Evidence of meeting #11 for Access to Information, Privacy and Ethics in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was rules.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Duff Conacher  Co-Founder, Democracy Watch
Chris MacDonald  Associate Professor, Ryerson University
Robert Czerny  Former President

3:15 p.m.

Co-Founder, Democracy Watch

Duff Conacher

Well, no, first of all, because they've only apologized for not recusing themselves at the final cabinet meeting. Neither of them has apologized for having their staff involved right through the entire process, participating in it, and—once we see the full communication record—maybe trying to influence it and rig it in favour of WE Charity.

Second, apologies, as in other areas of enforcement of law, go to what kind of sentence or penalty you pay; they don't excuse your behaviour. They just possibly mitigate what kind of penalty you might pay based on how quickly you apologize and whether you show remorse.

No, they're not adequate at all. That's why we need very high penalties put into the law so they'll have to pay a penalty no matter what.

3:20 p.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

I gather that stiffer monetary penalties might be a deterrent.

Earlier, in response to a question from the honourable member from the Conservative Party about the effects of this ethical breach by the Prime Minister and the Minister of Finance, you said the people at the top set the example. Many members are calling on Mr. Morneau and Mr. Trudeau to resign from their posts as finance minister and Prime Minister. At the very least, they are being asked to step down from their positions, without necessarily resigning as members of Parliament. Others should take over until the Conflict of Interest and Ethics Commissioner's final report comes out.

Do you think their resignations are necessary and relevant, or is that going too far?

3:20 p.m.

Conservative

The Chair Conservative Rachael Harder

You have 20 seconds.

3:20 p.m.

Co-Founder, Democracy Watch

Duff Conacher

No, I think it is relevant, but I prefer to wait until the investigation is over. The failure to recuse at the final cabinet meeting is not as serious a violation, if it is true that the public service actually recommended on its own that WE Charity be given the funding. However, participating in it and possibly influencing it are much more serious, possibly raising questions of breach of trust, which is why Democracy Watch has complained to the RCMP. I think those types of offences are the types of offences over which resignation is due.

3:20 p.m.

Conservative

The Chair Conservative Rachael Harder

Thank you, Mr. Conacher.

We will move to Mr. Green for the final question.

3:20 p.m.

NDP

Matthew Green NDP Hamilton Centre, ON

Thank you.

It was alluded to earlier that perhaps the minister forgot that he hadn't paid $40,000, which I think raises the question of competence, particularly in a finance minister. It's a pretty material oversight. However, we have so far admitted to the travel, which is section 12; the duty to disclose, which is section 31; and section 23, which is gifts.

Particularly with regard to the travel, with the private trip essentially, we don't know whether it was chartered or whether it was a public flight. We don't have those details yet. If that was the case, would that then cross the threshold into bribery? Would that then become material enough that we would have a breach of trust in a way that—and I should be reminded, because you brought this up earlier, that this is for the public service—a public servant who does not comply with the requirements of this code is subject to the appropriate disciplinary action, up to and including the termination of employment. This is what we set for the public sector, yet right from the top we have a slippery slope that could go from potential conflict of interest, which I think, given some of the admissions that have already been made publicly, there's no real need for an investigation into at this point; they've already admitted to this.

If it comes back that this was on private chartered flights, regardless of the disclosure or failure to recuse, and it comes back that all these other subsections have been violated, do you think this would then be the prime opportunity to talk about them having lost the public trust and, therefore, being required to step down?

Or—I'll go further, Madam Chair—do you think that part of the reforms should include that the act—and you'll note the act is very weak on enforcement—should forget about the $500 and have this actually as an outcome of the enforcement on this criteria?

3:20 p.m.

Conservative

The Chair Conservative Rachael Harder

You have 30 seconds.

3:20 p.m.

Co-Founder, Democracy Watch

Duff Conacher

Sure.

First of all, it does have to be shown whether Minister Morneau knew, or thought for sure, that he had paid for all of the costs. So that investigation needs to be done. To prove breach of trust, four of the five elements are already proven; he's an official, and so is the Prime Minister, taking part in a decision, in an official decision-making process, and breaching the standards of office in a serious way. The fifth one is whether it was done intentionally. That's where the investigation needs to look at the whole communication record.

But when you have that relationship with the charity, and you have been found guilty of violating the act before, as the Prime Minister and finance minister both have, and you're still taking part in directing your staff to take part in the decision-making, knowing that it's wrong, then I think that is evidence of wrongful and dishonest intent.

3:25 p.m.

