Proceedings of the Committee on
Rules, Procedures and the Rights of Parliament
Issue 5 - Evidence of February 12, 2003
OTTAWA, Wednesday, February 12, 2003
The Standing Committee on Rules, Procedures and the Rights of Parliament met this day at 12:07 p.m. to examine proposals to amend the Parliament of Canada Act (Ethics Commissioner) and other acts as a consequence and proposals to amend the Rules of the Senate and the Standing Orders of the House of Commons to implement the 1997 Milliken-Oliver report, tabled in the Senate on October 23, 2002.
Senator Lorna Milne (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, we have before us as a witness today Mr. Mark Audcent, our Law Clerk and Parliamentary Counsel. Mr. Audcent has informed me that his opening remarks will take about 15 minutes, after which we will proceed to questions.
[Translation]
Mr. Mark Audcent, Law Clerk and Parliamentary Counsel: It is a pleasure to appear before you. In order to prepare for this meeting, I reread the presentations I made before previous committees who dealt with the same subject. On March 24 1992, I appeared before the Stanbury-Blenkarn committee; on April 26, 1993, before the Special Joint Committee on Bill C-116; and on September 28 1995, before the Oliver-Milliken committee. A lot of what I am going to say has already been presented to these previous committees.
[English]
For that reason, I particularly thank you for affording me to opportunity to share my perspective on the study before you. I would like to begin by situating that perspective gathered over 20 years.
In providing conflict of interest advice to senators, I act as your legal counsel. I treat each senator as a separate client and give legal advice on a solicitor-client basis. The exchange is privileged, and the privilege is the privilege of the individual senator. I only give advice to those who ask. I never offer advice proactively. My experience is that senators usually approach me and make their resulting decisions out of a motivation to be ``squeaky clean,'' to quote one senator, and not in order to get away with something.
Over the years, many senators have found it convenient to disclose the details of their private affairs to their own private sector counsel and have me brief that person on the law, who is then in a position to give the senator the best possible advice.
In the debate in the senator chamber, reference was made to the first-day welcome senators receive in the clerk's office. Many senators, in fact a majority of you by now, have experienced that welcome. The formula does not vary. The clerk greets the new senator, after which he invites me, together with the directors of finance and human resources, to address the new senator for a few minutes.
The clerk initiated this procedure when he assumed office out of a concern to emphasize selected key messages. In my few minutes, I always raise the subject of conflict of interest and the need to immediately address all potential conflicts, since the law is as currently exists contains no transitional provisions. I also stress the need to be vigilant at all times in the future with respect to conflicts of interest, and my availability to senators.
[Translation]
As a Senate official, it is my duty to communicate to the media and the public the laws and rules that dictate the conduct of senators, which are public documents anyway. However, I provide no interpretation since this would mean giving a legal opinion.
[English]
Conflict of interest is a multi-faceted issue with legal, procedural and political dimensions. Under current practices, I give the legal advice. I also advise senators on procedural matters, but remind them that it is the procedural clerks who advise the Speaker and the committee chairs.
The most important dimension of conflict of interest is the political dimension, and it is not my role to give political advice. When I see an optics problem, as opposed to or in addition to a legal problem, I may discuss it with the senator, but always conclude with the suggestion that the senator consult with his or her colleagues and leadership for a headline test or a smell test. It seems to me that it is for this dimension of conflict of interest and ethics that an ethics counsellor can bring value-added to your current practices.
The Senate has referred to you a package composed of a draft bill and ethics code. The package would consolidate, codify and modernize the rules that govern you in the areas of conflict of interest and provide an infrastructure to support senators in satisfying their obligations under the Code.
[Translation]
Codification is a normal phase of rule-making. A law is first of all a response to an issue raised by a specific case. Over time, the principles that underlie decisions aimed at solving specific cases become apparent. Ultimately, these principles get entrenched as written rules residing in different places and, when these rules become numerous, it is normal that one would try to consolidate and codify these individuals rules. The Canadian Charter of Rights and Liberties is but one example of this modern trend towards consistent written laws.
Looking ahead, the distribution and use of documents in electronic format will be a new aspect that will need to be taken into account when deciding format and content. You may wish to consider whether technology offers new possibilities or presents new threats.
[English]
Change always offers opportunities and poses threats. I believe that the proposal to reform the existing regime offers you many opportunities. There is the opportunity to enhance your public image and that of the Senate. There is the opportunity to document your right to have a private life and carry on your personal affairs. There is the opportunity to have clear rules that you can easily access and understand. There is the opportunity to have an infrastructure that can support you better than at present, in particular with the certainty of one-stop shopping and binding opinions, and also with the benefit of peer review. Finally, there is the opportunity to replace existing laws that are obsolete, arcane, unduly restrictive and even dangerous. For all these reasons, I think that you can approach this study with hope that you can create a better system.
