Information & Ethics Committee on Nov. 29th, 2017

[Peter Kent, Conservative, Thornhill, ON]

Now you're well aware that the commissioner who handles the other side of lobbying is in a similar situation. An extension is coming to an end, and she has indicated that she will not continue. However, Commissioner Dawson has suggested in the past that the time is well due—and certainly for efficiencies of operation in the future—and that the two offices might well be merged.

Given your experience since 2008 in the office, on your side of the lobbied and the lobbyists, I'm wondering what your thoughts might be on a merging of the two offices.

[Karen Shepherd]

I guess I share a slightly different view, in that I think there's a reason for the two offices being separate. They were together at one point before 2004, when they were separated, and it was a court case that talked about institutional bias.

There are different things that would have to be looked at as well. When you look at something like public office holders, I believe under the Conflict of Interest Act—I don't know the exact number—it's 2,000 or something, but there are 350,000 of those covered under the Lobbying Act. There are some differences. There is some overlap.

What I've seen in the city of Toronto where there have been two bodies—and the same thing with overlaps—is that they have worked together with a memorandum of understanding. As I understand it, that has worked well in terms of doing investigations concurrently or jointly.

My recommendation before merging the offices would be to look at how the offices could work better together. Maybe that's something that could be studied during the legislative review, whether there are specific fixes that need to go into the act to allow the two bodies to maintain their independence but to work on combined interpretation bulletins, or investigations, which require you to do things in private but might have different focuses.

[Peter Kent, Conservative, Thornhill, ON]

As far as the operation of your office is concerned, you upset some in the lobbying community with your new reporting guidelines in 2015. How are those guidelines working now as compared with in previous years?

[Karen Shepherd]

Are you referring to the new Lobbyists' Code of Conduct?

[Peter Kent, Conservative, Thornhill, ON]

Yes, the code of conduct .

[Karen Shepherd]

When I first announced in 2013 that I was seeking a consultation to see if the code was meeting its objectives or should be revised, the initial reaction was, “What's wrong? We didn't request a change.” I think when they felt that I was truly listening and so on, the participation was quite extraordinary, which allowed me to go out with a stronger code, as required by the act in 2014 for consultation.

My experience has been that lobbyists do want to comply with the act and the code. What I've been seeing now, to really get to the heart of your question, is how, if they've reacted, they've actually been coming increasingly to the office to ask questions before taking action to make sure they conform. I think it's quite positive.

[Peter Kent, Conservative, Thornhill, ON]

Excellent.

There have been suggestions over the years that there be greater penalties provided for offenders under the act. What are your thoughts? Again, after 11 years, do you think that your office would function better and lobbyists would abide by the code of conduct if there were greater penalties for any offences or violations?

[Karen Shepherd]

Right now the Lobbyists' Code of Conduct is a non-statutory document so there are no fines or jail terms. There are reports to Parliament, but as I've said before, I think the consequences are quite significant when you think of the lobbyist's reputation in terms of maintaining or gaining employment. In terms of breaches of the act, for an indictment it is as high as $200,000, or two years in prison. For summary convictions, it's as high as $50,000, so there are fairly substantial fines.

In the past I have advocated for administrative monetary penalties, which would give the commissioner more of a continuum in terms of ensuring the appropriate compliance measure with the offence. Right now, using it for lesser transgressions such as for late filing, it would be educating and monitoring. Referrals to the RCMP for breaches of the act would then go further to charges. For breaches of the code, it would be reports to Parliament.

I think going forward I would see having more of a continuum and having the administrative monetary penalties, rather than making stronger hammers, if you will, at the other end, but instead having something in between the two extremes.

[The Chair, Conservative, Bob Zimmer]

Thank you. That's time.

[Peter Kent, Conservative, Thornhill, ON]

Okay. Thank you.

[The Chair, Conservative, Bob Zimmer]

The next up, for seven minutes, is Ms. Laverdière.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Thank you very much, Mr. Chair.

I would like to thank both of you for being here today.

Thank you for your presentation, Ms. Shepherd.

You have an annual budget of $4.4 million. In fact, that's less than it costs to install a skating rink in front of Parliament.

[Voices]

Oh, oh!

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

You said yourself that you have to carry out your activities on a very tight budget.

If you had fewer cuts and resource management difficulties, and if you had more resources and staff, could a lawsuit like the one you are facing have been avoided?

[Karen Shepherd]

Yes. The budget is tight, and we have put measures in place to be as efficient as possible so that I can fulfill my mandate.

Could I have avoided this situation if I had had more funds? It's really difficult to say because it's truly unprecedented.

The difficulty in terms of the funds for legal fees is that we don't know if there will be a lot of appeals.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Go on in English, please.

[Karen Shepherd]

If there are a lot of appeals, then you don't know how much court is going to cost you. With the office, I think I have always taken pride in using the dollars and so on wisely, so I would not want to be having such a large fund that it's going to lapse. When I initially started, we were putting a lot of money aside.

At the end of the fiscal year, no more than 5% of the amount can be carried forward to a subsequent year. So we use it at the end of the fiscal year.

Personally, I prefer to obtain surplus funds so that I can access them as needed.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

I know it's difficult to carry forward funds from one year to the next, but the fact that you had to dip into your funds for legal fees indicates the stress on your activities because of a lack of funding. Is that the case?

[Karen Shepherd]

Indeed, if we had more funding, we could do more. Currently I have only one lawyer on staff. We still manage to put things in place. However, in terms of the legal fees fund, it's really difficult to say because this is the first time since 2008 that the office, or myself, has been in a situation like this, before a federal court.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

You mentioned the fact that you have regular meetings with your managers to focus on the priorities, if I understand correctly. I have two questions about that.

First, it means that there are cases and files that you won't be able to handle because they aren't priorities. Do you have an idea of the proportion of files you have to put aside because you don't have the resources to handle them?

Second, when you decide on the priorities, what main criteria do you rely on to establish them?

[Karen Shepherd]

In fact, there are two facets.

When I talk about the priorities and the meetings I have with the directors and managers, I'm talking about what we do at the beginning of the year. We have to appear before you with the departmental plans in order to have an additional budget approved. When I say we hold regular meetings, I'm referring to a general services committee that studies what is being done about our office's projects, but not in terms of investigations.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Right.

[Karen Shepherd]

This year, we conducted a press review and assessed the priorities for the various projects for the entire office. Subsequently, we decided what we need to invest. As I explained, this year, it may be necessary to invest more in the registry system by drawing on our $300,000 discretionary fund.

In 2015, we wanted to amend the Lobbyists' Code of Conduct. We put more money into the budget for this project because I had to travel all over the country. We put more emphasis on that. During a funding period, we really evaluate the content of the projects.

My colleague Mr. Dutrisac is very strict about the evaluation and respecting the burn rate. That's why I came here; the situation is very real and the funds I'm requesting are necessary.

With regard to investigations, or the compliance of enforcement measures, we have done a lot of work. We did administrative reviews and investigations. We deal with cases where people are banned from lobbying for five years. We also deal with exemptions. Since 2008, we have completed more than 80 of these reviews. We have been proactive. So far, we have had the ability to find...

We are still stretching the budget for projects. I work on projects even if there aren't enough funds.

[The Chair, Conservative, Bob Zimmer]

Thank you, that is time.

Next for seven minutes is Mr. Erskine-Smith.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I'm wary of getting into trouble with the sub judice convention, but I do want to ask questions about the case. I would ask that we go in camera, which I understand would not actually contravene sub judice if we get into some of the details.