Conservative

The Chair Conservative Rachael Harder

Mr. Conacher—

3:25 p.m.

Co-Founder, Democracy Watch

Duff Conacher

That's where the investigation has to go.

3:25 p.m.

Conservative

The Chair Conservative Rachael Harder

Thank you.

That concludes this portion of our committee meeting.

Mr. Conacher, thank you so much for giving your time today. Thank you for your patience at the beginning. Again, we sincerely apologize for the glitch.

We very much appreciate your taking this opportunity to share your thoughts with us. Thank you.

3:25 p.m.

Co-Founder, Democracy Watch

Duff Conacher

Thank you very much.

You can see, of course, as I mentioned, much more detail in the backgrounder I've prepared and submitted to the committee and in the news release that summarizes the key changes to end this system that really is a scandal. I hope the committee will work together to take a step, by introducing a bill in the fall, and close these loopholes.

3:25 p.m.

Conservative

The Chair Conservative Rachael Harder

Thank you, Mr. Conacher.

With that, we will suspend.

The committee will be called back for four o'clock to hear from our next witness.

4:14 p.m.

Conservative

The Chair Conservative Rachael Harder

I will call the meeting to order.

Mr. Czerny and Mr. MacDonald, we will just be one moment.

Yes, Madam Shanahan.

4:14 p.m.

Liberal

Brenda Shanahan Liberal Châteauguay—Lacolle, QC

Chair, I have a request to the clerk. The previous witness made a statement saying that Rachel Wernick had many connections to WE. I would just like to ask the clerk if we could follow up with the witness to get evidence of what he was alluding to.

Thank you.

4:15 p.m.

Conservative

The Chair Conservative Rachael Harder

Thank you.

Mr. MacDonald and Mr. Czerny, again, thank you so much for your patience. We appreciate you bearing with us. We will do our best to make good use of your time here today.

As you know, this committee has undertaken a study that pursuant to Standing Order 108(3)(h), the committee review the safeguards that are in place to avoid and prevent conflicts of interest in federal government procurement, contract granting, contribution and other expenditure policies.

You have been asked to come today and comment on this motion and answer any questions that those around this committee table would have for you.

In just a moment, I will give you each 10 minutes for your opening remarks. We will then proceed to questions from the members. Of course all parties around the table will have an opportunity to engage with you.

As you answer questions, I would just ask that you be mindful of time. The members are often trying to make it through as many questions as they possibly can, so efficiency is certainly of the essence.

With that said, I will have to interrupt you once the maximum time limit has been reached. I don't do so to be rude, but just to keep us on track, so please bear with me.

With that, Mr. MacDonald, I would invite you to take the floor with your opening remarks. You have 10 minutes.

August 10th, 2020 / 4:15 p.m.

Dr. Chris MacDonald Associate Professor, Ryerson University

Thank you, Madam Chair. I'd like to thank the members of the committee for this chance to speak to you today.

My goal today is to provide a scholarly point of view. In what follows, I'll lay out the key elements of conflict of interest and the reasons that conflict of interest is important.

First, let's look at how it is defined in Canada's Conflict of Interest Act.

Section 4 of the act says the following:

For the purposes of this Act, a public officer holder is in a conflict of interest when he or she exercises an official power, duty or function that provides an opportunity to further his or her private interests or those of his or her relatives or friends or to improperly further another person's private interests.

This definition from the act is flawed in one key way—namely, in its reference to exercising official power. Under this definition, the conflict of interest doesn't exist unless the official actually takes action in an improper way. This fails to correspond to the view of leading scholars in this area, according to whom conflict of interest is a kind of situation, not a kind of action.

According to this expert consensus, a conflict of interest exists as soon as the official finds herself in a certain kind of situation, namely one in which she has the opportunity to act in a way that puts biases into action. Such an official is already—blamelessly—in a conflict of interest, so a more suitable definition would be this: a conflict of interest is a situation in which a person has a private or personal interest sufficient to appear to influence the objective exercise of his or her official duties as, say, a public official, an employee or a professional.

According to this definition, all that's required for a conflict of interest is the existence of a certain kind of professional duty, one that is in tension with some personal interest that stands to affect judgment.

Next, why is conflict of interest considered a problem? Two reasons are generally recognized. First, conflict of interest is considered a problem because we worry that if the professional or official goes ahead and renders judgment or offers advice in spite of an unremediated conflict, her decision may fail to serve those she has sworn to serve. A judge, for instance, in adjudicating a case involving a family member, might impose a sentence that isn't a just one, or a manager might end up making a hiring decision that fails to serve the interests of the organization.