Of course, there are threats too. The first and biggest threat I see is duplicating the rules by adopting new ones without repealing the old. A new regime must replace the old with the new, rather than duplicating and overlapping your obligations. A second threat would be to have competing infrastructure. You do not want senators not knowing whether they should turn to the ethics commissioner or to the law clerk for advice, or getting conflicting advice from different quarters, for that matter. Enforcement is a different matter. It should be one-stop shopping for professional advice on ethics, whether embodied in law or the rules. Other threats would be a rules system that is too detailed or a compliance system that is too onerous.
With these general thoughts in mind, I turn to the package. It proposes rules that are to be internal to Parliament. I consider this to be an excellent feature that is in the public interest. You have even had some discussion on whether the rules should not be internal to the Senate. This is another option. However, what concerns me is that, while the new is to be internal to Parliament, much of the old remains. With respect to the senators, I refer you to section 16 of the Parliament of Canada Act and to sections 119, 121 and 122 of the Criminal Code.
Let me begin by saying that I think that section 119 of the Criminal Code is a section fairly and properly applicable to parliamentarians. Section 119 prohibits corruption in office, which is generally accepted to be a crime. In my view, if a senator is investigated and charged with corruption, other senators would want that matter before the courts.
It is the other sections of the law that I mentioned that I do not think should continue to apply to parliamentarians in parallel with the proposed code of conduct.
Consider section 16 of the Parliament of Canada Act. Basically, it prohibits a senator from selling his or her parliamentary services. Is there an ongoing need to have section 16 in the law? If the member is corrupt, the matter is criminal, and section 119 applies. If the member is not corrupt and the matter is not criminal, why is the prohibition being left in the Parliament of Canada Act to be addressed in the courts? Would it not be best to incorporate a prohibition of this nature into the new code of conduct, which, after all, is supposed to consolidate the rules?
I turn to my biggest concern. By ``judicial interpretation,'' senators are considered to be ``officials'' for the purposes of Part IV of the Criminal Code. As officials, they are subject to sections 121 and 122 of the Code. Section 121 contains many offences, but its main thrusts of concern to senators are a prohibition in paragraph (1)(a) against officials receiving a benefit for any act or omission relating to the transaction of government business, and a prohibition in paragraph (1)(c) against officials receiving a benefit from any person who has dealings with government.
It is my view that Parliament never intended sections 121 and 122 to apply to parliamentarians. Francophones will appreciate how difficult it is to conceive that Parliament was thinking of parliamentarians when it used the term ``fonctionnaire.'' In the words of Mr. Justice Falardeau, who was the first trial judge in the case of The Queen v. Cogger in 1993:
[Translation]
It seems almost incongruous that a senator should be considered as a government official. How could a member of the legislative branch be considered as being the same as an official or an executive?
[English]
In my view, Parliament intended section 119 to apply to parliamentarians and judges, and sections 121 and 122 to be the equivalent provisions for public servants. To be guilty of a criminal offence, parliamentarians were to have been corrupt. Public servants, on the other hand, were to be subject to a rule that did not require a corrupt mind, but which provided an opportunity for exemption from otherwise prohibited conduct, with the written consent of the head of the branch of government of which the public servant is an official.
I invite honourable senators to examine this question carefully, because, in my view, the scope of section 121 is dangerously wide. I recommend that you read the 1996 decision of the Supreme Court of Canada in the case of R. v. Hinchey, a leading decision on paragraph 121(1)(c).
Speaking for the minority, Mr. Justice Cory suggested that it was important ``...not to encompass conduct...which no reasonable member of the community would regard as blameworthy.'' Madam Justice L'Heureux-Dubé, speaking for the majority, rejects this approach. Coming from the perspective that the purpose of section 121 is not only to protect the integrity of government, but also the appearance of integrity of government, she concluded that Parliament has explicitly stated that damage to the government's integrity can also occur where benefits are received by officials even where no ill will existed. It is for this reason that the net in section 121(1)(c) was cast so wide. No corrupt intent is required.
It is interesting that Madam Justice L'Heureux-Dubé's approach is informed by her view that this section offers a simple, complete and exonerating defence to any government employee. In her words, the section offers an easy solution to any employee concerned about the propriety of his or her conduct. All the person must do to be completely absolved is to get the consent of his or her superior in writing. However, who is a senator's superior? Coming back to the words of Mr. Justice Falardeau, in The Queen v. Cogger:
[Translation]
If the legislator had intended to consider a senator as an official, to what head of what branch of government that employs him or off which he is an official would that senator go to ask permission to accept a benefit or advantage from someone who deals with the government in order to be safe from charges under paragraph 121.1(c) of the Criminal Code?
