Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 11 - Evidence, October 4, 2006
OTTAWA, Wednesday, October 4, 2006
The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill C-2, providing for conflict of interest rules, restrictions on election financing and measures respecting administrative transparency, oversight and accountability, met this day at 2:35 p.m. to give consideration to the bill.
Senator Donald H. Oliver (Chairman) in the chair.
[English]
The Chairman: Honourable senators, this is our twenty-fourth meeting in relation to Bill C-2, providing for conflict of interest rules, restrictions on election financing and measures respecting administrative transparency, oversight and accountability. The bill is more commonly known as the federal accountability act.
As senators, our witnesses and members of the public both here in the room and across Canada know, this bill reflects a central portion of the new government's agenda and is one of the most significant pieces of legislation brought before Parliament in recent years. The committee is giving the bill the extensive, careful and detailed study that it deserves. During over 75 hours of meetings, we have heard from more than 120 witnesses. They have discussed topics ranging from accountability, ethics and conflict of interest, parliamentary privilege, political financing, the parliamentary budget office, access to information, privacy, whistle-blowing, audit powers, and procurement.
This week we will focus on the question of lobbying. To begin this session, I am pleased to welcome Michael Nelson, the Registrar of Lobbyists. Mr. Nelson was appointed on a full-time basis in September of 2005. His office is responsible for establishing and maintaining the registry under the Lobbyists Registration Act, which includes the information on all registered lobbyists and their activities required under the act.
The Registrar also issues advisory opinions and interpretation bulletins regarding the act, and has responsibility for the development of the Lobbyists' Code of Conduct and for overseeing compliance with the code of conduct.
Mr. Nelson is joined by Karen Shepherd, Director of Investigations, Pierre Ricard-Desjardins, Director of Operations, and Bruce Bergen, legal counsel.
The committee welcomes you. After your presentation, we will open the floor for questions and answers.
[Translation]
Michael Nelson, Registrar of Lobbyists, Office of the Registrar of Lobbyists: Mr. Chairman, thank you for this opportunity to appear before the committee on Bill C-2. I have provided the Clerk of the Committee with a copy of a presentation I made recently to the Standing Committee of the House of Commons on Access to Information, Privacy and Ethics. I am providing you with this presentation by way of background on the operation of the current legislation and I of course would be pleased to answer any questions arising from it.
Bill C-2 contains a number of changes to the current Lobbyists Registration Act. In my opening remarks I want to speak to three that I see as particularly helpful.
[English]
The first is the establishment of a fully independent commissioner of lobbying. As senators may know, as Registrar I report to Parliament with respect to the Lobbyists Registration Act, yet I am a public servant with an accountability relationship to a minister, currently the President of the Treasury Board. I have been fortunate since I assumed these duties in 2004 — at which time I assumed them on a part-time basis, and then on a full-time basis in 2005 — to have worked with ministers who have respected the need for independence. I have never met with any of the three ministers through whom I have reported while I have been Registrar, nor have they or their staff ever inquired as to the status of registration or investigations that I have underway. They adopted this approach because from time to time the responsibilities of my office involve matters that are acutely political. Parliament and Canadians will be able to have more confidence in the actions and decisions of a commissioner of lobbing if he or she is, and is seen to be, totally beyond the influence of the government of the day. I strongly support the addition of an explicit mandate to develop and implement educational programs.
Mr. Chairman, unregistered lobbying would be virtually eliminated if public office- holders refused to communicate with lobbyists they could not verify in the public registry as being registered properly. I am not suggesting the public office holders take on my mandate of enforcing the act, nor am I suggesting that the business of government grind to a halt each time there is doubt about an individual's registration status. There can be legitimate reasons for a name not appearing on the registry. However, there is tremendous leverage to be gained for the commissioner's office by ensuring that public office holders are aware of registration and conduct obligations of lobbyists, and that lobbyists and those who hire them understand the law so they can comply with it.
[Translation]
The third change I see as very helpful is the expansion of the investigation mandate. The current Lobbyists Registration Act provides substantial powers to the Registrar when carrying out an investigation under the Lobbyists' Code of Conduct. However, these powers are not available when the Registrar is reviewing allegations that the Act itself has been breached.
These powers are also not available during the fact-gathering stages that precede a Lobbyists' Code of Conduct investigation. The result is that the Registrar must rely on the voluntary cooperation of lobbyists, their clients and public office holders. This is insufficient, and enforcement suffers.
Bill C-2 provides for a full array of investigative powers for the Registrar in any type of investigation. Mr. Chairman, I will end my remarks here. I look forward to being as helpful as possible to this committee in your important work.
[English]
The Chairman: Thank you for that overview. One of the reasons that Bill C-2 is before us is the report of Justice John Gomery on February 1, 2006, and the Commission of Inquiry into the Sponsorship Program and Advertising Activities, the Gomery commission. In his report he made several recommendations. I would like to read to one of those recommendations to you and ask you to comment on it, in view of your opening remarks.
In terms of ensuring compliance with the legislation, the Gomery commission specifically recommended the independence of the Registrar of Lobbyists. It recommended that he or she report directly to Parliament rather than through a cabinet minister and that he or she be provided with sufficient resources to publicize and enforce the requirements of the Lobbyists Registration Act, including investigation and prosecution by its own personnel.
Has Bill C-2 captured that recommendation and, if not, what are the deficiencies and what are your views on that recommendation vis-a-vis Bill C-2?
Mr. Nelson: Mr. Chairman, in my view there are two parts to that recommendation: The first part is the independence that has been captured by the fact that the commissioner of lobbying tables reports directly to Parliament and not through a minister.
The Chairman: Certainly, that is an improvement, such as the one you outlined in your opening remarks.
Mr. Nelson: Yes, it is. I have been very fortunate because none of the ministers through whom I have reported have ever delayed a report, sent it back or asked me questions about it. However, to the public it is important that everything from the beginning of an investigation — the power to independently decide it is time to do an investigation — to the tabling of the report be independent of any real or perceived influence of the government of the day.
The second part is with respect to resources.
The Chairman: The Gomery report says: ``...sufficient resources to publicize and enforce the requirements...''
Mr. Nelson: I will break this second part into two parts as well. There are the resources to do what I need to do now under the existing legislation and the resources to do what I need to do under Bill C-2. I was an assistant deputy minister when I was given the position of registrar, when there were virtually no resources allocated to the function. All departments have tabled their respective Report on Plans and Priorities. The RPP for my department asks, for the first time, for an amount of about $3.5 million, for 20 staff and to carry out my current functions. I am being cash managed by Industry Canada, for which I am grateful because it is the reason that I have been able to build a team and an organization.
The Chairman: Is the $3.5 million threshold within your range?
Mr. Nelson: It will be enough to allow me to carry out my current duties. I understand that an amount of money has been set aside for the implementation of measures laid out in Bill C-2. Once Bill C-2 is passed and enacted and the requirements of the commissioner of lobbyists are set, then the commissioner would make a Treasury Board submission detailing exactly what portion of that would be required. Under existing law, the main resource drivers would be the upgrades to our registry for the following: contact database; education mandates, so one can do the ever- important outreach; and additional staff to investigate and assist lobbyists in their compliance with the act. I hope that the easier it is for people to use the registry, the more they will use it.
The Chairman: Thank you.
Senator Campbell: In my questions, I will refer to a document that Mr. Giorno will talk to the committee about later, although I do not expect him to read the entire paper. Some areas of the document deal specifically with the commissioner of lobbying and the part about autonomy is interesting. I concur with you that autonomy is probably the key ingredient under Bill C-2. Mr. Giorno would like to see some things changed in the proposed legislation. The first area is on page 74 of the bill where proposed subsection 9(3.1) under clause 72 states that the commissioner is to determine the time, manner and form of clarifications and corrections.
Mr. Giorno has three reasons for wanting a change to that proposed subsection. First, under that wording, cabinet would not be in a position to understand what type of clarification would be required. Cabinet would not understand the circumstance. Second, it is consistent with the policy intent of having the commissioner as an independent member of Parliament, and that this is seen as an unnecessary infringement. Third, the current wording is an oversight. When the amendment was moved, legal counsel told the members that it was to allow the commissioner to put a time limit on the period during which he would receive information, otherwise, he would ask for information and the party asked could take forever to provide it. It is to enhance his or her capacity to investigate. Do you agree with that, Mr. Nelson?
Mr. Nelson: I like that idea. I have had a chance to look at Mr. Giorno's paper, and I would not scoop him either by reading it aloud.
Senator Campbell: That is why I gave credit. I did not want to be caught in any copyright laws.
Mr. Nelson: I will follow your lead and not scoop him too much except to give credit where it is due for some well- thought-out ideas. One of the wisdoms of the current act, which is maintained in the amendments to Bill C-2, is that it allows, with some discretion, the Registrar of Lobbyists to work with reality which is highly complicated. Bill C-2 makes us realize that it is a very complicated world in terms of the arrangements that lobbyists have with their clients and the requirements of enforcing the act. Anything that gives more discretion to the commissioner of lobbying to adjust in real time what is needed to properly enforce the act is a good idea. It seems more like an oversight because the intent seemed to be that the commissioner would do that. To have to go through regulation to sort that out seems extreme in my view.
Senator Campbell: The second area for change is the statement, ``Senior public office-holders should be required to respond to the commissioner's inquires.'' Mr. Giorno says that Bill C-2 takes a different approach. Without comparing the two approaches, I will focus on an apparent oversight, wherein a senior public office-holder's refusal to respond would not be an offence; a senior public office-holder responding incompletely would not be an offence; and a senior public office-holder responding inaccurately would not, unless wilful, be an offence. In contrast, inaccurate filing by a lobbyist or a CEO, even if inadvertent, is an offence. Mr. Giorno says that it seems to be an oversight. Members of the House committee were told that senior public office-holders would be required to respond to the commissioner. Could you comment?
Mr. Nelson: I am not so sure about that one. I do not disagree with his conclusion that it is not an offence, because it is not. Having been a senior public office-holder, the notion that my name be put in front of Parliament as having refused to cooperate on something that Parliament had put in place, is not a concept that I would embrace. The very notion of shame is a powerful one in this case, for public office-holders. There is also the idea that perhaps it could be posted on a website. I think there is power in shame, to a degree. The other idea is that sending anything off to the RCMP — and I would say this for some of the other comments in another part of Mr. Giorno's paper — may delay anything coming to light for longer than is useful. I am wary of anything new, where you would send something off to the RCMP, for example, before I would have the opportunity to tell Parliament about it or put it on a website.
Senator Campbell: Maybe I misunderstood this recommendation. What I took from this was that it would require those people to respond and what took place after that, of course, would be back within your powers as a commissioner. It was not so much that then you have to send it to the RCMP or it becomes public, it was more, you ask me for something, and I say ``no.'' What happens? That is the problem.
Mr. Nelson: Can I ask my lawyer, my legal adviser, who is much wiser than I am.
Senator Campbell: You are lawyering up way too soon.
Mr. Nelson: He will segue back to me.
Bruce Bergen, Legal Counsel, Office of the Registrar of Lobbyists: I will comment on that particular proposed section 9(1). It gives the commissioner the discretion to send, to a present or former public office-holder, the information contained in the contacts registry. The commissioner may not wish to send all information to all public office-holders; there will be quite a tremendous volume. Once that is done, the public office-holder is required to confirm with the commissioner that it is accurate and complete. While that is not, I do not think, necessarily a criminal sanction, there is the ability of the commissioner to report after that. As Mr. Nelson said, that is regarded as a sanction, in this proposed legislation, for purposes of the code of conduct and, in the same vein, for purposes of non-compliance with this requirement to confirm or deny information in the contacts registry.
Senator Campbell: So, you are comfortable with that proposed section.
Mr. Nelson: I am. Another thing that gives me comfort is that while it may seem far away, the clock is still ticking, as I understand, on the provision in the current Lobbyists Registration Act, for a five-year review of the act. That clock started ticking June 20, 2005. If we look at this proposed legislation coming into some of the lobbying portions, for example, coming into force in the next year or so, 2007 perhaps, we are three years from a review.
I think part of what the commissioner needs to do, with the type of changes that have been made, is pay very careful attention to points exactly as Mr. Giorno states them and as you question them. Is this working or not, or do we need more of a hammer? I guess that is where I would put that one. Work with shame for the moment, and if it does not work, then report back to Parliament to say I need something more.
Senator Stratton: Could you take us briefly through the process of how you start, why you start an investigation and take us briefly through that process? As you go through, for everyone's sake, point out where you think there is room for improvement.
Mr. Nelson: Yes, I can do that and I will ask Ms. Shepherd to take us quickly through the annex that is in our annual report.
We have two types of investigations. The act gives me, as the Registrar, the ability to carry out an investigation under the code of conduct. Before that happens, you have some fact gathering to do. If it turns out to be an infraction under the act, then off it goes to the RCMP. If it is a breach of the Lobbyists' Code of Conduct, then various powers come to me and I conduct an investigation. I have 10 such investigations underway right now, four of which I expect to be reporting to Parliament.
Ms. Shepherd could take us, if that is suitable, through the process. It is in the annex to both of our annual reports, on the code of conduct and the act, which were just tabled recently in both Houses of Parliament.
Karen Shepherd, Director of Investigations, Office of the Registrar of Lobbyists: The first part of the investigation we call an administrative review or a fact-finding stage. At that point, we are gathering, analyzing and verifying information. The complaint or administrative review starts because we receive a complaint. Anyone is free to file a complaint; the media, public office-holders, members of the Senate, or we might initiate an administrative review because of something brought to our attention, through either media articles or other means.
Once we have opened up an administrative review, we will look at our internal sources, registry and anything we may have on hand, in terms of the person alleged of not complying with the Lobbyists Registration Act. We look at external sources such as, Hansard, media, departmental documents. We conduct interviews with the public office- holder, the person alleged to have performed the lobbying, the client, and we get back to the complainant to see if he or she has any additional information.
Once we have all of that, we summarize it and a report is prepared. One of four things may happen. We have gone as far as we can go, because at this stage there are no powers to compel anyone to give information. In this case, we might close the file because of insufficient information to reach a decision. In the second case, there could be a decision that, based on everything we have seen, there was no reasonable grounds to believe that a breach of the act or of the code had occurred. Third, based on the information a decision is made that there are reasonable grounds to believe that an investigation should be initiated. It is within the two-year prescription, so a recommendation would then go into the Registrar, recommending that it be referred to the RCMP for further consideration. Fourth, in this case, we establish that there is indeed sufficient information to launch an investigation under the code of conduct. If the Registrar determines there is enough evidence to initiate a code of conduct investigation the investigation would look at additional information that is required. We would interview witnesses, submit formal requests for information, including subpoenas and obtain the necessary documents needed to reach a conclusion. We then prepare and complete an investigative report and submit it to the Registrar. The act requires that the individual under examination be presented with a reasonable opportunity to present his or her views in terms of the case. After that, the Registrar makes a final determination and a report is tabled in Parliament.
