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

1:50 p.m.

Conservative

The Chair Conservative Rachael Harder

I'm calling this meeting to order. As you are aware, committee members, we are here to discuss a motion that was passed at this committee on July 22:

That, pursuant to Standing Order 108(3)(h), the committee review the safeguards which are in place to avoid and prevent conflicts of interest in federal government procurement, contracting, granting, contribution and other expenditure policies.

As a part of this study, we are hearing from a variety of witnesses, including academics, ministers and others who happen to be experts on this topic.

Here with us today we have Mr. Duff Conacher, who is the co-founder of Democracy Watch.

Mr. Conacher, I'm going to give you 10 minutes for an opening statement, and then we're going to take questions from the members of this committee. You can go ahead.

1:50 p.m.

Duff Conacher Co-Founder, Democracy Watch

Thank you very much, Madam Chair.

Thank you, to all the members of the committee, for this opportunity to present to you on this important topic of government ethics and preventing conflicts of interest in government decisions with regard to spending.

1:50 p.m.

Conservative

The Chair Conservative Rachael Harder

Mr. Conacher, I'm so sorry to interrupt you. Do you mind just holding one moment? We seem to be having a problem with regard to translation here.

1:50 p.m.

Co-Founder, Democracy Watch

Duff Conacher

That's no problem at all.

1:50 p.m.

Conservative

The Chair Conservative Rachael Harder

I'm going to temporarily suspend until we can figure out the glitch that's taking place with regard to translation. Just one moment, please.

2:10 p.m.

Conservative

The Chair Conservative Rachael Harder

I'm calling the committee back to order.

Mr. Conacher, thank you so much for your patience with us. We sincerely apologize for the glitch.

I'm going to put you on the spot here. I'm wondering if you would be able to accommodate us by staying with us until 3:15 or 3:30 depending on your schedule.

2:10 p.m.

Co-Founder, Democracy Watch

Duff Conacher

Yes, that is fine.

2:10 p.m.

Conservative

The Chair Conservative Rachael Harder

That's perfect. Thank you so much.

Mr. Conacher, I'll let you restart your statement.

You have 10 minutes to open, and then we'll proceed with asking questions.

2:10 p.m.

Co-Founder, Democracy Watch

Duff Conacher

Thank you, again, Madam Chair, and all the members of the committee, for this opportunity to talk [Technical difficulty—Editor] conflicts of interest in government decisions.

Good afternoon.

I'll be speaking mostly in English during the meeting. Although I do need to practice my French, with all the technical jargon, I have an easier time in English. Feel free to ask me questions in French, if you prefer, and I will try to answer in French.

Again, thank you for the opportunity to address the committee on this important subject, conflicts of interest in government decision-making.

2:15 p.m.

Conservative

The Chair Conservative Rachael Harder

Mr. Conacher, please feel free to speak in whatever language you're most comfortable in.

We have interpreters, so we're good to go.

2:15 p.m.

Co-Founder, Democracy Watch

Duff Conacher

Thank you very much.

Democracy Watch is calling on the members of the committee today not only to recommend many changes to prevent conflicts of interest in government decisions with regard to spending but also to work together and actually draft and propose a bill, and to introduce it in the House of Commons this fall. Hopefully it will pass by the end of the year in this minority government.

You could easily work together to sponsor a bill that would lower the political donation and loan limit to $100, as in Quebec, to stop the unethical influence of big money in Canadian federal politics and to close loopholes that allow for secret, unethical lobbying, excessive government secrecy, spending without competitive bidding, and politicians and top government officials profiting from their decisions in secret. The bill must also strengthen enforcement by establishing an independent commission to appoint our democracy and good government watchdogs; requiring the watchdogs to audit everyone regularly and issue public rulings on all questionable situations instead of making secret rulings or ignoring complaints; allowing anyone to challenge the rulings of any watchdog in court; extending whistle-blower protection to everyone in federal politics, including political staff and the staff of political parties; and imposing high fines for ethics violations, including dishonesty.

