Thank you, Mr. Chair and honourable members of the committee, for inviting me to be here this morning. I'm accompanied by Martine Richard, who is our senior general counsel, and Lyne Robinson-Dalpé, who is our director of the very important advisory and compliance services.
I'm pleased to have an opportunity to present some initial.... Of course, I've been on the job for less than one month. Tomorrow will be my one-month anniversary so these are initial talks on the possible changes to the Conflict of Interest Act. It's important to note that I make these observations after having been in office for just under one month, as I just said; but I have been a keen observer of the ethics regime for a few decades.
The degree of interest expressed in the House since we all came back last week of course creates an interesting context within which to talk about the Conflict of Interest Act and whether some amendments should be considered. Like my predecessor, I do not think the act is broken. My view is that there is clearly room for improvement. From my point of view, it would be desirable to undertake a comprehensive review of the act, and I'll explain why.
We have just formally adopted a mission statement for the office that says that we exist to provide “independent, rigorous and consistent direction and advice to members”. That's the goal, to be “rigorous and consistent” in providing advice to members of Parliament but also to federal public office holders. There are 2,500 people as well who are appointed officials. That's our role, to provide advice, then to make “use of appropriate sanctions in order to ensure full compliance” and to investigate, where necessary. We advise, we investigate, and we impose sanctions, if and when appropriate, to ensure that the act is respected.
My goal as commissioner is an ambitious one. I want to create the conditions under which all public office holders can actually be in full compliance with the act at all times. The changes I speak of today are made with that objective in mind. There are two categories, in my view, of possible changes. The first category would be intended to clarify the obligations of ministers, parliamentary secretaries, ministerial staff, and Governor in Council appointees, and to provide more predictability in the administration of the act. That would be the first category of changes. The second category would be those changes that are intended to strengthen the enforcement of the act.
In the first category, one clear and obvious possibility would be to make an effort to harmonize the Conflict of Interest Act with the code that governs the conflict of interest for members of the House of Commons. Ministers and parliamentary secretaries are subject to both the act and the code, but there are definitions and terminology in both regimes that should be harmonized to avoid confusion. To be clear, I'm not speaking about harmonizing obligations. The act is more stringent, and this is important given the field of influence of ministers and parliamentary secretaries. For example, the act has post-employment and divestment requirements, while the code has none; and that's fine. However, there are areas that should be harmonized. For example, the code describes in some detail what amounts to furthering a private interest, while the act does not. The code also provides for a preliminary review to determine whether an inquiry is warranted, whereas the act does not. Those are differences that do not really have a logical explanation. That would be the first one.
The second one.... There are many more, but I've picked the most important possibilities from a strategic point of view. Of course, there was a list of 75 amendments that was tabled by my predecessor before this could be...back in 2013. I don't want to discuss technical amendments. I'd like to focus on the most important big ones. There's harmonizing the act and the code; and the second one would be to amend section 17 to clarify that controlled assets that are held indirectly are a no-no, as well as those held directly.
There are two types of assets defined under the act: controlled assets and exempt assets. Exempt assets are items that are for private use and those of a non-commercial character, like your residence, your personal effects, and so forth. These assets do not trigger compliance measures because they do not present the possibility for conflict of interest.
Controlled assets on the other hand are assets that could be directly or indirectly affected by government decisions. The act requires that controlled assets be divested by sale in an arm's-length transaction or by placing them in a blind trust. I agree with my predecessor that the act should be amended to expressly indicate whether controlled assets can be held through a private company. That's the second one.
Third, the committee should consider removing the exception for gifts given by friends that is included in subsection 11(2) of the act.
What people view as constituting a friend varies between cultures, ages and circumstances. It would be impossible to define “friend” for the purposes of the act in a way that would take into consideration all of the possible circumstances and that would survive the test of time. It evolves with time and over generations.
Moreover, if the definition of the word “friend” was eliminated, there would still be the acceptability test, and that is what counts in the act. Under subsection 11(1) of the act, when there is a gift “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”, it is not acceptable. Whether a gift is given by a friend or not is unimportant. According to the act, you cannot accept a gift if it can reasonably be seen to have been given to influence you. The converse is also true, if a gift given by a friend could not be seen to have been given to influence, you are not breaching the act.