Mr. Nelson: Thank you, Ms. Shepherd. The single most important improvement to that whole process is that when we are in that pre-investigative stage of fact gathering, I have no ability to compel anything. As Senator Campbell suggested earlier, if I ask a client, the client of a lobbyist or the lobbyist themselves for information, I have no way to compel any of the information. If I say, ``I would like a copy of the contract that you used so that I can see whether you undertook to set up meetings,'' they might say, and they have said, ``No thank you. I will not do that.''
The single, most important improvement that Bill C-2 brings to that process is that it expands the investigative powers that are currently available for a code of conduct investigation to any type of investigation. Instead of going through a volunteer process as we triangulate — that is, we talk to the client, the public officeholder and the lobbyist — we can compel documents, subpoena people, and so on. If I need to hand something over to the RCMP, they will then have a reasonable case to go on instead of saying, ``We could use a little more proof. Can you go back, please, and try to get more information?'' Well, no, I cannot. Thank you for that question. It is an important issue.
Senator Stratton: If you turn documentation over to the RCMP and there is evidence there but not sufficient evidence, can the RCMP not ask that lobbyist for that information?
Mr. Nelson: The RCMP has their own rules as to at what point they can ask a judge to issue a subpoena. The other part is convincing them that it is important enough, because they have many other matters on their minds. There is also the two-year limitation currently in the act, which is extended — and this change is a big improvement under Bill C-2 — by which time, if I have gone through all my attempts to obtain information and then hand something to them, the clock is ticking seriously on a two-year limitation.
Senator Zimmer: Thank you for your presentation. My question concerns the act itself and empirical evidence. Is it correct that, to date, no charges have been laid for contraventions of the Lobbyists Registration Act?
Mr. Nelson: You are correct, senator.
Senator Zimmer: In light of this fact, it has been suggested that current legislation cannot be enforced adequately. Are you aware of the experiences in any other countries in trying to enforce the legislation?
Mr. Nelson: I cannot be factual today. I can send the committee as much information as I have on the enforcement part of that. I can tell you about it within Canada, though. Other jurisdictions in Canada, as you know, have this type of legislation. Five provinces have this legislation: British Columbia, Ontario, Nova Scotia, Quebec and Newfoundland and Labrador, which is most recent. The only jurisdiction — and it only happened this year — which has ever managed to convict anyone for anything under any of these acts is Quebec. My colleague André Coté, the Lobbyists Commissioner, announced earlier this year that he had convicted a lobbyist under the Quebec act.
Some of the commentary around the difficulty or the inabilities of enforcing the act had to do with pre-2003 amendments, where ``communication'' was defined as `` communication with a public office-holder.'' The way the RCMP and those trying to enforce the act thought at the time was that the standard of proof required to convict someone under that portion of the act, fine them or give them a jail term was the proof standard.
The Chairman: It is the criminal standard of proof beyond a reasonable doubt, is it not?
Mr. Nelson: Yes, and proving that someone had the intent to influence was difficult — so much so that it was taken out of the act. The act has its own challenges, but it certainly makes it easier to prove that, ``You did communicate with him. There is an email here. We are not talking about why you did it, or your intent. It is here.''
There has been a lot of improvement with the 2003 act that was implemented in 2005 along those lines.
Senator Zimmer: I understand your office is investigating some breaches of the Lobbyists' Code of Conduct for some time. Can you comment on the status of these investigations and the report that might be forthcoming to Parliament?
Mr. Nelson: There are 10; I initiated 8. As senators might know, in the 10 or so years that the code of conduct has been part of the Lobbyists Registration Act, there have never been any investigations tabled, and never any investigations tabled before the House.
We have 10 underway. Of those, four are at the process that Ms. Shepherd described, where the lobbyists have been given an opportunity to prepare a response. Four of the cases are for one lobbyist in four individual cases. That response is required within days from now. Following that, I dearly hope to have those reports in front of both Houses of Parliament as quickly as possible. I will then be able to stop saying that there is no evidence that there are consequences for this act, which has been interpreted in front of this committee as saying that there is no enforcement of the act, which is not what I said and not what I believe. I do not believe, as you have said, that there are no consequences. I would like to table four shortly in front of this house and the other House.
Senator Zimmer: That comes back to my earlier question, which you could answer.
Mr. Nelson: Yes.
Senator Zimmer: You indicate that you support the addition of a mandate to develop and implement educational programs. Thus far, what has your office done to educate the public office-holders of the registration and conduct obligations of lobbyists? What have been the limitations of those efforts?
Mr. Nelson: The amount of time we are talking about since I began this full time last October is not a long time.
Last summer, when the new act came into force, I wrote to all deputy ministers and I said, ``There is a new act in force. If you would like me to come to your management committee, then I will do so and make a presentation.'' A number of departments took me up on that, so I have talked to departmental management committees. Generally speaking, it is the deputy minister with their assistant deputy ministers taking this presentation. The feedback from those meetings indicates that it has been extremely useful to them in understanding not the amendments but the act, period. For a short act, as some have commented, it has a lot of twists and turns. We have gone around to departmental management committees. Some departments have actually asked us to make presentations at lower-level management committees. I have appeared at various conferences. I will appear at one in October, the Public Affairs Association of Canada, to talk about the act.
The main limitation is that there are not many of us, and there is a tremendous absence of knowledge about the current act, let alone the amendments. I need to have leverage. Leverage is, perhaps, the Canada School of Public Service, perhaps the Government Relations Institute of Canada. I need some leverage out there, because there will never be a huge number of us out there. I need clear communication products. One test product is the deck that I circulated. Does that deck help in terms of explaining what can be an arcane act at times? The main limitation right now is that I do not have enough leverage. However, I expect to get some, particularly with the new act.
Earlier, I spoke about going to Treasury Board for money. Treasury Board normally challenges these types of requests. One thing they will ask is, ``Is this in your act or not?'' They could say, ``Mr. Nelson, you are doing volunteer work here,'' because it says nothing in the act about any requirement for me to do anything of that sort.
Therefore it is a big improvement for me to be able to point to a part in the act and say, ``Look, it says I am supposed to do this.''
Senator Fox: I read the second point in your opening statement where you say that unregistered lobbying can virtually be eliminated if public office-holders refuse to communicate with lobbyists that are not registered properly on the public registry.
Can you expand on that?
Mr. Nelson: Yes: Not to be cute in saying this, but it takes two parties to make a lobbying transaction. It takes a lobbyist and it takes someone who is willing to receive the communication. There are two types of enforcement and when I wrote this, I thought of that word ``enforcement'' again. There is tactical enforcement, operational enforcement, which is what Mr. Ricard-Desjardins and his people do when someone registers and there is not enough information: they say, give us more information. There is that sort of enforcement, but then there is strategic enforcement. Strategic enforcement is making public officer-holders understand that when someone calls who says that they represent a company, or a part of a company, and they would like a meeting or they would like to talk to them, that lobbyist might have obligations that the public office-holder could check on the public registry. I advise these management committees. I talk to them and I was asked this question at a House committee a couple of weeks ago: ``What do you advise MPs to do?'' The public registry is available 24 hours a day, seven days a week. I advise committees to check the registry to see if lobbyist so-and-so is registered to talk to them or their organization about this subject. If not, they should at least ask the lobbyist why they are not registered and whether they have considered registering.
That is what I mean. There may well be reasons why the person is not registered. If you are not paid to lobby, you do not have to register. If I and the folks on my street lobby the Minister of Veterans Affairs for money for a Veteran's Day event, no one is paying us and we do not need to register. It is lobbying but it is not a register-able event.
I am talking about the ability of public office-holders to know what lobbyists are supposed to do so they can effectively enforce the act in a soft way.
Senator Fox: Obviously, one way to close the loop is to have public office-holders disclose who they have met with and verify names against a master list somewhere. Do you have thoughts on that?
Mr. Nelson: I do, and there has been debate around this idea. The current bill has come down on a certain set of senior public office-holders where lobbyists would have that obligation. The problem I see with public office-holders registering lobbyists is that the public office-holder is required to have knowledge of whether the person was a volunteer, or whether the organization spends 20 per cent of its time on lobbying, information that is required in this part of the act. There are a lot of ``ifs'' and ``whethers'' as to whether someone should be registered or not. If public office-holders record every contact, the registry could become cluttered with alleged lobbying that is not an activity that is register-able under the act.
Senator Fox: May I assume that there is an exemption under the access to information legislation that would allow, let us say, senior public office-holders, assistant deputy ministers or directors not to respond to questions asking who have they met with over the past month?
Mr. Nelson: I have to bow to someone who knows the Access to Information Act better than I do. As an ADM, I have been asked for my calendar on occasion.
Senator Fox: Is that under the Access to Information Act?
Mr. Nelson: Yes, through the Access to Information Act.
Senator Fox: I know you said you are not the person to ask, but I could ask the manager of the Technology Partnerships Program in the aerospace industry who he received calls from during the past month if I were a newspaper person and then check as to whether these people were registered lobbyists.
Mr. Nelson: Yes, that is my understanding. With respect to Bill C-2 and what is currently called the contact registry, although public office-holders are not required to keep a record of the registered lobbyists they talk to, it would certainly be wise. I would give senior public office-holders that type of advice — to keep some kind of record because they could be asked to verify that information. If they are not in a position to verify the information, then they are into the type of trouble that Senator Campbell talked about earlier. Even though it is not explicit in the bill, a practice that will emerge is much better record-keeping by senior public office-holders about who they have met with in case someone comes knocking.
Senator Fox: As far as people who are part of lobbying organizations in Ottawa, or people who are part of organizations who lobby the federal government, their names are probably well known in 90 per cent of the cases. I assume that in 90 per cent of the cases the senior officials are aware of the name of the individual. I am more familiar with the tier one, tier two type of definition, which I gather has disappeared from the act, probably many years ago. If I get away from the professional lobbyists and go into the so-called tier two lobbyists working for a corporation, I think 100 per cent of them are known to the senior officials they deal with. For instance, if I call up the assistant deputy minister in the telecommunications industry, as I once did in my past, and I was registered so that is was all right, he obviously knew me. If I identify myself as, let us say, a senior official from such and such a telecom company, the assistant deputy minister knew obviously that I was someone from that industry. What is the extent of the dealings that I can have with that person? People call them on a daily basis. People call and push the envelope to know in which direction the department is moving in terms of recommendations to the government and interpretation of existing regulations or statutes. As a matter of fact, I cannot think of any reason to call a senior person in the government unless you want to know something other than whether the calendar year ends on December 31.
Mr. Nelson: The act does not restrict what you can talk to public office-holders about. It says only if you talk to them about certain types of things you must register. With respect to types of lobbyists, tier one and tier two are still part of the knowledge of many of us, but the way the act works now is that consultant lobbyists are the people you hire to do something for you, and then there are two types of in-house lobbyists. There are in-house lobbyists for corporations. For instance, I pulled out a couple of registrations before I came over. Shell Canada is registered as an in-house organization and they have 42 lobbyists on their registry who communicate with the government.
The Chairman: Are they employees of Shell?
Mr. Nelson: Yes, they are employees, and various rules trigger the requirement for certain ones to be on the registry. Once the company as a whole reaches more than 20 per cent of the time of one person — one day a week is one way to think about that — then the senior officer in that corporation is required to register any senior person in the organization or any officer-level people — not the direct reports but the officers in the organization — who spends more than 20 per cent of their time lobbying. It is one of these rules that takes a while to get your head around.
That is one regime for lobbyists of in-house organizations. Then there is a third group of lobbyists of in-house organizations in which universities, Canadian medical associations and that sort of organization are captured. It is terribly important to understand the breadth of what the act captures. In applying a new rule to the act, perhaps this new rule is because of consultant lobbyists, but there is a good chance it will capture someone who works as a researcher at Dalhousie University.
Senator Fox: In that context, how would I, as a senior officer of a corporation that is active in some field of manufacturing or industry, call up the Department of Industry and tell them, ``You do not really know what you are doing. You are killing us up here. Unless you do the following, we are dead in the next six months?'' To my mind, that activity is lobbying and that individual, whether the individual knows it or not, ought to register within a certain period of time as a lobbyist. The ultimate question is, to what extent can you still communicate with your government? People do not like to be called lobbyists. Really, they are acting in the interests of their company or their shareholders, and suddenly they are — I should not use the word — ``tarred'' by the word ``lobbyist,'' but to a certain extent they are, by the press. To what extent can they do that without registering?
Mr. Nelson: In the case you talk about, where a person is part of a for-profit organization, if that person is the only person in the entire place doing what you are talking about, and if they are not doing it for more than a day a week, including preparation time for writing documents to send, they do not have to register. The threshold currently is 20 per cent of their time. However, if a whole bunch of people in that organization is doing it and it equates to more than 20 per cent of the person's time, that is different.
Senator Fox: Building on that, it is evident from your answer that if I, as a senior executive, have a real problem, I should cast aside the people who spend more than 20 per cent of their time lobbying within the corporation and deal with the government directly, because then I do not have to disclose that I have met with the deputy minister or the assistant deputy minister.
Mr. Nelson: If there is enough lobbying to trigger the need for the entire organization to register, if you are in that senior group, any amount of time, even one phone call, is enough to require you to register. I would say that the reason this was not there when this bill was drafted is that a phone call from the CEO for five minutes probably has a lot more impact than all the directors of communication and government relations calling the deputy minister for two weeks. I think that is why that twist was put in.
Senator Fox: Shifting grounds completely, my last question is about the cooling off period. My understanding is that the five-year, cooling off period applies to Order-in-Council appointments. Is that correct?
Mr. Nelson: It applies to those who are defined as senior public office-holders. We better get out the act. The definition of senior public office-holder is new. This new group of people has been created, because right now we are all public office-holders. Bill C-2 creates a new subgroup called senior public office-holders. Is there a simple answer to that?