[English]
In my view, a simple amendment to the definition of the word ``official'' in section 118, providing that it does not extend to parliamentarians or judges merely by virtue of their seat, would suffice to make the needed correction to the law.
If the reform package as tabled is adopted, but section 16 of the Parliament of Canada Act or sections 121 and 122 of the Criminal Code are left applicable to senators, I would suggest that you consider the advisability of tasking the ethics commissioner with respect to advising on them. Since they are law, the advice should be not only ethical, but legal as well. Otherwise, a senator who has consulted the commissioner might easily be mislead into thinking that the ethical advice received is in compliance with the law when it has not been examined for that purpose.
I note that, at present, there is no requirement in the draft bill for the ethics commissioner to be a lawyer, and section 27 of the draft code of conduct seems to limit the obligation of the ethics commissioner to advice respecting a parliamentarian's obligations under the code. Since my sense is that any ethics commissioner would prefer to limit himself or herself to giving ethical advice, we return to the solution of removing the prohibitions from the law and placing them in the code where they can be properly administered and knowledgably enforced.
Honourable senators, I wish to address one further section of the existing law because it is the subject of much advice. I refer to section 14 of the Parliament of Canada Act.
Section 14 was first enacted in 1878 as part of an act further securing the independence of Parliament. Its original purpose was to prevent the executive from being able to purchase the support of parliamentarians with public money contracts.
Interestingly enough, the bill as introduced would also have prevented senators, as well as members of the House of Commons, from holding incompatible offices under the government. However, with respect to senators, that provision was removed before enactment. Let me quote from an opinion given in 1971 by a predecessor of mine, Mr. E. Russell Hopkins. In an opinion that does not disclose the fact situation being considered, he concludes:
No restriction or limitation on the acceptance of offices of profit under the Crown is imposed upon Senators whose disqualification is left to the determined by Section 31 of the B.N.A Act itself. It would follow that a Senator would not be disqualified either under the B.N.A. Act or under the ``Independence of Parliament'' provisions by reason of his acceptance of an office of profit under the Crown.
Coming back to section 14, it still reads today much the same as the day it was enacted. It provides:
14. No person who is a member of the Senate shall, directly or indirectly, knowingly and wilfully be a party to or concerned in any contract under which the public money of Canada is to be paid.
[Translation]
14. No person who is a member of the Senate shall, directly or indirectly, knowingly and wilfully be a party to or be concerned in any contract under which the public money of Canada is to be paid.
[English]
Note that the prohibition is against being a party to or concerned in a contract. If public money is being paid under the contract and a senator is concerned in the contract, the prohibition is breached whether or not the senator receives a personal benefit. Put another way, receiving a personal benefit is not an essential element of the offence.
In 1979, the Supreme Court of Canada, in the Wheeler case, decided that a director or officer of a company was, ex officio, in other words, from the very fact of holding office, concerned in that company's contracts and in its success. In the words of Mr. Justice Estey in that case:
It is unrealistic to believe that as a general principle of human conduct a director or officer of a contracting company does not have at least an indirect interest in the company's contracts.
It seems to me that the same logic applies to partners in partnerships.
By accepting the office of director, a person accepts the duties of that office. I can find no reason in law to differentiate between one director's duty to a commercial firm and another director's duty to a non-profit organization.
The result is that when section 14 and the Wheeler case are read together, senators are prohibited from being directors, officers or partners of organizations that have contracts under which government money is paid. Senators can, however, structure their affairs to act as consultants to commercial enterprises, except with respect to their government dealings, or to act as voluntary patrons of charitable and other non-profit organizations that receive government funding.
On another plane, I note that the draft code continues the blanket prohibition against contracts with the government. Honourable senators might want to reflect on this. A prohibition on contracts with the Senate, or with any parliamentary institution for that matter, makes great sense. After all, senators run the Senate. However, in the 1980s, there were over 80,000 suppliers to the government. Presumably, there are over 100,000 by now. Government is a huge part of our economy. Is it necessary to exclude senators from all that activity, all the time, in all circumstances? It may be, but you should ask yourselves the question. I can see why the Senate cannot rent premises from a senator or the senator's holding company. It is harder to understand why some government department cannot rent such premises.
Honourable senators, let me terminate my opening remarks with the following point. Reform of the law in this area has been under active consideration without success for 30 years now. This suggests to me that you may wish to view the draft bill and the draft code in different lights. Change to the law in the future may be difficult. For this reason, it is very important to get the law right.