Secret and unethical lobbying, excessive government secrecy, unethical big-money influence campaigns, and unethical decision-making and spending are all legal in federal politics and generally across the country. Canadians are more likely to get caught parking their car illegally than politicians are to get caught violating key ethics rules and spending rules. Incredibly, across the country, the penalties for illegally parking your car or vehicle are higher than are those for serious ethics violations by federal politicians and top government officials.

This dangerously undemocratic and corrupt system is the scandal, and it's not surprising that it encourages dishonest, unethical, secretive, unrepresentative and wasteful decisions by politicians and government officials. It must finally be cleaned up by closing all the loopholes, increasing transparency, strengthening political ethics and spending rules and their enforcement, and increasing penalties.

I have been before this committee about 15 times in the last 20 to 25 years. I'm not going to say anything very different from what I said those other 15 times, but I'm going to go through a few of the details, based on the summary I just gave, of the six key areas that need to be cleaned up in order to actually prevent conflicts of interest.

First of all, stop big money in politics. Stopping big money in politics is key because the favours organizations and their lobbyists can do for parties and candidates by funnelling and bundling donations unethically influence the decisions of cabinet ministers and other decision-makers in the federal government. Clinical testing by psychologists worldwide has shown that even small gifts and favours have influence and are the best way to actually influence someone's decisions. The only way to stop the unethical influence of big money in politics is to stop big-money donations and loans, as Quebec has, to ban gifts, including sponsored travel, which it is illegal for MPs to accept even from lobbyists as the lobbying commissioner ruled last year, and to restrict and require disclosure of all favours, including volunteer help on campaigns.

There are many other detailed changes that would democratize our political finance system. Democracy Watch issued a news release today, which has also been submitted to the committee with all the links, including one to the testing done by clinical psychologists showing that giving gifts and doing favours, including making donations, is the best way to influence someone's decision because it creates a sense of obligation to return the favour. That's why it's deeply unethical and has to be stopped through lowering the donation limit and banning gifts, including sponsored travel.

Stopping secret, unethical lobbying is the second of the six key areas.

The House ethics committee—this committee—recommended some of the changes back in 2012 to close secret lobbying loopholes, but not all of them. They need to be closed.

If even some of the loopholes that allow for secret lobbying had been closed years ago, everyone at WE Charity would have been prohibited from lobbying the Prime Minister's Office and the finance minister's office and department, because of their connections to those ministers. However, because the loopholes are open, not only did they not have to register the lobbying for this funding that they received, but it's also legal for them to be giving gifts, doing favours, campaigning and helping on political campaigns for any federal politician. Only registered lobbyists have to follow the lobbyists' ethics code. If you don't stop secret lobbying, you will not stop unethical lobbying because those who can still legally lobby in secret will also be able to lobby unethically.

Secret lobbying is only a part of the excessive federal government secrecy. The Trudeau Liberals promised that government information would be open by default and promised to apply the Access to Information Act to ministers' offices. Neither promise has been kept. Past governments have also not kept their open government promises.

There are many loopholes in the Access to Information Act. It really should be called “the guide to keeping information secret act” because that's really what it is—it's so full of loopholes. Those loopholes must be closed to end the culture of excessive secrecy that often hides wrongdoing and wrongdoers in the federal government.

The fourth area is to stop unethical decision-making. It is legal under the Conflict of Interest Act for ministers and top government officials to profit from their decisions. As long as the decision applies generally, which 99% of their decisions do, they are not required to step aside when they have a conflict of interest. They are actually allowed to have a financial conflict of interest and still participate in making the decision. This was proven most recently by finance minister Bill Morneau, who introduced a bill that would have helped his own family's pension management company make more money. Since he was a shareholder at the time, Mr. Morneau would have made more money. The Ethics Commissioner ruled that this was all fine because of this giant loophole in the Conflict of Interest Act. That loophole also exists in the MPs' ethics code and in the Senate ethics code.