Mr. Bergen: I think there is a simple answer. The definition of senior public office-holder is in clause 67 of the bill and includes ministers of the Crown; ministers of state; any person employed in the minister or minister of state's office, as well as a public servant in a department as defined in the Financial Administration Act who is the deputy minister; the chief executive officer or some such equivalent; and an associate deputy minister or an assistant deputy minister, or in a position of comparable rank, because in some organizations you may have that rank but not actually have that title. Then, there is another category of individuals who may be designated by a regulation.
Mr. Nelson: Trying to answer the question, some of the people just named are Governor-in-council, GIC, appointments.
Mr. Bergen: Exactly.
Mr. Nelson: At least some of that group are GICs. Although the act is not explicit that GICs are in, some people who are GICs are named in the bill.
Senator Fox: My concern or interest is whether people who hold positions at the moment as commissioners of the CRTC, the Canadian Pension Plan Investment Board or the Canadian Transportation Agency are covered by this section.
Mr. Nelson: It depends how they are nominated right now. I would say GICs are in as public office-holders.
Senator Fox: Is it clear enough so that sitting members of these boards know whether they will be affected by this? At the moment, my understanding is that if I am in an agency, I am a little better than others at the CRTC. There is a cooling off period at the moment, but I am not sure if that period is one year or two years. Do you know?
Mr. Nelson: For now, under the Conflict of Interest and Post-Employment Code, there are different amounts of years depending.
Mr. Bergen: Some may be five years even now.
Mr. Nelson: The lobbying prohibition is five years currently for public office-holders under the code that came into effect in 2006.
Senator Fox: That prohibition applies to all people who have these positions at the moment?
Mr. Nelson: I think the best answer to your question, senator, is that I do not think the current act or Bill C-2 are clear enough. Part of the education mandate of the commissioner of lobbying is to ensure that senior public office- holders know who they are, for two reasons. First, they need to know who they are for the cooling off period, and second, lobbyists need to know who they are so that, when they communicate with them as public office-holders, they know what they need to do.
Senator Fox: I was thinking in terms of the holder of that position at the moment. It is important that they know whether this is a change. From my understanding at the moment, it is either one year or two years for a CRTC commissioner. If, in the future, they are barred from dealing with the industry they regulated for five years, it is important for them to know it now, as I think some of them would want to reorganize their careers almost immediately before this provision is brought in.
Mr. Nelson: I agree with you 100 per cent. It is critical that this new group of people called senior public office- holders — that lobbyists have obligations towards, and who have personal obligations with respect to their post- employment — know who they are and that the public knows who they are. I agree 100 per cent.
The Chairman: In Senator Fox's second to last question, he raised an interesting issue about commercially sensitive information. I will come back to that question, but first I want to go to Senator Andreychuk who has been waiting a long time.
Senator Andreychuk: Mr. Nelson, welcome, and thank you for your explanations. I want to follow up on a few points you made. You are in favour of Bill C-2, as I understand it, because you think it will give you more leverage for investigations, to put it in layman's terms?
Mr. Nelson: I was trying to be as clinical as I could. Some parts of Bill C-2 are incredibly helpful for problems I have right now. One of those is, in terms of leverage, the explicit education mandate, because it gives me explicit duty to make sure that public office-holders know what the obligations of lobbyists are. That duty effectively multiplies my presence, if you will, not in any egotistical sense, but it multiplies the number of people who know what lobbyists are supposed to do. The investigations part of that mandate is terribly important because, right now, if I am not conducting an investigation under the code of conduct, if I am only looking into something, then I must count on volunteer compliance, which does not do the trick some of the time.
Senator Andreychuk: Those two things are basically the essence of your work.
Mr. Nelson: There are three elements to the work: maintaining a registry; communicating with those who use the registry and with those who are in the sphere of the lobbying activity; and enforcing. The simplistic way I look at the work is that there are three strategic elements to this job.
Senator Andreychuk: When the previous act came into being, was money allocated for education, for training and for disseminating information to the public about the act?
Mr. Nelson: No, is the simple answer.
Senator Andreychuk: I am shocked to hear that. Having sat for many years on this committee, any time there is a new initiative — particularly when it affects people's rights and responsibilities and there are consequences — government has always come forward to say there will be pre-training: for example, when we put in the Youth Criminal Justice Act. Good policy practices mean that you set aside something for training people who are affected or who administer the initiative, and for disseminating information to the public. This money was not allocated, you are saying. It is incredible.
Mr. Nelson: If one reflects on the environment at the time, it is possible that lobbying, and the requirement for public office-holders to know the obligations of lobbyists, was not seen to be as important as other things. The environment created by the Gomery commission and by some of the events of the last couple of years has brought lobbying, and everything to do with lobbying activity, and the Office of the Registrar into a different place, which we think is important in terms of accountability.
In the sense that events have their time and policies have their time in the public domain, the light is on lobbying and has been for the last couple of years. To look at events positively, they have enabled a function that was being done, when I took it over, literally by one person. There were a couple of people at most in the Office of the Ethics Counsellor. Now it is an office of 20 people with a director of investigations, and with investigations under way. To the extent that perhaps we have caught the wind in our sails and moved into a place that in public policy is more appropriate for this time, things are working as they should be.
Senator Andreychuk: I do not know if you can answer this. You say you have 10 cases ongoing, four with one person or company — I do not know which — but one entity.
Mr. Nelson: Yes.
Senator Andreychuk: It is not for us to know your investigation fully, but there has been some delay in responses, I gather — or is it the whole mechanism of how you go about the investigation? If Bill C-2 was in place as it is contemplated now, would it have facilitated these cases that are ongoing? Can you answer that?
Mr. Nelson: My inability to answer is not because of the act. It is more a question of time. The investigations and the powers of investigation under the Lobbyists' Code of Conduct, these 10 investigations, are not changed by Bill C-2.
The delay between the time I initiated them, which was last November, and finally being in a position to say that I hope to bring them forward very soon has been that this was caused by the fact that this is the first time in 10 years that an investigation had taken place. The investigation involves everything from what does an investigation report look like to what are the rights in terms of the protection of personal information of people who were perhaps not the lobbyists but were involved. How do you protect personal information, and how do you make sure that the first time you table one of these reports, it is not immediately overturned by judicial review? Developing that methodology has taken time. As I mentioned earlier, starting from ground zero in terms of staff, I had to hire investigators because I did not have any. That was somewhat of a slowdown.
My hope is that having developed the methodology for these cases, and having now developed the methodology that Ms. Shepherd described for administrative reviews, the extra punch that Bill C-2 or the proposed federal accountability act gives to that front end, before you conduct an investigation, will be extremely helpful.
One of the great frustrations of this job — not the job per se, but the current act — is the inability to act quickly. It is frustrating for the public; it is frustrating for the lobbyists waiting to see what I come up with; and it is frustrating for Parliament. Moving more quickly is certainly something that the investigative powers in Bill C-2 will help with. Having gotten this whole engine rolling will help as well.
Senator Andreychuk: You started your presentation by saying that you are responsible to Parliament but your report is tabled through a minister. You also said you are part of the Public Service Commission.
Mr. Nelson: No, the public service. I did work for the Public Service Commission, but that was another job.
Senator Andreychuk: All right, but you are a public servant that is subject to the public service rules and mandate.
Mr. Nelson: Yes, I am.
Senator Andreychuk: A lot has been made of the fact that you go through a minister. If the minister is actually hands-off, I do not find that a difficulty per se. We hear this comment, not only from you but from others, that you should not need to go through ministers, you should go directly to Parliament. I wonder about Parliament's capacity to absorb and understand all the reports before them; and I wonder whether we have done our job and are ready to be proper scrutinizers of all of that.
One area that troubles me is management. While certain parliamentarians gain an expertise — some can come forward and talk about lobbyists, others about justice and others about access to information — I am not sure we have the full capacities. Nevertheless, I think we can make a good stab at it now and we should reflect on how we go about it.
However, I am not sure about the administration of your shop — what your expense accounts look like, and what you do with your time. I am not sure that is a valuable piece of information for Parliament. Who scrutinizes you on your operations in this whole mix?
Mr. Nelson: The committee that I have typically been in front of is the House of Commons Standing Committee on Access to Information, Privacy and Ethics. Probably because I do not have much of a budget yet, they have not had much to scrutinize in the past. I expect that committee would be the one. For instance, regarding the report on plans and priorities, RPP, that I have tabled, they would say, Mr. Nelson, why have you asked for $3.5 million: what are you doing with it?
In terms of other types of scrutiny, I am subject to the Auditor General like everyone else. I invite anyone to take a look at my proactive disclosures. I am cheap: I do not travel much and have very little hospitality, but those are on my website.
Your question is so important. At the end of my appearance two weeks ago before the committee, I said that as a public servant who is accountable to Parliament for an act and has a minister that he never talks to, coming before a committee of Parliament — like this one and that committee — is the closest I come to meeting with my boss. It is important for those committees to scrutinize the RPP when it comes out, because after the report on plans and priorities, you have the departmental performance report, DPR. At some point, I report on what I planned to do in my RPP. It is an important function when, as I said, you do not really have anyone on a day-to-day basis who is scrutinizing.
I agree with you 100 per cent. Certainly, I will be happy to talk about any of those items in front of any committee — particularly if I think I am doing a good job, but I expect to be happy to talk about them even if I am not.
Senator Andreychuk: Then the public can tell us whether we are doing our job well.
Mr. Nelson: Absolutely.
Senator Andreychuk: Not to be facetious, but you indicated that if you were able to find, in one of your cases, someone wanting to present the case and could present the case, then that would be a rebuttal to what you have been asked by parliamentarians.
It seems to me that the worth of the act, if it is administered properly, is not measured by how many convictions or acquittals you get. I hope parliamentarians have not used that as a test; I certainly would not. For the test of the mandate of your office, the educative qualities are important, to have everyone living by the rules, and not to say there are three convictions.
Mr. Nelson: I agree completely. Enforcement does not equate to convictions. Every time an officer says to someone, ``We need more information, please, before we certify that registration,'' that is enforcement. Every time a public office-holder says, ``I understand that you are supposed to register,'' that is a type of enforcement. There are 3,000 people more in the registry right now than there were several years ago.
You are absolutely right. It is not the ``Lobbyists Conviction Act,'' but the Lobbyists Registration Act. The number of registrations is critical. It is also important because there are people who do not pay attention to the law. It is important that they know that if they go astray, there is a good chance that someone will come after them and there will be consequences. That is why it is important to get these reports out and to get more evidence out.
Senator Andreychuk: Would it be fair to say you are building a proper culture of respect for office-holders and this act is where you are heading?
Mr. Nelson: You are absolutely right. There is a different culture, particularly about people coming to see public office-holders. Public office-holders should not be embarrassed to say, ``I cannot find you on the registry; what is up with that?'' Right now I can imagine a some tendency not to ask. They should ask. It should be part of the culture that it is all right to ask, because it is important to be seen to deal with people who are registered, if they should be.
The Chairman: I would like to ask a question that follows up from something that Senator Fox raised.
You said that lobbyists will be required to file monthly returns, record lobbying activities and so on. It has been argued that the increased disclosure requirements of Bill C-2 will put a chill on lobbying in this country and will drive it underground with informal or spontaneous discussions replacing pre-arranged meetings. Some concerns were also expressed that these disclosure requirements could potentially compromise commercially sensitive information. Can you comment on that allegation, which we have read widely in the newspapers.
Mr. Nelson: Yes, I will answer that. After that, I would like to correct something I said earlier because we have come up with something with respect to questions from Senator Fox.
With respect to commercial confidentiality, I have the expectation that the monthly report, as I read the act, will require the lobbyists to report on the particulars and the subject matter for which they have already registered. If a lobbyist in the current regime is registered to talk to the Department of Industry about acquisition of a new aircraft, then they would talk about that particular and they would use that particular in their monthly report. They do not need to go any further than that.
The Chairman: No more detail is required.
Mr. Nelson: No more detail is required currently, unless regulation changes that. Here is the difference, and this is where it becomes important, and I understand the arguments that are being made. The tempo of the lobbying will now be evident. Right now, lobbyists must re-register every six months. Instead, their competitors can see that all of a sudden they have four meetings in one week with a certain ADM, for example, who might be a decision-maker. I understand the argument that it is not so much the disclosure of the information as the tempo of the lobbying and to whom you are talking. It is one thing to talk to the director of something; it is something else to talk to someone who is able to sign a contract or say yes or no.
The Chairman: I understand your explanation, but what is your view on that?
Mr. Nelson: I do not have a view in terms of whether it is good or bad. For this reason, the act talks about balance, to the extent that it does not change behaviour. It is not the chilling effect that would not be a good thing, but it is that the ADM might say to his or her director general — and director generals are not senior public office-holders — ``Take this meeting, please, because I do not want to take that meeting.'' We would then see activity perhaps submerged that should be talked about and given consideration at the ADM level or deputy level. From a public policy perspective, that submerging would be bad, but it is difficult to judge whether it will happen.
I am not answering part of your question, which involves commercial confidentiality. The point I wanted to raise is that in the province of Quebec, a clause in its lobbying legislation says that if you can convince the commissioner that your information is for an investment that would be threatened from a commercial confidence perspective by registering, you register, but the actual registration does not go on the public registry, and this lasts for six months. I read the most recent report of my colleague André Côté before I came over here. He did not have one instance or request of that nature last year. I think that is important.
The Chairman: You wanted to correct something that you said earlier.
Mr. Nelson: The definition of senior public office-holder does not include members of Parliament including parliamentary secretaries, Governor-in-Council appointees and all other employees of federal departments that are not listed above. It is not Governors-in-Council except those that are listed above: deputy ministers and people of that nature. Again, to Senator Fox's point, this definition needs clarification, although not necessarily in the act.
The Chairman: It is a good point.
Senator Ringuette: Currently, how many investigators do you have on your staff?
Mr. Nelson: I have three.
Senator Ringuette: You have three investigators and you are performing 10 investigations.
Mr. Nelson: There are ten investigations plus a number of administrative reviews. The investigators do not perform only investigations; they conduct administrative reviews, and even before the administrative review comes in — if I get a letter, as I did the other day from a member of Parliament or someone saying we want you to look into this — someone will be assigned it. A variety of activity is going on.
Senator Ringuette: Are you saying that both investigations and administrative reviews are triggered by a complaint?
Mr. Nelson: It could be triggered by an internal observation. We read the paper in the morning. We have a communications person. If we see something that we should look into, we do.
Senator Ringuette: We have talked about assistant deputy ministers and program directors moving from positions of public office-holders to being lobbyists, and the implications under the act looking. However, I do not believe there is any provision to look at the flip side of that issue: lobbyists becoming assistant deputy ministers and program directors, which is another unbalance when we look at influence peddling.
