one next time.

[Jim Patrick]

Okay.

Is it the value of a lunch? Is it a ticket to a fundraiser? Is it a ticket to a hockey game? That has to start with you yourselves. This is one of those rare opportunities where a parliamentary committee is examining rules that apply first and foremost to itself rather than to common folk. I think that's where that discussion has to start.

Whatever the level is, we will advise our members to follow it, but any room between what a lobbyist can offer under the Lobbying Act and what an elected member can accept under the Conflict of Interest Act is just going to be a recipe for confusion. Again, think very carefully about the charities and the fundraisers in your ridings. Do you want to have to ask someone who invites you to come to the Kiwanis dinner whether they're a lobbyist? If someone says they're having a United Way fundraiser, do you want to have to get a legal opinion on whether that person works for the United Way as a lobbyist, because in their capacity as a United Way executive they ask the government for financial benefits? In going to that dinner in your riding have you just accepted a gift from a lobbyist?

We need clarity on all these things. But, again, the first question needs to be what are you comfortable with?

[W. Scott Thurlow]

If I could just add one quick thing to that, not all gifts have a pecuniary value that can easily be assigned to them. So the opportunity to meet your childhood hero, which may not cost you a nickel, may be of more value to you than it might be to anyone else at this committee, for example.

[The Chair, NDP, Pierre-Luc Dusseault]

Mr. Angus, your time is up.

I yield the floor to Ms. Davidson, for seven minutes.

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

Thank you very much, Mr. Chair.

Thank you, gentlemen, for being with us this afternoon.

I think you've heard from the questions that we're getting today—and I'm sure you've been following our study as we've been going through it—that the more we ask the more confusing it becomes. So I appreciate your candour and your suggestions.

One of the things I always find confusing are the definitions. I think when we look at the Lobbying Act and we look at the Conflict of Interest Act, we have definitions in two pieces of legislation that mean different things. Could you comment on that, and in particular on “public office holder”, “reporting public office holder”, and “designated public office holder”? We interchange those definitions back and forth. Could you comment on those and give us any suggestions about how we could coordinate those?

There's another term and I just don't know who can define it, and that is “influence unduly”. We talk about that a whole lot, but who's going to define it? What do you take that definition to mean?

[W. Scott Thurlow]

I'll take a crack at the first question you asked, which is how do we get one definition out of three seemingly different definitions that appear in two acts that have at their core purpose different objectives. The Lobbying Act is about governing the conduct of lobbyists. The Conflict of Interest Act is about making sure that elected officials who are just ordinary public servants aren't putting themselves in a position where they may look like they are compromised. I think there's good reason for there to be confusion, for the reasons you just stated.

In this case, the Lobbying Act is actually a creature of criminal law, whereas the Conflict of Interest Act is one about public service. I don't think you want to have confusion in a spot where an individual could be subject to a jail term or to a very significant fine. We are on the record many times, and one more time here today, that the post-employment rules should be consolidated under one officer of Parliament. We recommended to you which officer of Parliament that should be, as long as there's one definition. We completely agree with you.

We think it's appropriate that the officer of Parliament interpret and administer the post-employment rules, as long as it's one person making the interpretation. The way that laws and definitions change is through various public officer holders interpreting those statutes through their decisions and interpretations. If there's only one body offering those interpretations, you won't see that definitional creep.

Jim, did you want to talk about undue influence?

[Jim Patrick]

Well, there's not much more I think I'll say than I've already said, that it's really up to you to decide what you feel unduly influences you. If one gets to know somebody and feels comfortable enough with them to take their advice or to ask them a question on an issue, there's a level of influence there. But is it undue? Whatever the standard is, the committee needs to turn its mind to that in its report, and then as the process moves forward and the government responds and then tables the legislation to amend the act, it's going to be a key question.

On behalf of 308 of your colleagues, you'll be setting the standard for what is acceptable to receive as gifts, what counts as an influence or an undue influence. That will last for another five or six years. We don't have a precise definition to put in front of you today. We talked to our members about it; we didn't have a consensus position in the end. But I hope you can come up with one because it's something that we'll all have to live with for a long time.

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

So it's safe to say, then, that you feel that we definitely should be putting the definition of that in the act?

[W. Scott Thurlow]

The more specificity you can provide to the subsequent officers of Parliament and judges in interpreting the act, the better.

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

Okay. I want to talk a little bit more about the post-employment issue, which both of you've addressed. One of the things you recommended in your presentation was that definitions be streamlined and consolidated under the Conflict of Interest Act, and that a sliding-scale cooling off period for all categories of public office holder be strongly considered.

I want you to tell me about the sliding scale, whom you would apply that to, how you would apply it, and the rationale for that, please.