Information & Ethics Committee on Oct. 27th, 2016

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

All right. In your time in this role, and maybe since the code came into effect, do you see changes in the behaviour of lobbyists as a result of the new code. Do you see improvement or progress made that Canadians would support or feel good about? How do you gauge the progress that has been made?

[Karen Shepherd]

As I've said in numerous appearances, my experience with lobbyists is that they do appreciate the important role they play in democracy and they are wanting to comply with the act and the code. It's the active participation during the consultation process, where the lobbyists were actively participating and it can be demonstrated that things are changed.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Was it the consultation period between 2013 and 2015?

[Karen Shepherd]

The consultation period, yes. And the questions that were coming into the office as to whether they could...before they actually took on certain activities have increased. All of this to me indicates that in terms of trying to reinforce this culture of compliance, lobbyists are actually themselves being an important part of it.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

You mentioned the fines that have been levied in some of the instances that have called for disciplinary action. Do you think the fines are reasonable deterrents? A $7,500 fine is five times the maximum political contribution one can legally make. Is that an appropriate fine level? Do you think that fines need to be higher, or is that too high?

[Karen Shepherd]

The maximum fine is $50,000 for a summary conviction. For the $7,500, in that particular case, as well, it was the first conviction under the act, and the individual actually pleaded guilty. So in terms of that I think it was a reasonable fine, and I prohibited the lobbyist from lobbying for a period of four months.

I think what we're seeing with the $20,000 fine, and now the $50,000 fine, are there are serious consequences to breaching the act, to not respecting why there is an act in place.

November 4 is when the judgment will actually come out, but that $50,000 is what the crown has asked for.

[The Chair, Conservative, Blaine Calkins]

That takes us to seven minutes, Mr. Kelly.

We move to Mr. Blaikie, please.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thanks for coming today and thanks for your work over the past eight years, as well.

If this practice of hosting fundraisers and using ministers as the feature of the fundraising event is normalized, do you think there's a risk that in some of the lobbying activity that right now is happening and being registered, those fundraisers become another place to do lobbying? Lobbyists might be attracted to going to those events and trying to keep their lobbying off the books, as it were, by going to those fundraisers instead of doing it through the more formal channels?

[Karen Shepherd]

Actually, lobbying is communicating with a public office holder on one of the registerable activities under the act. If the individual paid and is lobbying that public office holder, there are requirements to register. It doesn't matter where the particular encounter occurs, whether it's in an office, at a reception, or somewhere in the airport lounge. If that becomes, as you say, a matter of course, the issue is, is it properly registered, which is what I was saying earlier. The issue that I'm looking into is this whole idea of whether lobbying is being done to the high ethical standards in those situations. So that's where I have the guidance, depending on what comes out of my looking into the matter, and it may need to be updated.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

If you're a minister of the crown, when anyone approaches you about any issue, that's an act of lobbying. For instance, suppose I'm a minister of the crown who represents a riding in B.C., and I go to a fundraising event in Toronto.

Do you think it's fair game to say that those rules don't apply because I'm just appearing as the MP for my riding in Vancouver, or do you think ministers of the crown are ministers of the crown wherever they are or whatever the event is?

[Karen Shepherd]

You are always a public office holder. If you are communicating with a public office holder, I will be looking at whether the lobbyist is properly registered. That was my point in saying that it doesn't matter where the public office holder is in terms of the airport lounge or sitting in their office. What's important is whether there has been a registerable communication.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Indeed.

It wouldn't matter how they attest that they were representing themselves at the event, whether they were there as an MP or a volunteer for a local organization. The fact that they're a minister of the crown means that when people are approaching them, they need to be following those rules.

[Karen Shepherd]

Yes, which is why I would be looking at the lobbyist in that situation.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

What are the consequences for the lobbyist if they're found to be purchasing access to a minister by going to a fundraiser? Are there consequences for lobbyists under the act if that's found to have happened?

[Karen Shepherd]

The consequences that exist right now for breaches of the code are reports to Parliament. As I was saying, I've tabled 10 reports to Parliament today, finding 12 lobbyists in breach. There are no fines or jail terms in comparison to the act because the code is a non-statutory instrument. That said, I don't think that the consequences of filing a public report to Parliament should be underestimated. The reputation of a lobbyist is important. Their ability to maintain or attract clients or employment is key. We saw during the review that there was at least one lobbyist who talked about the fact that if he was to be found in breach, he would lose clients.