Gifts from a friend or relative are not subject to an exception in the Conflict of Interest Code for Members of the House of Commons. I think that in this case as well, if this exception in the act were removed, the code for members of Parliament and the act would say the same thing.
Once again, in order to clarify and facilitate the continued observation of the act by members of Parliament, ministers and parliamentary secretaries, the rules on fundraising for ministers and parliamentary secretaries could be strengthened.
Currently, the act contains only one provision, section 16, that directly addresses participation in fundraising activities, and that provision does not distinguish between political and charitable fundraising.
It is clear that the potential for conflicts of interest is higher for ministers and parliamentary secretaries in relation to fundraising activities because of the influence they have in departments or, in the case of ministers, in cabinet. Stronger fundraising rules should be included in the act.
That ends the first category of amendments, namely, those to clarify the obligations. I have made four suggestions. I have others, but those are the most important, in my opinion.
I will now address the second category of amendments.
First, there should be sanctions because there aren't any currently.
I'd like to suggest there should be sanctions, or at least Parliament should look at the possibility of establishing sanctions, for substantive breaches of the act.
The role of the commissioner is first and foremost to provide accessible and clear advice as a means of prevention. Robert C. Clark, a former ethics commissioner from Alberta who's been in the business for decades, describes the role as being 90% priest and 10% policeman. I think this is true, and it should be true. However, one should not ignore the dissuasive effect that sanctions can have. They help to focus the mind. They also provide Canadians with the assurance that there are consequences for breaching the act that are more serious than what has been called “naming and shaming”. Sanctions could go some way to rebuilding the trust relationship with the Canadian public.
My office has had a look at the literature on the subject and we've found that there are no studies on the effectiveness of penalties in conflict of interest regimes. We haven't found anything. There are, however, several jurisdictions in Canada and elsewhere that provide for such penalties. For example, the majority of provincial ethics commissioners are already empowered to recommend that the legislature impose a penalty. That's the first one under the category of enforcement.
The second would be the power to issue confidentiality orders. As you know, the Conflict of Interest Act is intended to help build public confidence in our system of government and parliamentary institutions. One could argue that public airing of requests for examinations before the commissioner has had an opportunity to consider and report on them has the opposite effect. It can, in fact, contribute to a loss of trust. For many Canadians, an allegation that the public office holder has contravened the act is tantamount to a finding of a contravention. For reasons of fundamental justice, and in order to protect the integrity of an examination, the act imposes confidentiality upon us at the office. I suggest that the commissioner be given the power to also issue confidentiality orders to witnesses and that the act be amended to require complainants to maintain confidentiality until the commissioner has actually reported. That's another possible—probably controversial—amendment to facilitate the enforcement of the act.
I also believe that the first one I would make under this category would be to give the commissioner the power to make recommendations, because at this point in time there is no power in the statute for the commissioner to recommend anything.
Examination reports, of course, invariably lead to a better understanding of circumstances that can lead to a failure to comply. They serve as a reminder for public office holders of their obligations under the act. When I served as Public Sector Integrity Commissioner, I had the power to make recommendations, and I used it on several occasions. I believe that such authority...which doesn't have to be used each and every time, but if it is at least available if it makes sense, if it serves a purpose.... If I had the power to make recommendations, if and when appropriate, it would allow me to recommend changes that would further strengthen the regime and to craft a just remedy to address the situation at hand.
My last suggestion is the following: Training sessions should be mandatory for public office holders.
I am convinced that contraventions to the act often occur because of public office holders' lack of understanding of their obligations. Ignorance of the law, of course, is no excuse but mandatory training sessions could go some way towards mitigating the risk of an inadvertent breach.
These days, giving training isn't very demanding, since we have modern technology that enables us to provide a good overview of the act and the code in an hour or two. Members of Parliament could take this training initially, after their election or appointment to an office, and could retake it periodically, perhaps every year or two.
I look forward to having a dialogue with members of the committee about these possibilities or any other matter they might wish to discuss with me this morning.
Thank you very much for inviting me to appear.