The Conflict of Interest Act is a key law that protects the public's money and protects our democracy. The Supreme Court of Canada ruled in 1996 that if it is not strictly and strongly enforced, along with other laws like the Criminal Code anti-bribery provisions, we do not have a democracy. This key law does not apply 99% of the time to decisions made by the most powerful people in the federal government. This loophole must be closed and everyone in federal politics must be prohibited from participating in any decision-making process when they have even the appearance of a conflict of interest.

As well, a rule requiring honesty should be added to the federal ethics law and to the codes, to ensure that politicians and government officials are penalized if they mislead voters about anything, including their own wrongdoing.

Unbelievably, the rules and codes that cabinet ministers have imposed on the lowest level of government employees in the federal government, who have very little decision-making power at all, prohibit those employees from participating in all decisions if they have even a potential or apparent conflict of interest, even when the decision applies generally. Those lower-level employees are also required to be honest and to provide honest advice. They can be suspended or fined if they break those rules.

This is a truly perverse system, where the lowest level, least powerful people in the federal government and in federal politics are the ones who actually have the highest ethics standards and the highest penalties.

As well, so-called blind trusts must be banned, as was recommended by the 1984 Starr-Sharp report, as well as the 1987 Parker commission. The person who sets up a trust knows what they put in it, so it's not a blind trust. It's a complete sham. It's a facade. Instead, politicians and government officials should be required to sell their investments while in office, as again the Parker commission recommended.

Conflict of interest screens should also be banned because they are smokescreens that hide whether someone is actually stepping aside from decisions when they have a conflict of interest.

Then the last two areas—areas five and six—are, first, to stop questionable sole-source spending. There are far too many loopholes that allow for sole-source spending. A way to check them is to close some of them, but also to require, if it is significant spending, that the institution doing the spending check with the Auditor General and do a little compliance check before it actually initiates the spending process. Then the Auditor General could say, “No, you can't do that. You have to have a competitive bid or I'm going to rule when I audit it five years from now and find that you've broken all the rules.”

Finally, we need to strengthen enforcement. The watchdogs are hand-picked by the cabinet ministers and top government officials they watch over. They usually don't have the power to impose penalties. They're allowed to do secret rulings, and, as a result, it's not surprising that they have acted like lapdogs, letting many people off the hook. Everyone needs to be able to challenge their rulings in court. They need to be chosen by an independent commission. They must be required to conduct audits and issue public rulings on every questionable situation, and they must be empowered to impose high fines for violations of these key good government rules.

Finally, whistle-blower protection, as I mentioned, must be extended to everyone who works as political staff or for political parties. A House of Commons committee unanimously recommended in June 2017 several key changes to strengthen the whistle-blower protection system. The government ignored those recommendations, as they ignored this committee's recommendations to strengthen the Access to Information Act, and as the Harper Conservative government, back in 2012, ignored the recommendations made by this committee to close many of the secret lobbying loopholes.

I welcome your questions about any of these six areas. All of these changes are needed to close the loopholes and to stop conflicts of interest in government spending decisions. I hope committee members will work together to draft a bill, propose it in the House and, in this minority government, recruit your colleagues to pass it this fall and finally clean up this undemocratic and corrupt—

2:25 p.m.

Conservative

The Chair Conservative Rachael Harder

Mr. Conacher, thank you very much.

Moving into our first round of questions, we have Mr. Barrett for six minutes.

Mr. Barrett, please go ahead.

2:25 p.m.

Conservative

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

Thank you, Mr. Conacher, for your comments and insights today.

My first question is with respect to adding input to process for government decisions such as unsolicited proposals. Should these count as lobbying? Secondly, during your tenure, how has your organization looked at or spoken about charities with respect to lobbying?

2:25 p.m.