Perhaps more important is that where conflict of interest is not dealt with properly, there is the possibility that confidence in the decision-maker and indeed in the institution in which decision-making occurs will be shaken. Seen from this perspective, the problem with the conflicted judge is not just that she may make a bad decision but that citizens will lose faith in the judiciary. The problem with the conflicted manager is not merely that a bad hire may result but that stakeholders will lose faith in the company's hiring process.

This is in fact the moral crux of conflict of interest. Trust is imperilled if people even suspect that experts or office-holders, who are inherently difficult to monitor, might be in a position to improperly profit from their privileged status.

It's crucial to point out that, properly understood, conflict of interest itself is not and cannot be an accusation. Conflict of interest can arise entirely innocently, as when the judge finds that a close relative has been charged with a crime and brought into her court. The judge here has done nothing wrong, but she is clearly in a conflict of interest. She has a personal interest—namely, an interest in not seeing her relative go to jail—and that interest could be expected to interfere with her judgment. In this situation, the judge is not to be accused of conflict but simply needs it pointed out if she hasn't noticed it already. If she handles the situation badly—for instance, if she goes ahead and presides over the case—then she is rightly to be criticized for that.

What should the individual do when she finds herself in a conflict of interest? First, note that the fact that conflict of interest is not an accusation implies that the integrity of the individual is not a solution. When a true conflict of interest exists, it is insufficient for us to encourage the individual to take care and it's insufficient for her to insist on her own integrity. It's beside the point.

Most experts recommend three key steps in dealing appropriately with conflicts of interest: One, avoid them when you can; two, disclose conflicts to relevant individuals; and three, remove yourself from decision-making.

Each of these steps, however, poses difficulties. Avoidance, for example, is sometimes impossible, because sometimes professionals find themselves thrust into conflict of interest through no doing of their own. Disclosure too poses difficulties. Disclosure sometimes allows professionals to feel as though that's all they needed to do when additional steps were in fact needed. Further, disclosure may leave stakeholders wondering just what to do with the information that has been disclosed. Finally, removing oneself from decision-making is sometimes impossible due to relevant roles and responsibilities, and in some cases, recusal may not even be effective.

Imagine, for instance, the situation of a corporate board member who declares a conflict of interest on some matter and then steps out of the boardroom while a vote is taken. The other members of the board may well find their own decision-making influenced nonetheless by the disclosed interest of the colleague who has left the room. On the other hand, it might be said that while the practical value of disclosure is unclear, interested parties still have the right to know that an individual in whom they are placing their trust is in a conflict of interest.

Briefly, what does all of this imply for the Canadian Conflict of Interest Act? Time doesn't permit a full analysis, but let me make just a couple of points.

First, the act certainly has the ingredients to point public officials in the right direction with regard to conflict of interest. Under the act, public officials are properly obligated to arrange their own affairs in a manner that will prevent them from being in a conflict of interest. They are also obligated to abstain from decision-making regarding matters in which they have a private interest. Setting aside quibbles outlined above about how the act defines conflict of interest, the act does provide decent basic guidance to public officials seeking to satisfy the main requirements of ethical behaviour in the face of conflict. It exhorts officials to avoid conflict; to disclose conflicts, including in writing, to the commissioner, who then posts them on the commissioner's office website; and to recuse themselves from decisions regarding which they have a conflict.

However, one important implication of what I said above might be worth noting. One section of the act allows for exceptions to be made to some of its requirements “if the Commissioner is of the opinion that the contract or interest [involved] is unlikely to affect the exercise of the official powers, duties and functions”, but as I suggested above, whether the conflict will have an impact on decision-making is only half the point, and perhaps the smaller half at that. The key is really whether participation in a decision will reduce public confidence in the relevant decision-making process.

Finally, a key challenge with regard to conflict of interest really lies in what's not in the act—namely, the process by which government officials come to know the requirements of the act and hopefully to internalize its real meaning. There is clear consensus in the relevant scholarly fields that simply having a clear set of rules accomplishes relatively little. Individuals need to understand the values underpinning those rules. They need training. Reading a piece of legislation is not training. Training on ethical issues is a tricky thing, and unfortunately too often gets done in kind of a check-box manner. Ideally, training should be experiential. Individuals need to experience the relevant ethical challenges in order to both appreciate their seriousness on an emotional level and to practise—to develop the habit of—doing what the rules require.