I would like your views on the fact that the bill looks at one side of the issue of public office-holders becoming lobbyists and being privy to information. The flip side of the issue is lobbyists becoming public office-holders with a certain penchant for their previous fields of employment.
Mr. Nelson: You are right. The bill does not address that issue. I am not trying to be evasive, but in my view it would depend on the individual situation. A public servant also has conflict of interest rules to follow. I expect that when lobbyists enter the public service, they are subject to conflict of interest provisions, to which all of us are subject. How that is policed is a good question. I expect that deputy ministers of departments would be wary of that for public servants, although I cannot say how the rest would be policed. I am not the right person to ask that question of. I expect that anyone, regardless of their employment, whether as lobbyists or political operatives, coming into the public service would be subject to the same conflict of interest rules as the rest of us are. Public servants can be aware of other public servants doing things that are not proper, and there are ways to report that as well.
Senator Cowan: All of us support transparency, openness and accountability. Many witnesses before this committee have expressed support for the thrust of the bill, saying it represents significant improvement. Many witnesses have suggested ways in which the bill could be improved or clarified, as you did in your discussion with Senator Campbell earlier and in your comments on Mr. Giorno's submission on improvements.
In response to your questions from Senator Fox, you said that you thought the bill could be clarified. You then read us another section and I am unsure, from that exchange, if you said it does not necessarily need to be clarified in the bill but it needs to be clarified. Recognizing that a significant number of amendments will be made to this proposed legislation in an effort to improve it, do you suggest that some changes and clarifications ought to be made to make this role and function work better?
Mr. Nelson: I am not convinced that they need to be made in the bill. For example, the bill talks about assistant deputy ministers or equivalents. Many equivalents come into being and might come into being in the future. For example, when I was ADM with the Public Service Commission, I was called an ``executive director'' and later, a ``vice- president.'' If you try to list too many of those titles in a bill, you put yourself in a bind. I like the idea that the bill says, ``or equivalents.'' It also authorizes the Governor-in-Council to designate others as equivalents. You take that out of the bill because you would be trapped for five years or more if you happen to get it wrong in the bill. It is doable outside of legislation.
Senator Cowan: That provision in the bill that enables the Governor-in-Council to designate others as equivalent would cover that clarification.
Mr. Nelson: Yes, for example, it would be helpful for members of the armed forces. I am not sure of all the other applications but I do not know if anyone is completely sure. Certainly, the bill enables that designation to take place.
The Chairman: Honourable senators, I suggest that honourable senators give leave to extend the panel by 10 minutes to allow Senator Day and Senator Campbell an opportunity on this round.
Hon. Senators: Agreed.
Senator Day: While you were speaking, Mr. Nelson, I looked through Justice Gomery's recommendations. Only one out of the 18, Recommendation 15, refers to the registration of lobbyists that were you speaking about earlier.
Mr. Nelson: Is that the one on education?
Senator Day: Yes, you were analyzing it and it is the only one I see that relates to lobbying. Justice Gomery recommends having sufficient resources to enable you to publicize and enforce the requirements of the act, including investigation and prosecution by your own people. That is not in the bill. Is that something that you would like to see? Would that make your job as commissioner of lobbying more effective?
Mr. Nelson: The separation of those responsibilities is a useful one. The ability to have yet another set of eyes on the prosecutorial side, and the expertise that it requires, would probably result in a larger office, although it might run into the responsibilities of others in the prosecutorial domain. I am satisfied, without the prosecution aspect, that there is enough in the bill and in the office. However, there should be a better relationship with the RCMP so that they, who have had their hands tied for years on these matters, can have a better understanding of the issues and be better able to do their job. In the sense of education and cooperative relationship, getting closer to those who would do the prosecution is the way that it would work.
Senator Day: You explained the investigative process earlier. When you conduct an investigation, do you take the results of it to the RCMP or will you recommend prosecution to the RCMP?
Mr. Nelson: I will tell you what we did in one case. We performed our administrative review, put together a book with all the information that we had gathered, and wrote to the RCMP recommending that they look into this matter with respect to a possible conviction under the Lobbyists Registration Act.
The RCMP might take that and start at square one because I had no authority to do anything about it or they might decide that there is good useable information but that they need more. It is up to them to do what they do.
Senator Day: The RCMP would investigate on their own and take their findings and recommendations to the Director of Public Prosecutions or to Justice Canada.
Mr. Nelson: That is how I understand it will work. In my view it would work better if I could use my coercive powers before I hand something over. That would give the RCMP a better package to work with such that they might not be as compelled to start at square one in their investigation.
Senator Day: Would it not work better if you could make your recommendations directly to the Department of Justice or to the Director of Public Prosecutions?
Mr. Nelson: I do not have a view on whether that would be better. Certainly, it would change the focus of the office.
Senator Day: The committee is looking for ways to improve Bill C-2. We want it to work well for your department. We understand the points that are positive for you and we will support those strongly. There might be other areas where you feel we can make adjustments to better achieve the goals and objectives outlined in the beginning of the existing act. It is interesting that you have policy statements at beginning of this proposed legislation because it does not occur often. I agree with them. We have had the debate in other areas where some people would like to see them included.
I will go to the amendments to the Access to Information Act on page 86, proposed section 16.2. As I read it, you must not reveal any of your investigation work under the proposed section 16.2 but, after the investigation is complete, you shall not refuse to divulge. Sensitive material could be involved, especially if you conduct an investigation and decide not to make a recommendation to proceed. Do you have any unease about that proposed section?
Mr. Nelson: I much prefer that section now compared to how it was presented in the original bill. That section, as I read it, divides up the information that happens through an investigation into two categories: Information that I create during an investigation and information I obtain during an investigation.
It says, as I read it, that during the investigation, it is all verboten. After the investigation, the information I have created may be released, but I presume that would be subject to the normal Privacy Act and the provisions of the Access to Information Act.
I think it is very important, and why I like that better than not being able to let anything out, is for this education mandate. It is quite possible that information I create during that review, subject to exactly what you are saying, ensuring that people's rights are respected and the Access to Information Act is respected, could be used for education purposes. If I do all these investigations and cannot tell anyone about them, then that defeats the purpose of the enforcement part.
Senator Day: You are quite right in bringing in the privacy legislation and we have had that debate throughout the review of this legislation. Disclosure is important, from the point of view of accountability, but individual privacy rights are extremely important as well. That is why I was trying to get your comment with respect to this section; I think there could be some concerns with respect to individual privacy rights here. However, I have heard what you had to say and I appreciate your comment in that regard.
One of the breaches is failing to register. If a not-for-profit group has not registered, believing they are not a lobbyist, and you think maybe they should have, what process do you go through to investigate that at the front end?
Mr. Nelson: Ms. Shepherd took us through that process earlier. I like to use the word, ``triangulate.'' We would talk to the public office-holders they were talking to, and talk to the lobbyists within that organization. We would gather information about what they were doing.
Senator Day: They do not call themselves lobbyists. They say they do not have any.
Mr. Nelson: No, but they do have people who have been communicating. I am assuming, in this case, we would have been made aware that someone was communicating with a public office-holder. I do not care what they call themselves. I try not to use the word lobbyist. A lot of time I talk about registerable activities under the act, because it is not true to say you are not lobbying just because you are not being paid. It is part of our language, it is lobbying, but it is not a registerable activity under the act.
We would gather information about their activities and if we believed it was registerable under the act and it was within two years, then that would go off to the RCMP and they would get a visit from them.
Senator Day: It can be a complaint by someone or initiated internally; the same rule applies?
Mr. Nelson: Absolutely. The act does not speak to how these things get started so we decided on anything that comes in through any port.
Senator Day: I went to your website and you have a tremendous number of organizations registered. I suppose people are getting to know about it and they are registering which is a compliment to you and your work.
Mr. Nelson: Thank you.
Senator Day: You have developed a code now under this current act. Before you implement it, and I suppose that is before you implement any changes to it, it goes before a House of Commons committee. Would you have any difficulty if you went before a Senate committee to review that code now that we have had an opportunity to educate ourselves with your bill and the amendments to it?
Mr. Nelson: Absolutely not. I do not know why; that may have been an oversight in the original drafting.
Senator Day: That is in section 9 of the current act.
Mr. Nelson: No, absolutely not.
Senator Day: I have many other questions but in the interests of time and keeping our schedule, I will forego the other questions and perhaps I will have a chance to ask them of the next witnesses. I would like to thank you very much for your appearance. If I have some questions that the next witnesses cannot answer, would it be possible for me to write to you and the answers would be circulated to the committee.
Mr. Nelson: Absolutely. Whatever the protocol, I will write to the chairman and would be pleased to do that for you senator.
Senator Campbell: I found myself much in the same position when I was chief coroner; I could not charge anyone but I could always send the information to the Mounties and we determined if they would think it was important or not. You may have something there that is a power. For instance, there is a suggestion that the contravention of the Lobbyists' Code of Conduct should be an offence, obstruction of the commissioner should be an offence, and it would be an offence to contravene a prohibition. Again, these all come from the gentlemen who would be coming here.
You have those. It is not you use them, but it demonstrates the seriousness of the issue that is at hand. Would you agree that these would be good additions? It is not a hammer that you have, it is just that people look at it and realize that this is serious business and cannot be ignored because there is recourse.
Mr. Nelson: Of the three you just mentioned, and I have not had a chance to talk to Mr. Giorno about these, the obstruction one I agree with completely. I will be looking forward to Mr. Giorno's testimony, with respect to the code. I agree completely with his logic that behaving badly is much more serious in some cases.
Senator Campbell: There are jurisdictions that provide for the code and, in fact, in Quebec you can get fined $500 to $25,000. So, it is not like we are looking at something that is coming right out of woodwork. It actually is there. Again, I do not expect you to be running around hammering people with fines, but they should know that if they are not going to pay attention to this act, that there are penalties that will be paid.
Mr. Nelson: My only reservation to that recommendation is that if it meant that instead of tabling a report in Parliament, I had to send something off into another investigative process that has a higher test because of the criminal code, that evidence of consequences that I talked about would have less of a chance. That is my only concern.
Senator Campbell: I thank you very much. It was very informative and I will be on your website.
The Chairman: Mr. Nelson, before saying thank you very much, I am curious to know, you said you have read some of the testimony that has come before this committee. Have you read the testimony of Duff Conacher when he appeared before this committee with respect to registering as a lobbyist when he is a consultant? Did you read that by chance?
Mr. Nelson: Yes, did I.
The Chairman: Would you like to comment on that testimony?
Mr. Nelson: Other than pointing out that he was incorrect in saying — and thank heavens we have Hansard for things like this — that I said the act is never enforced, my only comment — because his 140 recommendations are very detailed — is that some of them had merit and others would require quite a lot of study. I think in order to comment properly on those would take quite a presentation, Mr. Chairman.
The Chairman: On behalf of the committee, I would like to thank you and your associates very much. You have been a key witness on a very important part of this proposed legislation and your evidence has been clarifying and enlightening. Thank you all very much.
Honourable senators, we have before us now the Canadian Society of Association Executives, which are represented today by Robert Ramsey and Robert Hamp. The association aims to promote the value of not-for-profit organizations to Canadian society by reinforcing and advancing the excellence and professionalism of its members through relevant education, advocacy, information and research. They are joined by Mr. Guy Giorno, a lawyer with Fasken Martineau DuMoulin. He is one of Canada's leading experts on lobbying law. He regularly speaks, writes and advises clients on Canada's different lobbyist registration laws and is the principal co-author of the text Lobbying in Canada.
Also at the table is the Canadian Conference of the Arts, represented by Alain Pineau and Keith Kelly. The CCA is a non-partisan, non-profit cultural advocacy organization which aims to provide a national forum for debate on cultural policy and to be a leading national advocate for Canada's artists and cultural institutions and industries.
[Translation]
The committee wishes to thank you for your presence here. I will now hand the floor over to you, after which we will have a question and answer period which, I am sure, will be most useful to committee members.
[English]
Guy W. Giorno, Lawyer, Fasken Martineau DuMoulin LLP, as an individual: Thank you very much. I know my presentation is being circulated because I heard reference to it, so I will get right into brief introductory remarks.
My view is that the lobbying sections of the proposed legislation ought not to raise and does not raise the issue of whether lobbying is good or bad because, as the current act says, lobbying is a legitimate activity. More than that, the right to petition government has its roots in the Magna Carta and in the 1689 English Bill of Rights.
If a corporate citizen or an individual citizen finds government so complex, or challenging, that he, she, or it wants to retain expert assistance in accessing or communicating with government, then that too is a right.
It would be unfortunate for the debate to degenerate, as it has in the media and among some critics into a debate about whether lobbying is good or bad. The issues should be accountability, transparency and the ethical standards that are applied to lobbyists.
I know there are critics of increased disclosure, critics of increased transparency and openness, and to them the message has to be that while it is every Canadian's right to influence public policy, it is not a right to influence public policy secretly. That, in my view, is the distinction.
Some worry that enhanced disclosure, shedding more light on lobbying activity, will have a chilling effect on communications between government officials and stakeholders or will damage the lobbying industry. In my paper, I refer to the Province of Quebec and the Province of British Columbia, where they have some types of disclosure and they have not had those damaging effects.
I also refer to the United States, where federal and state law governing lobbying is for the most part much more onerous, much more intrusive than anything that is on the books or is being proposed in Canada. I document some of those examples: Photo identification for lobbyists; making lobbyists in some states disclose every penny and naming the public officials on whom that is spent; and I could go on and on.
No one, honourable senators, seriously contends that we have a problem in the U.S. where there is too little access by lobbyists to decision makers. No one seriously contends that in the United States the American lobbying industry is so hard done by that it is suffering as a result of over-regulation.
Bill C-2 is good, it is laudable, it is a very good step, and in my respectful submission it should, ought to and must pass to meet the expectations of Canadians. That said I believe the legislation ought to be improved.
Senator Day: Are you talking about the entire bill?
Mr. Giorno: The lobbying sections.
I have suggested 12 specific amendments or recommendations for members. I want to speak briefly to two of them. The first is a concern that I raise about the technical drafting of the detailed monthly reporting section. That is on pages 69,70 and 72 of the proposed legislation.
As drafted, detailed monthly reporting would apply only to prescribed types of communication. In my view that is unfortunate. I recommend reversing the order of that provision so that detailed monthly reporting applies to all communication except that which is exempt because it is prescribed by regulation as exempt.