Co-Founder, Democracy Watch

Duff Conacher

Well, to answer the second part first, there are two sets of rules, one for hired-gun consultant lobbyists and the other for organization lobbyists, which is anything that is incorporated in any way, including any charity. The loopholes have to be closed for everyone and every type of organization. If you leave any of them open, they'll be exploited. Essentially, if you are communicating with regard to decisions, you should have to register, whether you're paid or unpaid, no matter how much time you're spending.

The Internet is set up for this. The registry is very easy to fill out to track your lobbying. Right now, in terms of monthly communications, only oral pre-arranged communications are required to be registered in those monthly records. That's the huge hole. If you're not paid for your lobbying, or if you're at an organization and not spending 20%, then you do not have to register. It's also very easy to arrange a contract or do your lobbying and space it out, month to month, so that you don't cross those thresholds, or to do a contract saying you'll be paid for strategic advice, but not paid for your lobbying, and then it's actually legal to lobby in secret.

Therefore, close all these loopholes. Not one minute of secret lobbying should be allowed. It's very easy to register and everyone should be required to register all the time.

2:25 p.m.

Conservative

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

Thank you.

With respect to the awarding of the CSSG to the WE Charity by the Liberal government, you've stated that key rules protecting democracy are being violated when it comes to this contract.

Can you expand on that? What key rules specifically are you referring to?

2:25 p.m.

Co-Founder, Democracy Watch

Duff Conacher

My position is.... This is my position as a co-founder of Democracy Watch, but I'm also doing my Ph.D. in law on this specific topic of preventing conflicts of interest, so with my legal training, my position is that the Prime Minister and finance minister already admitted they violated the Conflict of Interest Act when they said they were at the final cabinet meeting that approved the contract.

I also believe that they violated the act in a separate way by participating in the process before that cabinet meeting or by having their staff do so. It has been confirmed that both staff of the Prime Minister and staff of the finance minister participated in the entire process. We don't know all the details yet. The disclosure of documents that has happened over the weekend will provide some of the clues, but we need to see the entire communication record to really know and try to get close to the truth. We won't see recordings of phone calls, likely, but we should at least know who called whom and when for everyone involved in the process, all the emails, all the texts. I believe there are those two violations.

Then if any staff or the Prime Minister or the finance minister themselves, or any minister, tried to influence that process, not just participate in it but in any way push it in the direction of WE Charity receiving the funding, then that would be a third violation, a violation of section 9, which makes it illegal to try to influence a decision-making process when you're furthering someone's private interests—your own, your family's, your friend's or your associate's—or improperly furthering a charity's interests in this case because of your connections to it.

2:30 p.m.

Conservative

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

With respect to section 9, the public service, the staff around the minister and the Prime Minister, were clearly aware of Prime Minister Trudeau's relationship with WE Charity.

Do you believe that, given this awareness, both parties should have dropped using the WE organization as the administrator of this program?

2:30 p.m.

Co-Founder, Democracy Watch

Duff Conacher

It would have to be a decision made entirely by the public service without any participation at all by any ministers' staff, because first of all, according to Treasury Board's own policy and the federal government's own statement, ministerial staff act on behalf of ministers. You can't use your staff person as a front and have them do the things you're not allowed to do and then claim that you didn't know.

Finance Minister Morneau has already admitted that he did direct his staff to participate. When the chief of staff of the PMO is involved, as Katie Telford testified that she was and others were, they're acting on behalf of the ministers, so the minister is the one who's found guilty because their staff acts on their behalf.

Of course, there is this concept of plausible deniability. Often ministers try to create that situation, and the staff person is the one who falls on their sword and resigns, and they claim they never knew. In this case, we know that they knew.

2:30 p.m.

Conservative

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

I have just a couple of seconds left, so it's a quick question.

What grade would you give Prime Minister Justin Trudeau for his adherence to ethics laws since being elected in 2015?

2:30 p.m.

Co-Founder, Democracy Watch

Duff Conacher

On ethics laws and also in terms of breaking open government promises, the Liberals rate an F in both cases, for sure. It's been a complete failure. He sent a great letter to ministers with great talk in terms of saying that they have to meet the highest ethical standards that will bear the “closest public scrutiny”. That was in November 2015, but Prime Minister Trudeau has not walked his own talk ever since.