One of my own research projects, IN.Lab, provides an example of what I mean. That project, which is online at www.interactives.ca, involves immersing individuals in realistic scenarios, simulated online, to allow them to engage in ethical decision-making in real time. Federal government training on conflict of interest doesn't need to look exactly like that, of course, but it illustrates what is possible in going beyond the typical annual sign-off approach to training on ethics and conflict of interest.

Thank you.

4:20 p.m.

Conservative

The Chair Conservative Rachael Harder

Thank you very much for your time.

Mr. Czerny, I will hand it over to you for 10 minutes.

4:20 p.m.

Robert Czerny Former President

Thank you very much.

Thank you for this opportunity to address you on important matters of proper relationships and conduct of work in Canada's national government.

My strong interest in federal government matters dates back nearly half a century. I was a public servant from 1973 to 1994. After that, much of my work as a management and communications consultant was for federal government clients, including Parliament itself. I have been very active at the Ethics Practitioners’ Association of Canada for the last 10 years, including five years as president. We have workplace and retired members from the public and private sectors, and our educational activities have been much appreciated by public servants wishing to reflect on the ethical dimensions of their work.

This background allows me to highlight various dimensions of ethical conduct of public servants in relation to Parliament, ministers and cabinet, but I'm not an expert in conflict of interest legislation, structures and procedures or in the details of the present case. Rather, I hope to elucidate the context of the work done by public servants in a professional and ethical manner.

I'll end with five recommendations.

First, trust is essential to a successful public service. The public must trust the government in order to have smooth, constructive relationships between government and society. Without trust, you can't have peace, order and good government any more than you can have an efficient commercial marketplace. This is why it is essential to keep private interests out of government decision-making and operations. Conflict of interest, whether real or merely potential or apparent, can destroy the public's trust in the government to act in its interest. Therefore, avoiding the appearance of conflict of interest is no less important than avoiding its actual occurrence.

Second, non-partisan public servants and elected representatives must collaborate in the work of government. There needs to be clarity about their complementary roles and operating principles. That relationship was articulated in a careful and inspiring manner in “A Strong Foundation”, a 1996 report on public service values and ethics. Besides stating values that you want to find in every workplace and pursuit, such as integrity and respect, it sets out what it means to be a professional in public service within Canada's democratic system.

Third, key mechanisms have grown in this area since that time. There are, for instance, mechanisms for accountability, conflict of interest of both politicians and public servants, and protecting individuals who disclose wrongdoing from reprisal. There is also a solid set of best practices to encourage ethical conduct in organizations. Some of these are the articulation of values and codes of conduct; training and dialogue; counselling and mediation services; and how to manage conflicts of interest in, for instance, small communities where officials frequently have to deal with friends and relations. Ethics officials throughout the federal government have a network through which they share insights on all of this. Our association gives them the opportunity to do the same and to learn from the experiences of those in other sectors.

Fourth, an organization can have a code of conduct, a statement of values, or both.

Codes of conduct spell out a bottom line of rules and norms. Compliance is the issue, and we ask if this or that behaviour passes or fails a norm, if it obeys or contravenes a rule, and what the sanctions or consequences are for transgressions.

Statements of values, on the other hand, articulate the aspirations of an organization. The right questions to ask for these are about how well this or that behaviour embodies our ideals, and how we could do better. This is the realm of learning, improvement and celebrating excellence.

To my mind, an organization needs both. Being serious about ethics requires having a bottom line of acceptability and sanctioning what falls below that line, but organizations must aim higher than mere legality; otherwise, they won't inspire initiative and excellence in their personnel.

Fifth, what happens in an organization reflects its culture. Culture exists at all levels and is constantly shaped by behaviour at all levels, but the key factor is leadership, the tone at the top. Culture cascades; the ethics of senior leaders is signalled by their actions even more than by their words, and it filters down throughout the organization.

Sixth, a key spot where the ethics rubber meets the road is in speaking up, in raising an issue that could meet with resistance and could make the speaker unpopular or worse. A teacher and researcher in the United States named Mary Gentile discovered that people often know what's right and want to do it, but feel awkward about speaking truth to power even if the culture accepts it. Her “giving voice to values” practice involves a person reflecting on their moral courage, developing personal scripts for speaking up, and then rehearsal and practice. Her approach has a worldwide following, including in some business schools and in other uptake in Canada. The capacity to speak truth to power is needed at every level from junior staff with supervisor problems to interaction between a minister and his or her deputy. By the way, I have nothing personally to gain in publicizing her work.