However, while rules are stable, change in response to evolving situations and developing needs is possible. This enhanced flexibility may give you some comfort with respect to the code.
I would be pleased to answer your questions.
The Chairman: Thank you, Mr. Audcent.
Senator Stratton: Mr. Audcent, you raised an interesting point earlier. I consulted with you about being on a board in a volunteer capacity of a start-up pharmaceutical company. As it had the potential of receiving federal money, your advice was that I should not be on that board, and I am not.
I need clarification, because this affects us all dramatically, about serving in a voluntary position on a board of a voluntary organization. In your opinion, does the same rule apply if it receives federal funding?
Mr. Audcent: In my view, the first part of the prohibition is to be a party to a contract with the government under which public money is paid. If it is a corporation, you are not the party, the corporation is.
The second part of the prohibition is to be concerned in the contract under which public money is to be paid. The Supreme Court of Canada said that the director or officer of a company is concerned in the affairs of that company. Would we expect any less from the directors of our national charitable organizations than we do of our directors of commercial companies? No. They have a duty of loyalty to their company. They have a duty to promote their company's interests. They have all the normal duties that we associate with being a director.
If you have those duties, whether it is for a commercial company or for a non-profit company, it seems to me that you are concerned in your company's contracts. If that contract is with the government and public money is being paid, you are arguably caught within that section.
Senator Stratton: That is a rather bleak outlook for those of us who do put in a large amount of time, voluntarily, with non-profit organizations.
Mr. Audcent: I think it is important to realize that there are ways to do it.
Senator Stratton: Could you perhaps let us know what those ways are so that the public and senators understand clearly what those are?
Mr. Audcent: In my view, the problem is that you cannot be a director or officer because that office brings with it rights and obligations. That is what makes you concerned. As long as you are not a director or officer, there is nothing to stop you from working with the charities with which you are concerned. If it is useful to the relationship, you can become a patron or honorary patron of the charity, but I think there is a problem if you are actually holding an office with the legal rights and legal obligations associated with the office.
Senator Di Nino: I have two questions. One is a follow-up question to Senator Stratton's interjection.
I heard you say, ``regardless of whether there is any personal gain or benefit.'' I always assumed that that was part of the underlying purpose of the legislation dealing with conflict of interest. I should like it clarified, because I am on three boards receiving money from the government. They are all volunteer organizations, and now it appears that I am in deep trouble. I want to put that on the record. What I hear you saying is that, regardless of whether the individual receives a benefit personally, the individual is still caught by this legislation.
Mr. Audcent: That is my understanding. The concept of personal benefit forms some of the Criminal Code provisions. You shall not receive a personal benefit. In section 14 of the Parliament of Canada Act, the prohibition is against being concerned in a contract. It is not against receiving a personal benefit.
Senator Di Nino: ``Concerned'' means being either an officer and/or a director, not both?
Mr. Audcent: It includes being a principle — a principle, officer or director.
Senator Di Nino: Thank you for that.
The other question that I have deals with relationships, family relationships and others. If, for example, a senator's brother, spouse or son or daughter happens to be on the board of a for-profit corporation, what are the implications of that as it relates to this discussion?
Mr. Audcent: I do not think that I am in a position to answer that. I have had a few questions in that direction over the years and I struggled with them enormously. The best answer I can probably give you is: I do not know the answer. The last time a case under section 14 went before the courts was in 1942, and it was in respect of a period where the person ended up not even having been a senator, so it not a very informative case. I do not have any jurisprudence to inform me, and I think the best answer I can give you is that it is a problem.
Coming back to the issue of personal benefit, section 14 has been opened up for you because it has been moved from the act to the code, which means that you are in a position to insert that element, if that is what you believe to be reasonable.
Senator Di Nino: It would be interesting to get an opinion on the second question. Obviously, I agree with our law clerk that the issue of personal benefit should be something that we should be looking at, to allow those who wish to make contributions to not-for-profit charitable organizations to continue to serve if the organization so wishes without being caught in this. I am also concerned about the second issue. If our law clerk cannot answer that question, we should look for some answers elswhere.
The Chairman: May I suggest that perhaps we should concentrate a little less on what the present provisions are and look to what the proposed code says? As I understand it, the words ``or concerned in'' do not appear in this proposed code's provision on government contracts. Would the situation be different if this code were in force?
Mr. Audcent: That is quite right, Madam Chair. It says that a parliamentarian must not knowingly be a party to a contract with the Government of Canada under which the parliamentarian receives the benefit. It states further that you must not have an interest in a partnership or a private corporation that is a party to a contract with the Government of Canada.