2:30 p.m.

Conservative

The Chair Conservative Rachael Harder

Thank you, Mr. Conacher.

Madam Shanahan, you have six minutes.

2:30 p.m.

Liberal

Brenda Shanahan Liberal Châteauguay—Lacolle, QC

Thank you very much, Chair.

Thank you, Mr. Conacher, for being here. I've had the occasion to hear your testimony at other committees as well, including government operations and so on, so I'm well aware of your dedication and your many years of work in this area.

I think you're aware of the motion that we have before us today and what we're looking at. I'll just read out the first paragraph, which states:

That, pursuant to Standing Order...108(3)(h), the Committee review the safeguards which are in place to avoid and prevent conflicts of interest in federal government procurement, contracting, granting, contribution and other expenditure policies.

On that, I want to highlight the fact, as you mentioned in your opening remarks, that we're actually due for a statutory review of the Conflict of Interest Act. I think in that regard, since we are here, the kinds of remarks that you're bringing to us today are very pertinent.

For those who are watching and listening to us, briefly, with regard to the Conflict of Interest Act, the Conflict of Interest and Ethics Commissioner has a dual mandate. He is responsible for both public office holders and members of the House of Commons. In that mandate, for public office holders there are the following four points: providing confidential advice to the Prime Minister; providing confidential advice to individual public office holders; examining and reporting on possible contraventions of the act; and administering the disclosure regime.

Just to summarize, any parliamentarian can request an investigation or the commissioner himself can conduct such an examination; he or she reports such investigations to the Prime Minister; and the reports are made public, although particular types of information must be kept confidential.

This comes to my question to you. What are your top three recommendations to this committee to improve the Conflict of Interest Act? Also, what elements of the act are working, as far as you're concerned?

2:35 p.m.

Co-Founder, Democracy Watch

Duff Conacher

I'd say, unfortunately, not very much at all is working, although there was one improvement made by the new Ethics Commissioner, Mario Dion. The old Ethics Commissioner, whom you will be hearing from later today, Mary Dawson, had ruled, although it doesn't say this in the Conflict of Interest Act, that private interests are only financial interests, that they do not include political interests or social interests. There is nothing in the act to suggest that at all. In fact, the MP's code says that private interests are only financial interests, which points to the fact that if something wasn't included in the Conflict of Interest Act then Parliament didn't intend to limit it.

Thankfully, Mario Dion, with his ruling on the SNC-Lavalin scandal last summer, reversed that and said that interests include political, social and financial interests and there's a very broad definition. So that's a step forward but it's kind of an arbitrary step forward that could be reversed by the next commissioner. The definition of private interests, specifically, should be put in the act. Other than that, I don't think much is working.

You're going to hear from Mary Dawson. She let 85% of the people she reviewed off the hook, with secret rulings most of the time. The rulings do not have to be made public if she decides to drop an investigation, as she decided, for example, to drop the investigation into Nigel Wright and his financial conflicts of interest. We learned about that only because a reporter chased after her for a year until she finally admitted that she had just dropped that investigation. There are zero penalties for violating the key rules. Even for violating the administrative rules of disclosing your assets and liabilities accurately and on time, the maximum penalty is $500, which is not much incentive to a cabinet minister who is making more than $200,000 and a Prime Minister making more than $300,000.

I don't see much working at all. There is no statutory five-year review of the act required, but it should happen. A review of the Lobbying Act by this committee is now three years overdue. Both acts need to be reviewed together, and both need to be strengthened in the ways that I've outlined. You can see all the details in the—

2:35 p.m.

Liberal

Brenda Shanahan Liberal Châteauguay—Lacolle, QC

Thank you, Mr. Conacher. I just want to check my time.

Chair, how much time do I have?

2:35 p.m.

Conservative

The Chair Conservative Rachael Harder

You have one minute left.