From having tabled reports to Parliament, I also have seen the number of phone calls that come into the office from people wanting to ensure that they are properly registered. I think those public reports have shown that there are consequences.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

In the case of cash-for-access fundraisers, do you think there should be further consequences for lobbyists who are contributing at least to the perception that there's inappropriate access to ministers? Do you think that ministers' decisions may be affected by political contributions?

[Karen Shepherd]

As I've said, because I take all allegations seriously, I'm currently looking into the matter. At this point I don't have any further comment until I get a chance to analyze the situations.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I wanted to ask a couple of more general questions, then, about your experience over the last eight years.

What kind of unfinished business would you say you have, if any? What are things that the next lobbying commissioner should be looking at pursuing?

[Karen Shepherd]

The office right now is well established. There are always opportunities for improvement. The registry is something that needs to have investments put in it. Looking at today's technology and so on, we're currently trying to find ways for monthly communication reports to make it more mobile-friendly.

On the compliance side, while it continues to be important to do reviews and investigations, it is important to enhance the compliance programs that we are looking into, to be preventative.

On the education front, we are currently about to launch an evaluation on that particular program to see where it can be enhanced. One of the things that I hope to get into in the next few months is starting things in social media like a Twitter account, for example, and maybe opening something on LinkedIn.

Those are things to continue exploring.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you.

[The Chair, Conservative, Blaine Calkins]

You have a minute left, Mr. Blaikie, if you'd like. You're good?

All right. Thank you very much.

We now move to the last of our seven-minute round, Mr. Lightbound, the floor is yours, sir.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Thank you, Ms. Shepherd, for being here today. It's greatly appreciated. We're pleased to see you here again. We want to congratulate you on your mandate and the services provided to Canadians.

My first question concerns lobbying trends. I want to know what you've observed and what you think are the challenges for the future.

In the past eight years, have you seen changes in how lobbyists approach their work?

What are the major trends?

What should the committee look at in the future?

[Karen Shepherd]

From what I've seen, transparency and accountability requests have increased in recent years. More and more cities are implementing regimes to enhance accountability in lobbying cases.

The citizens are asking for more information. They want more compliance and transparency. When I think about the future, I wonder what measures we could implement. The monthly reports, for example, could be more transparent. The reports should indicate which lobbyists attend a given meeting. At this time, the reports provide only the name of the person responsible for the organization or business. They don't say who else is in the room. That's something the committee should review. In 2012, I made many recommendations.

The meetings are now oral and arranged in advance. If the lobbyists are lucky, they can have good discussions with MPs on Thursday and Friday evenings, in the break room. The lobbyists can seize these opportunities. In this case, since the event isn't planned in advance, the lobbyists don't have to register it. They must register it themselves, but they aren't required to disclose it in the monthly report.

Regarding transparency, there is also the concept of “a significant part of the duties.” Is that something we could review? My colleagues in the provinces have started basing their calculations on the number of hours. I believe in Ontario, it's 50 hours. It's interesting because that includes more people, but not those who own mom and pop shops.

We have a very strong regime in Canada. However, when I compare it to the regimes of my colleagues in the provinces, I think it's important to have administrative monetary penalties to strengthen the act. On one end, it's part of the continuum of education and oversight. On the other end, there is the transfer of convictions and reports to the RCMP. There should be a mechanism between the two, because it's very important for the regulator to be able to determine the appropriate measure in cases of breaches.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Please excuse my ignorance, but can you explain what you mean by the 50 hours in Ontario?

[Karen Shepherd]

Yes.

The lobbyist must register to lobby. When there has been 50 hours of communication between the public office holder and the lobbyist, it must be registered.

It's easier to implement and calculate. I've noticed that the threshold of 20%, the significant part of a person's duties in a month, is sometimes difficult to calculate. I think that's why the RCMP didn't take into account the threshold in some cases. What does 20% of the duties represent? Is it a 40-hour, 50-hour or 70-hour week? I think using the number of hours would make it easier for the lobbyist to make the calculation and easier for the regulator to strengthen the act.