The Chairman: The words ``or concerned'' do not appear; is that right?
Mr. Audcent: They have been deleted. That is right.
Senator Grafstein: I had cause to speak to Mr. Justice Estey about this decision. It troubled him deeply. It is not fair to put words in a man's mouth when he is not here to defend them, but let me take you through the argumentation and see whether or not we can work our way out of what I think all senators perceive to be an invidious situation. What is the invidious situation? There is not a senator who is not active in a volunteer organization. As a matter of fact, that type of responsibility is demanded from time to time from various organizations in our communities.
If you go back to the Fathers of Confederation, the role of the senators was very clear. Senators were not to be elected but appointed so that they could, in particular, involve themselves deeply in the affairs of their region and community. That was, in effect, part of the whole notion of having an appointed Senate.
Again, the senator was not to use that particular position for his own ``personal benefit.'' There is no question about that. There are some questions as to how it applies to the question of officials and so on, but for the moment let us set that apart.
Here we are in the modern era, where there is not a senator or his family who is not deeply involved, both as a donor and as a volunteer, in the volunteer sector. To somehow put senators in a position where the work that is being demanded of them by their community and in which they wish to participate into some type of grey area is, to my mind, inconsistent with the establishment of the Senate.
I note, for the purposes of the record, that the witness is nodding.
Mr. Audcent: I am listening.
Senator Grafstein: If not in agreement, he is at least nodding knowingly.
Mr. Audcent: Nodding understandingly.
Senator Grafstein: I find it personally invidious that the right of members of my family to be deeply involved in the volunteer sector should be in any way, shape or form questioned. It costs volunteers to be volunteers, particularly if you are director or have some official capacity in the organization.
If people would take a true look at the involvement of senators in volunteer affairs, they would find that there is not a senator that is not deeply involved in the volunteer sector in his particular community. One of the reasons that person was appointed to the Senate was he or she was active in their community in a direct sense, not in the sense of being a patron, but in an active sense. I find this particular provision an extension of the law that is inconsistent with the nature and the purpose of the Senate.
My suggestion, Madam Chair, if this is possible, is that we ask our colleague, Mr. Audcent, who is superb in this area, to see if he can draft something for us, as it applies to the Criminal Code, that would make it absolutely clear that, if senators did not receive a direct or indirect benefit — save his organization received a director or indirect benefit — that, in effect, we should exempt ourselves from the overflow of the Criminal Code. Again, there is a conflict. In my view, it impedes the privileges of a senator in the historic and constitutional role of a senator in his community if this grey cloud, in effect, is over him when he or she has no direct benefit from a dollar of government money. Yes, his organization benefits. Yes, his community benefits. Yes, there is a competition between this organization versus that organization, but it is all for the public good. It is pro bono. I would hope, with the consensus of the committee, that we cam work at putting this on the table to make it absolutely clear that work in the volunteer sector is not in any way, shape or form quasi criminal or unethical.
When I put this argument to the late Mr. Justice Estey, he knew there was a conflict. The question is how to resolve the conflict for the public interest.
In my view, this could be readily resolved, and you will not have one person in the public criticize us for this, not one. On the contrary, they will say, ``Come and do some more work and, by the way, bring your chequebook.''
Mr. Audcent: Senators are concerned with the public interest, and rightly so. My concern is the interest of senators. I am your counsel. I came in here saying that one of my purposes is to point out that the current regime is broken and needs some fixing. My comments, therefore, fit within that framework, namely, if the law is grey and impeding you then, as Senator Grafstein has said, it is time to fix the law.
The Chairman: I would point out that this does not come under the provisions of the Criminal Code, it comes under the Parliament of Canada Act, Senator Grafstein.
Section 19 of the proposed code states that:
A parliamentarian must not have an interest in a partnership or in a private corporation that is a party to a contract...unless the Ethics Commissioner is of the opinion that the interest is unlikely to affect the parliamentarian's obligations under this Code.
It is at least partially covered in this proposed code. It is something for us to think about.
I believe that we will get a transcript of Mr. Audcent's remarks this afternoon so that you can review them in full. I will see that it is circulated. What he has said is very important.
Senator Joyal: I have two sets of questions. The first is in relation to the present Criminal Code. The second group of questions concern the Milliken-Oliver report, which is the philosophy behind the Milliken-Oliver code, that is, that the Milliken-Oliver report recommends that the new rules be enshrined into the Rules of the Senate and the Standing Orders of the House of Commons. There are reasons for that.
Of course, the witness will understand that what I want to underline is that by enshrining the proposals of the proposed code of conduct in the Rules of the Senate, senators remain, as you said, in control of the Senate. It will remain within the purview of senators to monitor the ethics of senators.