Seventh, speaking up is necessary for cleaning up. Secrecy allows things like bullying and fraud to continue in the dark. However, secrecy is entirely different from confidentiality. Confidentiality is an absolute necessity for public servants to be able to give honest advice to ministers and for ministers to seek it.

Now I will share my five recommendations. The first two are specific to conflict of interest.

Number one, lest conflict of interest ever be overlooked, it should be standard procedure for all cabinet meetings that the chair of the meeting begins by raising the issue of conflict and inviting recusal.

Number two, there could be a similar process at the departmental level. When helping the minister to prepare for a cabinet meeting, the deputy minister's written or personal briefing of the minister could include a reminder along the lines of “please assure yourself that you are not in conflict of interest regarding these agenda items”. This should be seen as part of the deputy's support to a minister.

Number three, requests to a department from a minister or cabinet can be as broad as “provide feasible options for achieving x”, but the request can also be as narrow as “conduct due diligence on choice y for achieving x”. In order to give the best possible advice, in order to speak truth to power and protect ministers from possible risks, the deputy's response to a narrower request could add any other pertinent intelligence that departmental staff can generate.

Number four, public servants sometimes feel inappropriately pressured when making decisions or providing information or analysis. Of course, they should respect their values and ethics code and resist pressures to contravene it. At the same time, other parties should also respect the code and not try to have public servants deviate from it. A statement should be added to the code addressed to anyone who deals with the public service to the effect that “it is a violation of this code to pressure a federal public servant to contravene it.” This is compatible with current instructions to ministers and ministerial staff.

Number five, an ethical culture is sustained by constant dialogue concerning “the good” as well as specific instruction on norms, values, structures and processes. Senior leaders should provide the tone from the top by supporting and participating in such dialogue and training constantly.

In conclusion, I believe that Canada's public service has the capacity to provide expert and ethical service. If that is what parliamentarians want, they should support it, they should insist on nothing less, and they should never ask for anything else.

4:30 p.m.

Conservative

The Chair Conservative Rachael Harder

Thank you, Mr. Czerny.

Moving on, we will go into our first round of questions. Each of the members has six minutes to engage with the witness of their choice.

Mr. Barrett, you are first up.

4:30 p.m.

Conservative

Michael Barrett Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON

Thanks very much. Thank you to both of the witnesses for joining us today.

I'll start with a question for Mr. Czerny.

You talked about the tone from the top and you said that leaders must demonstrate the highest ethical standard. You also talked about sanctioning actions that fall below the standards and that the standard should be higher than simply what is legally allowable. What do you believe appropriate sanctions should be for repeat offences or repeat violations of the act?

4:35 p.m.

Former President

Robert Czerny

Thank you.

I really cannot speak to the political side, because I really don't have experience in that, but on the public service side there are provisions in the employment conditions that say what is to happen when performance is below par. People have annual performance appraisals, for example. There is training and there can be reassignments and other sorts of things.

I think the clearest thing to say is that when there is consistent behaviour that is contrary to the norms, the organization has to look into whether something is a matter for forensic investigation and deal with it legally, but otherwise there are always constructive things that can be done to find ways to help people find the niche where they can perform well. It's part of the flexibility of everyday life in organizations.

4:35 p.m.

Conservative

Michael Barrett Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON

Okay. Thank you.

My next question is for Mr. MacDonald.

You talked about the need for experiential learning when it comes to having an understanding of ethics and having an ability to follow those, so I guess my question is if an individual was found to have broken ethics rules and received a written report from the adjudicating body one time and then a second time, would you consider that to be a sufficient experiential background so that one would not further contravene those rules?

4:35 p.m.

Associate Professor, Ryerson University

Dr. Chris MacDonald

As an educator, my standard answer is going to be that there's never enough training and education.

What you want is to provide people with a rich enough range of educational experiences. Sometimes, yes, the school of hard knocks and learning on the job is part of that, but what you ideally want is to have the training take place ahead of time and to have it give people a real enough sense of what these problems are like so that you go past either just reading an act or reading it in a textbook.

4:35 p.m.

Conservative

Michael Barrett Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON

Right.

With respect to the matter that led to this study, which is the awarding of the service agreement to the WE Charity by the Government of Canada, in testimony related to that at the finance committee, Prime Minister Trudeau laid a great emphasis on the distinction between a conflict of interest and the perception of a conflict of interest, an actual conflict versus the perception of one.

Gentlemen, one of you spoke to the harm that does to the trust that people have in institutions. Was that you, Mr. MacDonald?