What is the difference between the two? My concern about the current wording saying that cabinet has to prescribe the communication that must be reported monthly is this: If cabinet is unaware that a type of communication exists, then cabinet cannot prescribe it. If cabinet does not prescribe the communication then under the current wording it is not disclosed. In my opinion, some of the very types of communication that ought to be disclosed will escape reporting precisely because cabinet is unaware of the communication.
The advantage of the reverse approach is that it would be more transparent. It would be more transparent to have Canadians actually know what is exempt — and that can be detailed — as opposed to having silence on that issue so that Canadians and lawmakers do not know. There is saying, and it is trite to say, you do not know what you do not know, but it is true, and in that case if it is never reported it will not come to light.
Finally, I believe it puts the onus where it should be. If the lobbying industry wants to come to government and say prescribe by Order-in-Council, prescribe by regulation these exemptions, we think routine emails should be exempt, then they can make that case, as opposed to making it the reverse where Canadians and proponents of access would have to make the case for what ought to be covered.
The second of my specific recommendations is inconsistency in the five-year cooling off period. I believe the five- year cooling off period is vital, necessary, it meets the expectations of Canadians, but there is an inconsistency between the way the five-year cooling off period has been drafted in Bill C-2, and the way it exists in section 29 of the post- employment code. Second, distinctions are drawn among different types of in-house lobbyists and those distinctions are different from the way in-house lobbyists are treated in other sections of the same act; the Lobbyists Registration Act.
I can speak to that in somewhat more detail but just to highlight two examples: Under Bill C-2, in-house lobbyists for organizations are treated much more severely than in-house lobbyists for corporations, and I am not sure that was the intent for differential treatment when it comes to the five-year ban. To say that again a bit differently, a senior public office-holder who leaves that office and goes to work as an in-house lobbyist for an organization would be treated more severely than a senior public office-holder who leaves that office to work as an in-house lobbyist for a corporation.
The Chairman: In what way?
Mr. Giorno: It is on page 75 of the bill in proposed section 10.11. You will see that in proposed paragraph (b) and paragraph (c) there is a difference because proposed paragraph (c) has additional language at the end. Proposed paragraph (b) refers to a senior public office-holder who goes to work for an organization. By the way, ``organization'' does not just include not-for-profits, it includes them, it includes partnerships, and it includes anything that is actually not a corporation.
Anyone who goes to one of those organizations and does any of the activities, that is any of the registerable activities in section 7, is subject to a five-year ban. If he or she leaves public office and goes to work for a corporation there is some additional language, and that is that he or she carries on those activities that can be registered and they constitute a significant part of the individual's work. I am sure honourable senators have heard that that is 20 per cent.
The Chairman: One day a week.
Mr. Giorno: Or one day a week. The way this works, a senior public office-holder who goes to a not-for-profit or a partnership and spends 1 per cent of his time lobbying would be covered, whereas one who goes to work for a corporation and spends 19.999 per cent of his time lobbying would not be covered. I do not think that is what was intended. I think that is an oversight. I think that is something that could easily be corrected.
There is also a bit of a difference in the way senior officers of corporations are treated. Again, under the existing act and under section 29 of the code, if you are a senior officer of a corporation and you spend one second lobbying, .0001 per cent of your time, you are subject to the ban. For some reason, the way this section is drafted, as a senior office- holder of a corporation, you are now subject to the 20 per cent rule. Again, I do not believe that is intentional; I think that is an oversight.
Those are just two of the specifics I wanted to focus on, members of the committee. I know there will be time for questions and I should conclude my remarks.
The Chairman: Thank you very much and I am sure there will be many questions.
Robert Ramsay, Chair, Canadian Society of Association Executives: Thank you members of the committee. The Canadian Society of Association Executives welcomes the opportunity to comment on Bill C-2 the proposed federal accountability act, and is pleased to participate in its review on our members' behalf.
I am the current chair of CSAE's government relations committee and President of the Motorcycle and Moped Industry Council, as well as the Canadian All-terrain Vehicle Distributors Council. With me this afternoon is Mr. Bob Hamp the CSAE Director of Communication and Research.
CSAE is a professional organization of 1600 men and women who manage many of Canada's most progressive trade, professional, occupational, philanthropic and common interest organizations. An additional 600 business members provide services and products to the sector and comprise an integral part of CSAE's membership.
CSAE and its member organizations support government initiatives to strengthen the rules and institutions that ensure increased transparency and accountability to Canadians. We share those goals and, with the exception of two major concerns, we are pleased to support the overall intent of the proposed legislation.
Our first concern relates to the restriction on lobbying activity that enshrines a five-year prohibition on lobbying activities for ministers, their staff and senior public servants. We believe government officials should maintain the right to move freely from government service to the not-for-profit sector in view of the unique relationship that non-profit organizations currently enjoy with the federal government. Senior staff in CSAE member organizations who lobby government are defined by the Lobbyists Registration Act as ``in-house organization lobbyists.'' They lobby government officials, and their primary focus is to seek common good for all their constituents.
Let me put this in perspective for you briefly. Many years ago, I was an assistant to a member of Parliament and a cabinet minister. The organization I joined, when I left the minister, had little expertise in government relations. In fact, there were only four staff members at that time, none of whom had any government experience. They relied on my insight and knowledge, and that enabled them to represent public policy in a much better way. I was not me personally; it was my insight into the workings of government, and the ideas of public policy and the public good. I brought my expertise of how to frame that insight within the industry so that the industry not only brought forth its ideas and interests but was able to see the public interest. I assisted them in bringing forward a better framing of transportation policy with the industry I am with, environmental policy, safety policy and all those items.
When we deal with the not-for-profit sector, we are talking about very small organizations. Most of them have less than 10 staff. They do not have a lot of expertise. They rely on one or two people to do all their government relations.
We are a national organization and operate right across the country. We deal with all 10 provincial jurisdictions, the territorial jurisdictions and, of course, most importantly, the federal jurisdiction. These sorts of things are important to the not-for-profit sector.
It is the CSAE's position that eliminating the five-year moratorium, or replacing it with a more reasonable period, would ensure the continued maintenance of the unique exchange of information and consultation that currently benefits both the government and the not-for-profit sector. Failure to remove this time constraint will ultimately dissuade government officials from working with the not-for-profit organizations. It will be a barrier. People like me will not be able to enter the not-for-profit sector. That will be a shame for society, and that will be a shame for government.
Our second concern is with the obligation to report all contacts with designated government officials. The act requires in-house organization lobbyists — and I am an in-house organization lobbyist — to record all registerable activities with certain exceptions such as chance encounters, although chance encounter still needs to be defined precisely. That may take place with senior office-holders, including who was met and what was discussed, and lobbyists must file regular reports with the registrar.
Again, CSAE is concerned that new and more frequent reporting requirements may lead to situations where contact with government officials is severely curtailed or avoided altogether because of the new reporting requirements. It is not so much that the reporting requirements are there; it is the fact that they are so onerous. If you have seven or nine staff, and you have to report every contact, that eats into a lot of time. We deal with numerous departments. CSAE is concerned with this new and more frequent reporting requirement. Most of the contact comes from the government to us. We have experts on safety, engineering and those sorts of things within the transportation sector that the government cannot have and can never have. They cannot afford the same level of expertise — engineering and otherwise. We respond to Environment Canada, Transport Canada and other organizations that require that sort of expertise. It is a give-and-take arrangement, but now everything must be reported. The free flow of information, research, knowledge and consultation between government and the not-for-profit sector will be curtailed and, as a result, the informed decision-making process that currently exists will be weakened.
Will recording contracts with senior public office-holders truly advance the public policy process to address the issue of public interests? That is an important question, and one that we need to discuss in more detail.
As you may know, many not-for-profit organizations currently register twice annually through the Lobbyists Registration Act and provide updates on issues and subject matter discussed, as well as the government department and the institution contacted. We are concerned that increasing this compliance requirement will be a more onerous and more time-consuming burden and will result in a loss of productivity for many not-for-profit organizations currently facing resource constraints. We have very few resources in not-for-profit organizations and our small staff is overworked already; this will add to their workload.
We encourage the committee to maintain the current reporting status for in-house organization lobbyists — in particular, for not-for-profit, in-house organization lobbyists.
Ladies and gentlemen, on behalf of the members of CSAE, I thank you for your time and for allowing me to express some of our concerns. I would be happy to answer any questions you have.
The Chairman: Thank you very much, Mr. Ramsay.
[Translation]
Alain Pineau, National Director, Canadian Conference of the Arts: Thank you very much, honourable senators, for giving us this opportunity to appear before you.
I wish to underscore that my colleague, Keith Kelly, who is described as being Senior Policy Advisor, also held the position which is now mine for some ten years, from 1989 to 1998. He therefore has a historic perspective on government relations which I do not have. This is why he has accompanied me here today.
Senator Fox: Forgive me for interrupting, but do you have a statement?
Mr. Pineau: We sent a letter, but I could table my statement with you.
The Canadian Conference of the Arts, or CCA, is the oldest and largest cultural sector organization. It represents the viewpoint of all artistic disciplines. The CCA speaks on behalf of all individuals and institutions, be they profit or non-profit, who, wherever they are in this country, are interested in our national culture.
The CCA's mandate in civil society is to speak out in the name of our common interests on any policy or regulation that has any impact whatsoever on the arts and culture sector. For more than 60 years now, the CCA has contributed to public debate through the information and studies it produces and the forums it organizes with regard to federal government policies and programs impacting upon the cultural sector in the broadest sense of the term.
To give you an idea of our current involvement, over the last eight days, I participated in a presentation before the blue ribbon panel on grants and contributions as well as in a presentation before the Standing Committee on Finance in the context of its pre-budget consultations.
I tabled a brief before the CRTC on its television policy and today I have the opportunity of outlining for your distinguished committee our concerns with regard to a bill of the utmost importance.
[English]
It was interesting for me to hear Mr. Ramsay. I am sure that a number of people who come in front of you representing organizations will say things that we support. A lot of the things that Mr. Ramsay said about the not-for- profit and charity sectors apply to most of the organizations we represent here.
We want to focus on two particular areas of concern today. Both areas pertain to the excessive reporting requirements that are being placed on organizations like ours, and to the chill effect this piece of legislation may have on open public debate in our democratic society.
Keith Kelly, Senior Policy Advisor, Canadian Conference of the Arts: The arts and culture sector fully supports the principle of accountability for the use of public funds. Our organizations are governed by boards, which assume the fiduciary responsibility for the management of both government funding and earned revenue. Most of our organizations are audited annually and the results are publicly available.
However, many accountability measures currently in place for the not-for-profit sector are already disproportionate to the amount of government funding received — a fact acknowledged by the Auditor General herself. When we talk about the accountability framework, we are really talking about the accountability framework for funding — the grants and contributions received by the not-for-profit arts and cultural sector.
Monthly progress reports, breakdown of time devoted by staff members to specific projects in increments of hours and minutes, cash flow projections, et cetera consume an undue amount of time for both the recipients of federal funding and the public servants who administer the funding programs. The accountability measures are not sufficiently graduated to reflect the amount of public money provided to the recipients or to the risk associated with the administration of these funds.
The Canadian Conference of the Arts, CCA, asks this committee to ensure that new accountability measures better reflect sensitivity to these issues, and do not add a further unnecessary burden on already fragile organizations of civil society. Accountability processes and requirements should not be the same for a $10,000 contribution as they are for a $10 million contribution. Yet, this is the situation we find ourselves in.
Our second concern with the proposed accountability act centres on the vagueness of some provisions requiring reporting of contact between organizations, the public service and other elements within the federal government network. The CCA, like many other not-for-profit organizations based in Ottawa, has extensive contact with federal officials and parliamentarians. In the policy development process, public consultations such as this one are an essential and ongoing process. The free flow of information, ideas and perspective is central to the development of policies or programs that are intended to address the public good.
Mr. Pineau: The Lobbyists Registration Act requires that half the employees of the CCA must be registered as lobbyists as a result of our activities; since there are seven of us and not three and a half, three must be registered. The disciplines of that act already require registrants to indicate on which topics and with which government departments or agencies the so-called lobbying will be directed.
The CCA has a difficult time reconciling its activities with government and Parliament as lobbying since the CCA in no way directly benefits from any success such efforts may achieve. We intervene on broadcasting issues but we are not broadcasters. We intervene on copyright legislation and yet we hold no copyright from which we would derive an economic benefit from our activity. The addition of another layer of accountability for such actions appears to be redundant and excessive.
It is unclear to what degree the provisions of the act would curtail or complicate these interactions. It would appear that any contact between public servants and members of the general public must be reported on by the organization or individual lobbyist in question. Officials from Treasury Board could not clarify if such rules would require a casual conversation held at a dinner party or cocktail function to be subject to such reporting requirements. If that is indeed the case, social life in Ottawa will be severely curtailed or will have to go underground.
Senator Day: You know how to get to the point.
Senator Campbell: I am voting for this one.
Mr. Pineau: The accountability act was inspired by the misappropriation of federal funds. The intent of the legislation, as we understand it, is to preclude the possibility that this situation would recur. Nothing that we are aware of in the public policy discourse has signalled the need for tighter controls on how Canadians relate to their government, public servants or parliamentarians.
To you, honourable senators, is entrusted the task of ensuring that the accountability act addresses the real key issues that necessitated such measures. It falls equally to you to ensure the zeal for increased accountability does not unwittingly impair the democratic process and the free flow of ideas, opinions, analysis and interchange central to the development of policies and programs that serve the public good.
In a letter that the CCA sent to all members of the Senate in June, we asked, as a minimum, that the regulations associated with this legislation be subject to further open and public hearings, with the focus on the impact of the measures in the act on the interplay between Canadians and their government and Parliament. Today, we renew this call to you.
If your colleagues in the Senate pass this legislation with no significant revisions, the CCA asks that you attach to it a report supporting the call for an open public review of the proposed revisions. Simply advertising them in the Canada Gazette and opening an internet consultation for a few weeks is inadequate when one considers the potential impact of this legislation on the very essence of democratic life in Canada.
Thank you, Mr. Chairman and honourable committee members. We are ready to answer questions you may have for us.
The Chairman: Thank you all for three excellent presentations. I have a brief question for Mr. Ramsay. When you talked about the five-year moratorium, you said it should be replaced with a more reasonable period. What would that reasonable period be?
Mr. Ramsay: We have discussed this somewhat within our government relations committee. That question is difficult to answer because of the types of organizations that we represent. The vast majority are less than 10 people; and if you lose one member of your staff, you lose 10 per cent of your staff. If you need to replace someone with expertise in government relations, that is a huge gap.