I think that the Milliken-Oliver report had it right by proposing that the need for new rules is within the Rules of the Senate and not within legislation. Once we go to legislation, we must go the route of the court, and when we do that, we will clash with the court on the definition of ``privileges'' in relation to the capacity of the Senate to run its own affairs and, as you said, senators running the Senate.
Everyone who has tackled the issue of ethics of senators or members of the other place will know that it is a matter of privilege, that is, it is their responsibility to rule their own affairs.
My question to you is this: Following the judgment of the Federal Court of Appeal of November 29 that has designated a specific role to the court when interpreting privileges, that is, defining what is privilege and, second, how privilege is implemented by the parliamentary body, what advice could you give us with respect to the fact that, once we have legislated the way that the draft bill is written we would, in fact, be under the power of review of the courts of justice in Canada?
Mr. Audcent: Honourable senator, am I correct is saying that you are referring to the Vaid case?
Senator Joyal: Yes, I am.
Mr. Audcent: The first thing to put on the record is that the Board of Internal Economy of the House of Commons has publicly disclosed its intention to appeal the Vaid case and that the appeal documents have been deposited. The case is under appeal and we can only hope that the Supreme Court of Canada agrees to hear the appeal.
I framed my remarks in response to the government's package by expressing my delight that the code would be anywhere but in the law. The code should not be in the law; the code is not in the law. That is a major victory for parliamentarians.
I believe that you are now engaged in deciding exactly where, within Parliament, you intend to situate the code. I am not sure it is totally clear where this code will be situated. There are references to the Senate and the House of Commons, but the Senate and the House of Commons either speak through statutes, and this will not be a statute, or joint resolutions, and that will put the code in each rule book. If it is a joint resolution, it strikes me that either House can change that joint resolution at will. In that event, there will be no permanency.
I have not quite figured out how this works out. It is such a good victory to get this out of the legal system and out of the courts — and I agree with your objective — and into Parliament where parliamentarians who understand the business, politics and how the business of a parliamentarian is conducted will be able to speak to their peers and establish a common culture as to what is ethical practice. That is what should be happening.
Senator Joyal: However, the Milliken-Oliver report made it quite clear that the appointment of a jurisconsult, or ethics commissioner, and I am quoting from page 11 of the Milliken-Oliver report:
After consultations with the leaders of the recognized parties in the Senate and House of Commons and such other persons as the Speakers consider advisable, the Speakers shall table a nomination in the Senate and the House, and a resolution passed by both Houses shall be required before the appointment is made.
In other words, it remains within the House and within the Senate, through a resolution, to appoint the ethics commissioner. Through the resolution, we can decide to appoint with a two-thirds vote or three-quarters vote, or whatever, to ensure that he is not just removed at the whim of a change of majority in the House.
Clearly, the philosophy of the Milliken-Oliver report is to keep in the House the business of managing House affairs in relation to ethics. What bothers me with this proposed bill is that it legislates the status of the commissioner. I pray to God that the Supreme Court of Canada will receive the appeal and will review the Létourneau decision. If that is not the case and we are stuck with the Létourneau decision, then we will have a major problem. We cannot legislate today ignoring what is coming down the road.
This question bothers me a lot. I looked into the report of the House of Commons in Westminster. It is a report dated November 2002 and entitled, ``Committee on Standards in Public Life: Standards of conduct in the House of Commons''. Recommendation R27 states:
On balance, however, we have concluded that, provided a Standing Order of the House can achieve our recommendations or appointment and powers, statute is an unnecessary step at this stage. In practice, statute is rarely a speedy or particularly flexible means of implementation. A Standing Order has the advantage of being both. However, depending on the practicalities of using a Standing Order, we would not rule out statute in the long term. We therefore recommend that recommendations 1 (a) and (b), 20, 23 and 26 be implemented by Standing Order.
They have had standards of public policy since 1995. In other words, they have had some experience. They reviewed their experience and they still conclude that it should remain within the rules.
It seems to me that the philosophy of our system, which we inherited from Westminster, is consistent with the fact that it has to remain within our house.
It is important that senators remain the ones who run the Senate. Otherwise, we would be either, as you said yourself, at the whim of the other place, which I think is operating within a totally different kind of political culture; or we would be opening the door to a court review.
I hope that the judgment will be struck down, but it may not. Perhaps it will be struck down for reasons other than those we have contemplated, and we will be left with questions. However, if we keep this code within our responsibility, and make it as stringent as we want, we will maintain the capacity of the Senate to rule its affairs.
That is the fundamental decision this committee must make. Where do we want to put the fence around this issue?
Mr. Audcent: Minister Carstairs yesterday located the nomination of the ethics commissioner and tied it to the fact that the ethics commissioner would also serve the Prime Minister. I believe that she made that point.
Senator Joyal is quite right, you must look at the appointment process and the role that the Senate or the House of Commons might play and whether you will put that role in the statute or whether you will have that role by convention. Remember, I said that you must get the law right. This is in the law, so I many a supporting what Senator Joyal has said.
One point Senator Joyal failed to mentioned is that you must also look at the removal provision. The proposed removal provision is on resolution of the Senate and the House of Commons. Should it be and/or? That might be another issue that you might want to consider.
Senator Joyal: I might have used all my time, and there are other senators. Perhaps I could come back on a second round and deal with the Criminal Code.
Senator Smith: This is a supplementary question to the one Senator Grafstein asked about non-profit organizations. It is a minor point, but I am curious.
Charitable organizations, which are non-profit corporations, frequently have an advisory board. An advisory board would pronounce on matters of policy, but they would not actually be the legal corporate entity so as to comply with statutory requirements. That type of structure would not be a problem, would it?
Mr. Audcent: Senator, it does not strike me in the way it has been presented that that is a problem. You are not assuming the rights and obligations of a director or officer. An advisory board sounds to me like, perhaps, it is a gathering of patrons who are there to give advice. You could probably locate that more within the concept of patron, people who are helping out, than within the concept of directors and officers with legal rights and responsibilities to run the place and advocate the interests.
Senator Smith: Moving on to the draft bill, could you clear up for us who actually makes the decision regarding the conduct of senators? Is it the commissioner, or is it the Senate committee to whom the commissioner would give advice?
Mr. Audcent: My understanding is that if a complaint comes in, the commissioner has the right to investigate on his own, but he must investigate if the committee directs him. Section 32 reads,:
The Ethics Commissioner has independent discretion to decide whether a complain merits an investigation, but the Ethics Commissioner must conduct an investigation if directed to do so by the Committee.
Senator Smith: Does that imply that it is the committee that then makes the decision regarding the conduct of a senator?
Mr. Audcent: I would refer to section 33, which reads:
...the Ethics Commissioners must report to the committee
(a) dismissing the complaint;
(b) determining that the complaint appears to be founded and stating the remedial action proposed by the Ethics Commissioner and accepted by the parliamentarian involved; or
(c) determining that the complaint appears to be founded but, that no remedial action was available or agreed to with the parliamentarian involved, and recommending that the complaint should be dealt with by the Committee.
Senator Smith: It almost sounds like the role of the commissioner is to make a ruling on whether or not there is a prima facie case in the first place that is even worth the committee's consideration. If it is the committee that at the end of the day would make the decision, regardless of what the advice might be, how does that become the subject of an appeal?
The Chairman: I believe that the committee's decision cannot be appealed
Senator Smith: I am talking of the courts.
Mr. Audcent: Appealed to the courts?
Senator Smith: Yes.
Mr. Audcent: I do not see this process ending up in the courts. I see this process as the committee reporting to the house and referring the matter back to the ethics commissioner for further direction, if they chose. That is what I view as the end process.
Senator Smith: That is what I thought. I just like to hear the words coming from your mouth.
Mr. Audcent: It is an internal process to Parliament, yes.
Senator Grafstein: I have a supplementary to that. The problem as envisaged by the report that Senator Joyal pointed out is that as soon as you have a judicial process, there is nothing to prevent the courts from becoming involved, even if you exempted the courts by a clause. We have all gone through this, and I am sure that Senator Smith has gone through this. Even if you have an exempting clause, the courts have always felt free, based on the principles of common law, to intervene. The exclusionary clauses have not been sacrosanct. It had been thought that you could exempt the courts from the administrative processes, which was the impulse. That has not been the case or the history.
If you choose, you can say that this will not be subject to a legal process but, at a particular point in time, there will be a lawyer and a judge who will bring an action and that action will have some validity. The House of Commons came to the conclusion that if your intention is to make it sacrosanct and for the separation of powers to be maintained, which, lex parliamenti, is to be the supreme law of parliamentarians on both sides, separate again, then that is the way you do it.
I can give you as many legal opinions on the other side to indicate that this will be open to a legal challenge in any seven different ways.
Senator Smith: That is a fair point. You can never stop people from issuing writs, that is for sure. I agree that is always possible. I am trying to clarify as best we can, and in a way that is on the record, your interpretation of the intent.
Mr. Audcent: My understanding is that the code, like the Rules of the Senate, will be internal to Parliament. The courts should not be involved in this process the way it has been tabled with you.