We have discussed this issue and we are looking at a more reasonable amount of time. Ultimately, we would like an exemption for in-house organization lobbyists so that there would be no time whatsoever. Realistically, that might not be acceptable from a political standpoint. To try to balance the needs of government and the needs of our organizations, we might find a more realistic time frame, such as one year or two years.
The Chairman: Is that your figure?
Mr. Ramsay: We would like to work with government, because we believe we can put in place the protections necessary from a governmental standpoint. There is this conceptual basis that we want to ensure public transparency and we want to ensure public accountability; let us find a mechanism to do that so that there would not have to be a time lag whatsoever. There may be opportunities of that nature. We believe we can work with government, with you, to find a solution to that.
Senator Campbell: I am sure you are aware of the suggestion that this committee is being obstructionist in some way. Nothing could be further from the truth. I think every member on this committee, no matter which side they are on, believes in the intent of Bill C-2. However, some of us believe that this bill was not studied properly in a comprehensive manner in the other place.
I have that same sense when I read Mr. Giorno's excellent presentation. When I go through his report, I continually see the word ``oversight.'' Then Mr. Nelson uses the term oversight, and Mr. Pineau talks about how we go about this and how we should studying. That is really what we are doing.
I have two questions, one of which covers a statement by both Mr. Giorno and Mr. Pineau. Mr. Giorno, your statement was in The Hill Times, October 2, 2006. Mr. Pineau, yours was in a presentation you made on June 28, 2006. Both of you made the same statement with regard to the set-up of new regulations, that they will be made after the bill is passed. Mr. Pineau said that Treasury Board officials told those present that it will be difficult to understand the impact of the bill until the regulations were drawn up after it was passed into law.
Mr. Giorno, you say here that speculation has emerged within lobbying circles that the government may choose to include only planned types of communications in what has become known as the contact registry. You said that this would encourage lobbyists to game the system. What is ``gaming the system?''
Mr. Giorno: The author of that piece used the phrase ``gaming the system,'' which is common in Ottawa circles. In my paper, I referred to it more diplomatically.
If you have a monthly reporting system, and some types of activity and communications are in while others are out, there is obviously an incentive for lobbyists to arrange their communications so that they do not have to be disclosed.
Let me identify the particular type of communication about which I am concerned. We have not seen the regulations yet. There is a suggestion that what will be prescribed to be covered, as that is the way the bill is worded now, is a planned communication with a government official. Anything unplanned, ad hoc, in the street, at a bar or a cocktail party, will be excluded. That is particularly problematic because there will then be an incentive for lobbyists to plan nothing and to plan to bump into everyone at the Senators' game, at the bar, at cocktail parties and social events. That is why I suggest reversing the order of the structure: cover everything, and then if cabinet thinks there is a good reason to exempt a particular activity, exempt it. That is what I meant. I called it, undiplomatically, ``gaming the system,'' but I meant picking and choosing how to communicate to ensure that most of your communications are exempt from disclosure.
Senator Campbell: Mr. Pineau, I get a sense here that you have no clear idea what the regulations will be or how they will affect you. Is that correct?
Mr. Pineau: Yes, that is the information we received. A briefing session was organized under the leadership of Mr. Perrin Beatty of the Canadian Manufacturers and Exporters. There were about 15 people in the room. It was made clear to us that the legislation had been put together at incredible speed, that it was extremely complex and that they could not answer many of the questions addressed to them. They kept saying, ``Well, you will see that in the regulation, and according to the timetable under which we are working now, you will know in detail what you will have to report probably by June 2007.''
That is not very illuminating when you are considering a piece of legislation such as this and you are trying to take a position on it.
It is extremely onerous for organizations like ours to report on that sort of thing. The comment that Mr. Giorno is making is not available to us. It harkens back to my earlier point that arts and culture, to speak of our own bailiwick — and I have many colleagues in the not-for-profit and charitable sector who would say the same — are not in a position to bump into decision makers at Senators' games. I could not invite any decision maker to McDonald's unless I paid for it myself. I do not have a budget. I have to go Dutch on every appointment I make. It is difficult to be tarred with the same brush as people who gave huge sums of money in brown envelopes to political parties in the past and to be asked to make that sort of reporting requirement.
Senator Campbell: Is it fair that the comment that the cheque is in the mail will not suffice here?
My last question, and this is an interesting one, goes to page 10 on Mr. Giorno's report; in clause 75 on page 75 of the bill, proposed new section 10.1 prohibits contingency payments to in-house lobbyists.
On September 5, Howard Wilson appeared before us. He is, as you know, the former Ethics Counsellor, who was also responsible for lobbyists registration. I found it interesting when he told us that in 1995 there was a proposal by government to ban contingency payments. At that time they were told by Department of Justice that this was outside the constitutional authority of the federal government, that contracts were in essence a matter of provincial responsibility, that we could control the basis of contracts for the federal government or grants could be extended, but not broadly. I take it that the Department of Justice's view has changed. Those are his words.
There is another reason we are here. Yesterday in the Senate, Senator LeBreton rightfully said that we take our responsibilities as legislators seriously. If we did a better job in this place and in the House of Commons to ensure that our laws are constitutional, it perhaps would eliminate the necessity for having groups challenge laws before the courts.
What is your comment on whether this is constitutional or not? If it is not, what are we looking at?
Mr. Giorno: You are asking me about the ban on contingency fees. Generally, I propose that it be expanded.
Senator Campbell: Yes.
Mr. Giorno: It is always hard to give a short constitutional answer. If my report dealt with it, it would be this high. Generally, it is correct that the issue of civil contracts is within the exclusive jurisdiction of provincial legislatures. However, the question is what the nature of this prohibition is and if it is in pith and substance a regulation of the business of lobbying as applied to public office-holders, then it would be within the jurisdiction of Parliament — the House, the Senate and Her Majesty — to enact that sort of legislation, in my opinion. I do not know what the view of Department of Justice is, but I think it would be, as I said, constitutional for the federal Parliament to regulate the ethical conduct of federal lobbyists. That is all the contingency fee ban is about. It is designed to remove the financial incentive from lobbyists to do things they ought not to do because they have a personal monetary stake in the outcome of that for which they are lobbying.
Senator Campbell: You are saying that this should be expanded, not outlawed, and considered part of normal business, in the same way that you would receive a bonus if you do something well or are successful. You think it should be expanded. I may not have used your words properly.
Mr. Giorno: There are different types of contingency fees. If you ban one, you should probably ban them all. People who work as employees of corporations can receive contingency fees by receiving bonuses or receiving pay. The bill as worded does not cover them. There is probably no reason why they ought not to be covered.
The Chairman: Honourable senators, I will to turn to Senator Fox, who has a declaration.
Senator Fox: I want to put on the record that in the interests of transparency and to obviate the possibilities of any appearance of conflict of interest, I will refrain from questioning any members of this panel because Mr. Giorno and I have a relationship with the same law firm, he being a partner and I being counsel to that firm. I did not participate in any way in his memorandum nor was I consulted.
Senator Campbell: You would not recognize him?
Senator Fox: I thought Mr. Giorno would be more comfortable if I made that statement.
The Chairman: Thank you for that, Senator Fox. Senator Fox has declared a conflict. I will direct the clerk of the committee to record same in the minutes of the committee.
Senator Zimmer: Mr. Giorno, my question concerns U.S. lobby laws and their enforcement. In your submission, you say that the United States lobbying laws have not had a damaging effect on the lobbying industry. In Canada, no one has been charged with a contravention to the Lobbyists Registration Act. Could you comment on how the United States has fared in enforcing their lobbying laws?
Mr. Giorno: I cannot give you statistics but I know there are routine convictions under state and federal statutes, as well as criminal convictions for all kinds of misconduct. I do not have statistics. To date in Canada we have had two sets of multiple convictions, both in the province of Quebec. It is much more than two.
Senator Zimmer: My next question is for Mr. Pineau and Mr. Kelly. I have an interest in the arts because I have worked for many communities in the arts background, mainly as past president of the Royal Winnipeg Ballet. I am interested in your multi-year funding practices, which I read about in some of your material. With respect to federal grants and contributions, your organization expressed support for some of the Auditor General's recommendations. One of those is the adoption of a multi-year funding practice, which could be called a philanthropic practice. Such a practice would provide a more stable environment in which members of the organizations would operate, thereby decreasing turnover in staff and volunteers and allowing for other positive changes. As a result, you would be able to plan for the medium term. We went through the same thing at the Royal Winnipeg Ballet, where not being able to do mid-range planning led to a turnover in staff, management and dancers. The organization lost them because there was no employment security.
Can you share how you envisage a multi-year funding structure working most effectively? Once I have those secrets, I am taking them back to Winnipeg on Friday.
Mr. Kelly: When a contribution or grant is made for a period of time, perhaps three years, there are reporting periods built into the agreement with the funding body. Most of these organizations undergo independent audits each year. They have a volunteer board of directors with distinguished Canadians, such as yourself, overseeing the operation. If they fail to comply with any of the key elements of the agreements, the multi-year funding agreement is rescinded and they go back to a year-to-year basis.
You are right about the ability to plan and retain staff. One of the shortfalls of the current funding system is that it is difficult to predict beyond the fiscal year what will happen. In many of the performing arts, seasons are planned three or four years in advance but you have no idea what resources you will have to work with.
Usually, in order to fulfil their artistic vision, organizations economize on what they pay their staff. The professionals who work for these organizations are not paid as other professionals with equivalent levels of training and experience would be paid in other sectors. As we say about the arts, ``the money is awful but at least the conditions are lousy.'' Yet, we are able to maintain the highest growth rate in the Canadian labour force. We now have about 700,000 people a year who earn their livelihoods in the arts and culture sector despite the vagaries of unstable financing and the shifts in political currents that are part of our lives.
Mr. Pineau: The same theme was presented to the blue ribbon panel on grants and contributions last week, my allusion to having taken part in the voluntary and not-for-profit sector. The theme was long-term or predictable funding. People were suggesting anything from three to five years for certain kinds of organizations. Whether the arts or other organizations, such as health or children or sports, there is a certain level of predictability.
Currently, our organization is in a schizophrenic position. As I mentioned earlier, on the one hand I am a lobbyist but on the other hand our organization has been recognized by the government as providing a valuable public service. A sizable portion of our budget is funded by successive ministries, currently Canadian Heritage, and yet each year for 30 years of this relationship we start from scratch as though the organization had just appeared on the scene the day before. We are treated the same and go through the same hoops as everyone else. There should be a system that ensures a predictability, which is not, as my colleague was saying, contrary to accountability. We are quite prepared to report on a regular basis, but there must be something on the horizon to plan for. Currently, the opposite is true. Under the guise of being accountable for money spent from the public purse, money is largely wasted, in a sense, on administrative elements. The money is not used to the full benefit of what it is meant for. We currently spend about 25 cents of each dollar that we receive from the public purse on applying and accounting for it. Soon, another five cents will be added to that. Almost one third of the money that we receive from government is spent reporting on or asking for it. Is that a good way to spend public money? We need a system that is stable and that recognizes long-standing institutions.
Senator Zimmer: I agree with you wholeheartedly because the Royal Winnipeg Ballet is a very small company and has to travel the world to exist. They simply do not have enough performances in Winnipeg. As you rightly said, they cannot plan. How can you plan if you do not know whether you will be funded? I will take those insights back to Winnipeg and, if I may call you at some time, I would appreciate it.
The Chairman: Mr. Giorno, you were in the room when I asked the former commissioner a question about commercially sensitive information. I would appreciate the benefit of your view as an expert in lobbying. Will these disclosure requirements potentially compromise commercially sensitive information?
Mr. Giorno: It depends on whether excessively detailed disclosure is prescribed or if the extent of the disclosure prescribed is who you met with and what you talked about. ``Subject matter'' is not the disclosure of trade information or commercial information or anything commercially sensitive. To put it in a different perspective, businesses might talk to government officials all the time and actually share things that are commercially sensitive. However, the fact of a communication or the fact that you are dealing with government is not commercially sensitive. You might claim it as prejudicial and not want it disclosed, but not wanting something disclosed is not the same as the information's being commercially sensitive. I agree with Mr. Nelson's conclusion in that respect.
Senator Joyal: I would like to come back to the issue of the five-year ban. It seems to me that originally a cooling-off period was determined. We did that to avoid deputy ministers and ministers active in their portfolios doing an immediate turnover to the private sector as consultants on the subjects of their former portfolios. They would come back to their former departments to consult with officials that they formerly managed. Everyone understands why we want to avoid that practice. However, in wanting to avoid that situation, we can go to another extreme. By establishing it as a general rule with no qualification, we are not helping the system because we have to maintain some mobility between the private and the public sector.
Suppose someone who has been active in the transport field moves, for instance, into the arts community where there is absolutely no overlap of professionalism or experience. Of course, the person knows the government structure because he has been in public office, but that is certainly not someone we would want to bar for five years from joining and helping a non-profit corporation. If we wanted to maintain the appearance of transparency, we could ask that person not to be in contact with any level of government for maybe two years, especially if it is not in the sector in which he was active.
I understand that there is reason for the distancing, but there has to be some balance. The situation affects MPs and senators, especially if the government proposal goes through that Senators can be ``appointed'' at 40, be in the Senate for eight years and then go into the private sector. This bill would not cover MPs or senators. The objective of transparency would not apply in the case of an MP, but would apply in the case of a junior staff person in a minister's office who just happened to accompany the minister's luggage when he or she traveled.
There is some balance there. As much as we need to establish that arm's length distance for a cooling-off period, we do not want to bog the system down, to freeze the exchange between the public and the private sector. We do not want to deprive those people from contributing to not-for-profit corporations. Most people who have served publicly will be called to serve non-profits when they leave their public positions because they are known and they understand what is common good and they want to contribute.
Should we not review that ban and establish some kind of criteria to better reflect reality?
Mr. Ramsay: That is where the Canadian Society of Association Executives is coming from. It is vital to be able to renew the lifeblood in non-profit organizations. There are very few courses at university or in other educational institutions that prepare you for this sector.
In my own case, and I can speak most openly about that, I was with the Minister of Agriculture and Agri-Food and I worked on political material. I was considered an exempt staff and a political adviser. Then I moved into the transportation sector.
I had understanding and knowledge of how government works, how a minister's office works, and how to communicate public policy, but I had no contacts with transport, no personal contacts. From my standpoint I was going to a different sector altogether and it benefited the industry that I moved to.
Many people who move from government into non-profits move into a different sector. The organizations they move to, whether the arts community, industry professional institutes, or common interests, all require insight, all require people who have a minute amount of information about government, because the vast majority of Canadians and the vast majority of non-profit organizations have had very little experience with how government works.
Many members of those organizations have expectations far beyond what is reasonable. They think you should be able to talk a cabinet minister and get something changed within two weeks, literally. I had people new to the board of directors tell me that. They did not understand how the process worked.
It is not that we do not want transparency; we do. It is not that we do not want accountability; we do. It is about finding a workable mechanism that benefits all Canadians.
Mr. Giorno: It is a good question, one that I have heard before. As I was travelling here, a friend of mine, an industrial lobbyist, sent me a lengthy email in which he rebutted what I was going to say. He made the argument the Senator Joyal made. What about the benefit of the transfer of knowledge between the public sector and the private sector, back and forth, and are you not impeding that?
My answer to him will be the same as to Senator Joyal. Nothing in a cooling-off period prevents the transfer of that knowledge and people's moving back and forth; the cooling-off period only restricts moving back and forth to one type of position. It is a good thing for people to leave public service and go to corporate Canada. Corporate Canada benefits and our society benefits.
You can become a CEO, CFO or anything. You are restricted only from trading on a network of contacts you developed before, from lobbying. It is not a ban on moving to the corporate environment or to non-profit environment; it is a ban on lobbying.
Two more points about bag carriers. I think a well crafted law should provide for case-by-case exemptions or exceptions based on the level of responsibility, and I think Bill C-2 does that.
The next point I want to make is a sensitive one, because, like Mr. Ramsay, I have been a political staff member, as many people have been; we all know what it is like. We do have an unfortunate situation, even for the people involved. Individuals whose first job after leaving university is to work for a politician for several years. When they leave to go to the private sector they find that there are many corporations and employers willing to hire them not for their abilities but for what I call their network capital. That is unfortunate for them because it actually deprives them of the opportunity to work in industry, in different professions. It is also a matter of public importance because that network capital does not belong to those individuals; it belongs to the people of Canada. The individuals acquired that network capital in the service of the people of Canada, so Canadians have a right and it is quite appropriate for them to regulate how that network capital is used.
Senator Ringuette: I believe you were in the audience when I asked the previous panel a question regarding the balance of the five-year ban or cooling-off period for people from the public sector moving to the private sector and the reciprocal situation of people who have been working for a specific industry, corporation or sector moving into a public office job. We do not see that mechanism here. There is no balance in this bill in regards to the flow of people moving from the private sector to the public and the public to the private. I would like to have your comments on that.
Mr. Giorno: Mr. Nelson was right; the act does not cover that. The transfer of people from the private sector to government actually is a lot larger. The cooling-off period includes people going from government to a limited set of jobs in the private sector, being lobbying jobs, not other jobs, just lobbying jobs.
But your question, senator, really is about bias and perspective. That does not apply only to someone who comes from corporate Canada as a lobbyist; it applies to anyone who leaves corporate Canada as an anything and to anyone who leaves non-profit Canada as an anything. Everyone who comes to government brings a set of experiences and views and a past. It is a much larger issue to deal with the biases or perceived biases people bring when they join government from whatever their life used to be.
Senator Ringuette: Yes, especially if they become ministers and have the same portfolio that they were lobbying with.
Mr. Giorno: It is not simply a matter of someone lobbying in portfolio X; it is someone who was president of a company in area X or was the chair of a non-profit board. I do not know where you draw the line; that is why you are here as lawmakers and I am here as a citizen making submissions. It is a larger issue than one might think.
Senator Ringuette: Do you agree with the unbalance of the issue?
Mr. Giorno: No. I do agree that Canadians have a right to scrutinize past experience, views, or whatever is in their background that public servants or public officials bring to their jobs. However, I do not know that the issue should be a barrier. It certainly should be something considered by whoever is doing the hiring or, in the case of a minister, whoever is doing the appointing. That should be transparent to Canadians, but if we prevented anyone with a past from entering the government, we would have no one in the government except people with no pasts.
Senator Joyal: Mr. Giorno, on the basis of your answer, should we not include MPs and senators for a small cooling-off period? If the network of their knowledge of government belongs to Canadians, why would a MP leaving after X number of years, and having acquired within the system, as you said, a network, use that network while a corresponding assistant in a minister's office, who had a secondary level of security because he or she would not have access to cabinet documents but would be dealing with agendas or other issues, be banned on a comparative level? I think there is something illogical in your answer in relation to that.
Mr. Giorno: I do agree that Canadians ought to have an interest in how former elected officials and former parliamentarians conduct themselves after leaving office. Bill C-2 does not address that; I do not exactly know why. I think it has to do with the history of the code. It did not apply to parliamentarians because the Parliament of Canada Act and the House and the Senate had their own rules that dealt with that.
To the extent that this is a codification of what is in the post-employment code for public office-holders, it does not apply to MPs and senators. I think that is the explanation in the development of the statute as to why it is not there. Is it something that could be considered for inclusion in some statute? Yes. Is it something Canadians ought to have an interest in? Yes, because you can trade off access as a former MP just as easily as you can access as a former ministerial staffer or a deputy or a minister. Whether that goes into Bill C-2, I cannot speak to that. Certainly, it is something that is of interest to Canadians.
Senator Joyal: Mr. Ramsay, in the second paragraph of page 3 of your brief, you refer to a loophole in the bill. In- house organization lobbyists are required to record all registerable activities, with certain exceptions such as chance encounters.
We have all seen snow falling. It seems that the more you restrict access and you leave little dots here and there, the more people will go to that dot. That is human nature. Famous philosophers have reflected upon human nature. I will not quote them to you, but chance encounters will be an open door to put people in difficult and questionable positions. Should we not define ``an encounter that does not need to be reported?''
Mr. Ramsay: Again, that draws us into a philosophical question, as you quite rightly identified. From our perspective, it is impossible to delineate every specific circumstance in that. If we look at what is reasonable and what is balanced, then I am not sure we can identify every specific encounter because there are too many unique opportunities and, more important, I am not sure we should. Our argument was not so much that chance encounter is not defined, because it is not defined. The issue is more a question of how this impacts the free flow of information. How does it impact our institutions? How does it impact the ability of government to perform the public service?
We are all in favour of scrutiny and believe that scrutiny is important for Canadians, but scrutiny also entails the ability to be able to discuss on an open basis. We would argue that, yes, there should be scrutiny; yes, there should be transparency. But, no, there should not be a mechanism that would prohibit or ban someone from going there. Oversee them, review them, but do not ban them or prohibit them or have a five-year period.
The small organization I represents has a staff of nine. The vast majority of not-for-profit organizations employ in the neighbourhood of seven to nine people and have a $2-million to $3-million budget. The amount of work in this bill is phenomenal for organizations of that nature. Some representatives here are talking about large corporations. Large corporations have money that they can invest in meeting these requirements; small non-organizations do not. We are running pretty thin, and every time we have to report a chance encounter or a planned encounter, it eats into our resources.
I do not think we want to be overly concerned about every particular chance encounter that might arise, but just the opposite. We must, at one level, trust people. We must trust our parliamentarians; we must trust the people who work for our parliamentarians. The vast majority of the people in those positions are great people. They are doing the best they can under very difficult circumstances. It is unfortunate that the image left with the general public is that politicians, as a group, need to be controlled. That is not the case. It is the rare exception. Those exceptions are the ones we need to oversee in the public service, in the private sector, and everywhere else.
Do not make it so onerous on the rest of the us, especially the small guys, the small businesses, the small associations, the arts community, the non-profit community, and so on. This will give us a tough time. As I walk out the door today, I will shake my head and say, ``For non-profit organizations with fewer than 15 or 20 people, this is a huge kick in the face. It will hurt us.''
Senator Joyal: Mr. Kelly, would you agree that for non-profit corporations we could establish a criteria whereby public office-holders or former ministers or other people associated with the band could not, on a non-profit basis, lobby, say for a period of two years, with the departments or the agencies with which they were associated either directly or indirectly? Do you feel a period of two years would be sufficient to maintain the transparency and credibility that we want to achieve with this bill?
Mr. Kelly: That is a difficult question to answer. Although I said a few minutes ago that the cultural labour force is 700,000 people, the people who were involved in the business of arts policy and arts advocacy are a very small community. I have moved from government to the not-for-profit sector, back to a government agency and back to the not-for-profit sector. This is what I have done for last 30 years. My colleague Alain Pineau is in the same position. It is a very small talent pool, and you would not want to do anything to impede that movement and the exchange and development of skills. In fairness, if there must be a cooling-off period, it should apply to the arts, too. I think it should be a uniform measure that is put right across the board. Two years would not be onerous.
Senator Joyal: It would not impair your community to a point where it would create major problems or major stalling in the development of projects?
Mr. Kelly: In some positions, it probably would. For example, the director of Canada Council for the Arts will come from the arts community, with an extensive experience across all disciplines, usually. It would make that position pretty difficult to fill if somebody who was actively involved in the sector was prohibited from considering the job for two years. However, there may be other ways of dealing with it. I also do not believe in exceptionalism. If you are going to have a measure it should apply fairly across all sectors despite the limited difficulties it might cause in the arts and culture sector.
Mr. Pineau: There may be differences between, for example, the Canada Council, which is a granting agency, and the CRTC, which is a regulating agency. We and others have expressed in the past the great concern of the revolving door between certain sectors that are regulated. I mention the CRTC, but I am sure there are other regulating agencies.
Senator Andreychuk: This seems almost a seminar on not-for-profit organizations and their various dilemmas. I think the issues of multi-funding and staffing are important issues for our society. I am not sure they are quite under Bill C-2, but it is good for us to hear about them.
On the issue of regulations, I have been on this committee for many years, as Senator Joyal has, and we have expressed our concern that more and more is being put into regulations and not into the law. The rebuttal from previous governments was that they could not draft regulations until Parliament passed the bill. We were often told that when we asked how a bill would be implemented. We were also always given an assurance that there would be full consultation and openness, et cetera. This is not unique to Bill C-2; it is unique to the Western hemisphere, whether in Britain or elsewhere.
I wanted to restrict my questions to two areas. Mr. Giorno, you commented that there are many exceptions that could be made to the lobbyists and that if certain exemptions were put in place people would know how to manipulate them. They would know how to make the contacts and be within the rules. However, it seems to me that that is not what we are trying to get at in Bill C-2. We are trying to get at a culture that grows to understand openness and transparency and that the public has a right to know who deals with government. Therefore, it seems to me that the rules are there and we will have to try to live by them as we test whether we have got the right balances.
Mr. Giorno: I agree with all of that, senator. I was talking about a wording change, which is on the one hand simple but on the other hand very profound. It would make cabinet's job easier. As it stands now, the bill says that the monthly report will cover every communication of a particular, prescribed type. That means that the only things covered by that provision are those that cabinet decides are worthy of disclosure. That puts a large burden on cabinet to determine what ought to be disclosed when the very purpose of this bill is to shine light on an activity, to force the industry to come forward and disclose what is happening or disclose more information than is being disclosed now.
My concern is that cabinet, as a regulation-making body, does not know all the ways in which lobbyists seek to influence public policy. If cabinet is given the job with this clause passed the way it is, cabinet will have to pick the things it wants lobbyists to disclose, such as meetings, letters, and so on. My thesis, which is more than a thesis, is that — even cabinet and lawmakers would agree — that there are types of communications that will not come to the mind of cabinet as the regulation is being written and those are exactly the types of communications that ought to be disclosed. I use social interaction as an example: if it was part of a strategy to use social interaction as a form of lobbying, people would say it ought to be made transparent and disclosed.
My wording change was to say that everything gets disclosed unless cabinet prescribes that it does not have to be. That makes cabinet's job much easier. They will not focus on what they do not know and try to guess how lobbyists will conduct themselves. Instead, they will take the easier job of deciding what we do not need to hear about. They may decide that they are satisfied that we do not need to hear about emails and will exempt emails or routine mass mailings. Deciding what not to cover is an easer job and the result is a more transparent process, because that which is exempt is under the regulation — you can read it — and everything else must be disclosed, including stuff that otherwise would be hidden in the woodwork somewhere.
I agree with your premise, senator, but I think that particular wording change would be very useful and would help cabinet.
Senator Andreychuk: Would it not be harder then on industry and NGOs to anticipate each and every way they may interact? We know some of the problem areas. That is where I hope cabinet will go. If those areas correct themselves, they may not then be subject if a different culture arises. We have new technologies, and so on. Are we not going to the problem directly rather than using the broad brush? Will you fish with a big net and scoop up everything, or will you target where you know your problem areas are?
Mr. Giorno: I have a two-part answer to that. First, industries and non-profits both should and I think do know how they are communicating with governments. If witnesses before you are suggesting that this bill will require them to file information that they do not have, that is hard to reconcile with how I know corporations and organizations operate. They know to whom they are talking and when they are doing it, particularly when it is in their self-interest.
Second, I am concerned because, although it is not in the bill, there has been some talk in Ottawa and with groups, which Mr. Ramsay's submission indicates, that this is how the regulation will be worded. Apparently, there is a proposal to include only things that are planned. It was that proposal that got me thinking about the role of lawmakers passing a statute that gives regulation-making power. Covering only things that are planned leaves much out and creates great potential for abuse. Maybe the solution would be for the lawmakers drafting the statute to change the regulation-making power so that the regulation is not used that way. It was actually that example that led me to believe that prescribing the exemptions was superior to prescribing the coverage.
Senator Andreychuk: My law school professor told me that there is nothing common about common sense, and we see the world very differently. Give me the rule, I will abide by it; if I do not like the rule I will try to change it. To have to anticipate what you think is reasonable or acceptable puts me in a very difficult position. I understand where you are coming from. You think there is already some presumption of how that definition will work.
Mr. Giorno: I think so. Nobody has said that officially, but I have seen it come from briefings and things like that.
Senator Andreychuk: Mr. Ramsay, 30 years ago I spent time in the not-for-profit sector with many NGOs. We used to debate service delivery: Do we have to meet the same standard as the government or a corporation? As we carried on for years discussing that, the public said it does not care whether service delivery comes from an NGO or government. It wants a particular standard of care that it can rely on, and the not-for-profit sector had to adhere to that and adjust, with great difficulties.
My concern is that you are into a position of being able to lobby, to dispense that information. I thank Mr. Giorno for reminding us that only those who will occupy themselves with lobbying cannot go into NGOs. The rest can go and do the good work that NGOs do.
What about the argument that you are a pretty sophisticated NGO if you belong to your association? A lot of the NGO not-for-profit activity is grass roots and volunteers, and they often look at you no differently than they do corporations, and they say you are getting the ear of the minister or the department because you are well organized, sophisticated and know how to do it. However, the real voluntary activity is out there in the small towns.
One of the complaints coming from Saskatchewan is that it is a done deal in Ottawa, and unless you are a branch of an NGO in Ottawa, your voice does not get heard because more and more governments are turning to the stakeholders and to the not-for-profit. It is now the buzzword in there.
The real voluntary activity is precluded, and why should you therefore be treated differently? How do you respond to that?
Mr. Ramsay: First of all, I would not want to be treated differently. I do not think we are asking to be treated differently. We are suggesting that it be fair and equitable across the board.
I will give you a few examples. I grew up on a farm. We would go to somebody's 50th wedding anniversary because we all lived in the community, and the member of Parliament would show up, sometimes along with a cabinet minister, and we would all say hello and tell him our problems with agriculture this year, and that would be lobbying.
You are absolutely right. The smallest groups will be affected most by this proposed legislation. The fair board will be affected if it goes to its member of Parliament for funding. They will have to start reporting that. The safety council in your local city will be affected. They might all be volunteers; many of these groups are all volunteers with no paid staff. They are affected by this.
We are lucky. We are a trade association and we have full-time staff. The vast majority of non-profit organizations do not have full-time staff. The rural agricultural fair board, the small-town safety committee that needs money to put up a playground or safety signs and so forth — those are the people who will be most affected by this bill. It is important to understand that. Many of those organizations have only part-time people; many of them have no people. Yet, if they make a presentation to get funding because they need something new for their local community, then they are affected by proposed legislation.
The effect will be that people will not know what they should be doing. Most of these people are good, honest people. They are not there to get $50,000 for themselves. They are there to get $5,000 for their local community. That is all they want because they can do good things with that $5,000.
Yes, make sure it is transparent. We agree 100 per cent. Make sure everyone is accountable, but please be sensitive to the impact that this has on the small organizations, the non-profit sector, the arts community and the community groups. They are the ones most affected by this bill. Large corporations have lots of people and expertise and can hire consultants. They are not affected by this.
When I was growing up, the MP came to my mom and dad's 50th anniversary. Because I was there, I would have to say that was contact. These are the sorts of things you need to be aware of.
Senator Andreychuk: Under the bill, it is not contemplated to touch those people. They are not full-time lobbyists.
Mr. Ramsay: However, I would be.
Senator Andreychuk: That is the point I was trying to make. This bill touches people like you, not the person who was contacting his MP.
Mr. Ramsay: With respect, many people will in there for different reasons. Obviously, I did not explain myself very well. If you are a member of the fair society that wants something locally from your MP or cabinet minister, then there is a ripple effect amongst all of those people,
Senator Andreychuk: That is the point I was trying to make. There is a voluntary sector. There are people contacting. Mr. Giorno's point is that the right to get to your member of Parliament is important, but not-for-profit corporations and registered lobbyists are in a different dimension.
Mr. Ramsay: That is fair enough.
Senator Andreychuk: You were putting yourself together with that grassroots activity. I was trying to make distinction between your association and those grassroots groups. In many ways you are closer to a corporation. That variance exists within the voluntary sector, and there is debate about who will be touched, sitting at that table. However, with this bill, perhaps the grassroots people will know better what you are doing and be in a position either to support you or to distance themselves from you and put their own message forward better.
Mr. Ramsay: You are right. I sit on several boards of directors of community groups as well, and I was speaking from that perspective.
Senator Day: We have received literally thousands of letters from small, not-for-profit organizations that are extremely concerned about this proposed legislation. They express exactly the same concerns you have. I am wondering, Mr. Giorno, whether you are able to help us here because you were shaking your head when Mr. Ramsay was speaking about this. Is it a false concern out there?
Mr. Giorno: I was shaking my head on the issue of volunteers because neither the act as it is now nor as the act is proposed to be amended covers volunteers on that narrow issue.
Senator Day: Would the minister who visited the small community put in his report that he was asked by a small farmers' organization to do something?
Mr. Giorno: As the act is drafted now, the minister would not report. The farmer would not have to report.
Senator Day: What about the small not-for-profit group?
Mr. Giorno: If the small not-for-profit had an employee.
Senator Day: Or a member of the board?
Mr. Giorno: It is only if the member of the board — paid more than reimbursement for expenses.
Senators have to determine whether it is the right line or wrong line, but the way the line has been demarcated in every Canadian jurisdiction, with the exception of City of Toronto with its proposed new bylaw, its proposal is payment. Whether it is employment payment or consulting payment, that is the line of demarcation. You can say it is right or wrong, but that is the line drawn in every Canadian statute so far and that would continue under Bill C-2.
Senator Day: Therefore, are all these letters we are receiving raising a false concern?
Mr. Giorno: Not-for-profits often have staff members. Therefore, it would be the staff members, not the volunteer board members, who would be covered under this bill, although a volunteer board member might be concerned about the implication for his staff member.
Senator Day: Many of them do not have paid staff; what about those groups?
Mr. Giorno: They would not be affected by it.
Senator Day: No concern; that is very helpful.
Mr. Giorno: No concern, but there is a very tiny issue. It is not in the proposed lobbying act; it is actually in the Conflict of Interest Act. The only application of Bill C-2 to volunteers is in the Conflict of Interest Act, where a former reporting public office-holder cannot go back to his own department or agency for one year and make representations, even for free. The only implication for a volunteer is that section, which is not even in the proposed lobbying act.
The Chairman: The Lobbyists Registration Act applies only to paid lobbyists who communicate with federal public office-holders on behalf of a third party.
Senator Day: Are you reading from something?
The Chairman: It is the Library of Parliament's interpretation of the Lobbyists Registration Act.
Senator Cowan: I would like to follow up on the point that the chair was making. Talking about lobbyists' remuneration, I think the intent in proposed new section 10.1 is to prohibit contingency fees paid to third parties, to outside consultants and not in-house lobbyists. Is that correct?
Mr. Giorno: That is how the section is drafted, yes.
Senator Cowan: I am thinking about universities and research institutes. For example, the president of a university might be setting objectives for a year and say one of the objectives would be to qualify for this particular research grant to increase research funding by a certain level. The president would perhaps have other people involved in this, but he or she would be involved in the representations, and the bonuses and that sort of thing at the end of the year might be contingent upon meeting certain objectives. That is not covered by this.
Mr. Giorno: That is correct.
Senator Cowan: It is only if the university, the research institute, the symphony or whatever was to hire an outside consultant who would be required to file reports under subsection 5(1).
Mr. Giorno: That is correct, senator, although my proposal would be to cover that president, and senators may have their own views of whether that is right or wrong. I will simply point out that the principle of abandoning success fees is that, because lobbyists are involved in a public policy process, they have an obligation as they come to government and advocate to be fair, objective and honest in their dealings. That is all set out in the ethical code; but the public policy rationale for a ban on success fees is that where the lobbyist has a financial stake in what he or she is advocating, that compromises his or her objectivity and is in conflict with the duty to be fair, honest, objective and above board in dealing with government. Therefore, that incentive to be otherwise is removed. My point is, if that is the rationale — and I believe it is — it does apply to employees as well.
You used the example of a university president. As with any in-house lobbyist, what is being advocated or lobbied for is either a public policy decision or the expenditure of public dollars, or both. That may be different than the president of Inco or IBM or Coca-Cola and how he is remunerated by his board, or it may not. That is up to senators and members of the House of Commons to judge.
Senator Cowan: The same would apply to the president of the Royal Winnipeg Ballet. You might say if you can achieve these objectives, if you can secure this type of funding, that would be a measure of your success and we would compensate you accordingly. I can see the arguments both ways.
It seems to me that it is reasonable; perhaps it is the disclosure of it. You could argue that if you disclose the fact that it would be one of the criteria applied in determining the performance of the executive, there is nothing wrong with that.
Mr. Giorno: That is an excellent point, senator. Right now, it is not disclosed. Right now, a consultant lobbyist must disclose that, and soon that would be banned under Bill C-2. However, if the president of the university or the ballet goes to a minister of the Crown and advocates for more money, right now the minister of the Crown does not know whether the president is advocating for the good of the organization only or the good of the organization plus a financial incentive at the same time. In my view, that certainly would be an appropriate thing to disclose.
Senator Joyal: It is not covered under this bill.
Mr. Giorno: Neither the current bill nor Bill C-2.
Senator Day: I really appreciated your comment earlier; it saved me a lot of time. We have received many letters from smaller not-for-profit organizations. I took a look at the website for the Canadian Conference of the Arts. I see where you have made some very good comments; and one was to get all your members to write to their friendly senators. I can tell you that has worked. I congratulate you on that, and it is good that you are here to try to sort this out for us.
In terms of the cooling-off period, there is not an agreement between the two organizations. You could live with two years, going to five; you would rather have nothing, but you could possibly live with two years. We are looking for compromise here. We would like to improve this bill if we could, but we understand your special, peculiar needs and we want to try to meet them to the extent that is possible.
On page 74 of the bill the word ``prescribed'' appears two or three times, 9.1(1), in 9(3.l); and you pointed out that it appear back on page 70 as well.
The bill as it currently exists talks about the registrar's doing certain things in terms of prescribing the form for the reports. It does not say in the regulations. Typically, you would see in a bill, ``in the regulations,'' so I am assuming that these words relate to what the registrar, soon to be commissioner, is doing as opposed to in the regulations.
Mr. Giorno: I came to a different conclusion. Right now, section 12 of the act, which is unchanged by Bill C-2, contains a standard provision that says that you can make a regulation prescribing anything that ought to be prescribed. That is a very general statement that is not unique to the Lobbyists Registration Act.
Senator Day: It is subsection 12 (d) in the regulations in the current Lobbyists Registration Act:
prescribing any matter or thing that by this Act is to be or may be prescribed...
That picks that up and brings it into the bill that will amend this act. You believe that is regulation and that is the concern.
Mr. Giorno: That is exactly my point. You were particularly referring to the time, the form and the manner of giving new information or clarifying or correcting information. I know that the Treasury Board officials have said they mean the commissioner, and they could be right; but I think by virtue of section 12, they have actually ended up meaning cabinet.
Senator Day: In section 9, the registrar, which will soon become the commissioner, has powers to determine the manner of a registry and that kind of thing, so there is some confusion.
Mr. Giorno: That is correct. I do not think the power of prescribing, which is a technical term of art used in many statutes, is given to the registrar and/or the new commissioner. If I am correct and it is only cabinet power, then in order to be consistent with what the government intends, that section needs to be tweaked to make clear that the commissioner is the one who is telling people the manner, the form and timing of their corrections and clarifications.
Senator Day: If we stop using the word ``prescribed'' and picked up one of the words in section 9, we would achieve that.
Mr. Giorno: I would say yes but go even further and say if you actually refer to the commissioner there, there would be no doubt at all.
Senator Day: That is very helpful. Thank you.
Senator Stratton: I want to ensure I understand where you are coming from. If a volunteer board lobbies government, an MP, a cabinet minister or whomever, they are not caught under this because they do not get paid; but the CEO or president of the organization, who does get paid and who does lobby, should be a registered lobbyist. Would you not agree with that? I would not see anything wrong with that, nor do I think the Canadian public would see anything wrong with that, because that is the point of this.
I see nodding of heads. Essentially, you are in agreement with my two points.
The government is seeing fit to extend it from two to five years, which is what this is all about, to a large degree. In their minds there is a reason for this, and that is that they have found that the two-year cooling-off period is insufficient because governments last for significant numbers of years. As such, someone who has been working for a minister can leave and within two years know a fair number of people; in other words, their connections are still quite strong. You can see why the new government is thinking of this, because of that issue.
If you can tell me how we get around that fundamental problem, I would be delighted, but I cannot see how you can do that because that is the real concern out there.
Mr. Giorno: I support five years.
Mr. Ramsay: I can make a suggestion. This bill is very large and complicated. That is one of the stumbling blocks we all have in the non-profit sector, dealing with the totality of it. We have to drill down on things that affect us most. From our standpoint, there are ways of dealing with that. One suggestion is to say that people who leave the government and then lobby cannot deal with the department or agencies with which they were employed. Then they cannot necessarily rely on their contacts but still have the opportunity to move into the not-for-profit sector to benefit Canadians as a whole.
There is a very broad area for agreement amongst the arts community, the non-profit sector, the government, to find a solution to this. Many good people work in government and they want to do the right thing. We should not close the door to them. Let us find a way to keep that door open, but also to protect the public interest.
Senator Stratton: My last question is to Senator Day. You said to us that you have received more than 1,000 letters.
Senator Day: That might have been hyperbole.
Senator Stratton: I will stop there, Senator Day.
Senator Day: May I ask a follow-up to the second-last question? I want to understand the amendments to in-house lobbyists, which is under section 7. There are different registration requirements for consultants paid to lobby on behalf of someone else. The in-house lobbyist is where we are at. It seems to me that it is the corporation or the organization that is registering as opposed to the employed individual.
Mr. Giorno: I can help clarify that. Since 2005, when the last series of amendments was proclaimed in force, nothing new in Bill C-2, corporations and organizations have been treated the same. That is, the report comes not from an individual in-house lobbyist but from his or her CEO, the executive director or the senior person in the organization or corporation.
Senator Day: That is the officer responsible for filing.
Mr. Giorno: That is the officer responsible for filing. That person files the report and it is seen as a corporate or organizational responsibility. The people named in this are the lobbyists.
Senator Day: That is the person who is employed to lobby.
Mr. Giorno: It could be the CEO or the executive director as well in his or her own report. The cooling-off period and prohibitions on lobbying are applied based on the employees who are actually doing the lobbying, not in the name of the top officer who is signing his or her name on the report, unless he or she is actually lobbying.
Senator Day: We had a suggestion earlier that there may be seven, eight or 10 people in a not-for-profit and combined they have the required 20 per cent time, so is it correct that all of their names get listed on there?
Mr. Giorno: That is correct.
The Chairman: The commissioner gave the example of Shell. He said there were 42 names on the list.
Senator Day: Shell would be a different kind of organization. We are talking about not-for-profit organizations here.
The Chairman: Gentlemen, on behalf the committee, we appreciate your taking the time to come here and give us your views on Bill C-2.
The committee adjourned.