I think Senator Joyal has brought in, supported by Senator Grafstein, an independent concern. They have brought something in from left field, the Vaid case. In that case the courts said that, even if you have privilege, we have the right to look at every single exercise of the privilege. In that case, there is no such thing as privilege.
Senator Grafstein: Absolutely.
Mr. Audcent: In that case, it not only disappears with respect to this code, it disappears with respect to the Rules of the Senate and with respect to everything. There is nothing left that they will not look at.
In that context, I think Vaid is a whole separate issue that, perhaps, could confuse this issue. I view this issue as the proposal being that the code of conduct is to be internal to Parliament and that is something that it is not in the statutes. It is internal to Parliament, and I approve of that.
Senator Joyal: Even though the code is within the Rules of the Senate, nevertheless, the status of the person who has the responsibility to implement the rules of the code is in the legislation. The courts have looked into the Parliament Staff Relations Act. You know the Vaid case very well. There was a provision in that act excluding the role of the court by stating that this has nothing to do with the control of the privileges of Parliament — for Parliament to remain the sole authority. Even though it was in the act, the court put that aside and looked into the case.
In legislating, we cannot ignore what the courts have been saying and the fact that we have been trying to convince the courts of the contrary view. That is what the House of Commons is trying to do. We, as a house, will have to decide, at a point in time down the road, if we will intervene at the Supreme Court to defend the privileges of Parliament. You might assist us in preparing our factum for the Supreme Court.
We cannot ignore this, Madam Chair.
The Chairman: You are quite right, Senator Joyal.
Senator Kroft: I would like to take you back into section 14 of the Parliament of Canada Act and to several matters that you raised in your comments. You pointed out that this is a very old section in terms of the prohibition of contracting. It is fairly clear.
One of the points that I want to raise with you is that there is an exemption for someone who acts just as a shareholder through a corporation. That veil, if you like, is there. There is an exception to that exception, if you want to build a building or a bridge, I suppose, however we would define a public work.
That language and the thought inherent in it seems to be carried forward fairly intact, as I can see it, into the provisions that would be included in the draft bill. However, I have so many different versions on pieces of paper here that I would like to just be clear on that. I do not have a copy of the draft bill in front of me, but I have the commentary on it.
Mr. Audcent: Honourable senators, I believe there is some evolution with respect to that exception. Section 14(4) states:
This section does not render any person liable to forfeiture by reason only that the person
(a) is a shareholder in any corporation...
No distinction is made there between a public corporation and a private corporation. I think we must be careful not to call the new code of conduct a bill, because it is not in the bill portion; it is in the code portion, the internal portion. The new code of conduct would make a distinction between public corporations, which would be in the proposed section 18(2), and private corporations, which would be in the proposed section 19.
Senator Kroft: Is the exception as to a public work not carried forward?
The concept of private corporations and public works seems to have been replaced by the proposal, as we have it, or by a judgment of the ethics commissioner, that it is unlikely to affect the parliamentarians' obligations under this code.
Mr. Audcent: However, in the case of public corporations, the exception to the exception disappears and it is just a complete exemption. In the case of partnerships and private corporations, you get an opinion of the ethics commissioner.
Senator Kroft: What is lost then is the distinction between public works and other kinds of endeavours. In that sense, it is broader, save the judgment of the ethics commissioner or of the committee through the ethics commissioner; and that is now a interesting point, that a judgment would have to be made at some point, whether it is a public work or whether it is any kind of a contract, under section 19 of the proposed code?
Mr. Audcent: I believe I may have misstated. In both 18(2), which is public corporations, and 19, which is partnerships and private corporations, there is a reference to the opinion of the ethics commissioner.
Senator Kroft: I then come back to the point you made in your presentation of relevance in the world today, where the concept was, at that time, and particularly the public works reference, of government, if you like, handing out or dispensing work opportunities to parliamentarians. As you point out, in the world today there are tens of thousands of people who contract with the Government of Canada in an incredible array of endeavours. You were inviting us, therefore, to look at the relevance of the prohibition in today's context.
Mr. Audcent: The invitation was as a matter of policy and I have no view on it, but the invitation was to remind you that in 1878, Canada was a small place. It took you a long time to get by train to Ottawa, and you were not here that long. The Government of Canada was a small operation. It all fit into these buildings here, the executive as well as the legislative. What was the impact on the life of the individual? How much did that infringe on your liberty?
Today, in a social democratic, modern, 21st century country, government is everywhere. Since government is everywhere, you have to ask yourselves: Do you want to leave this prohibition as wide as is it, saying that you cannot contract with government, or are there lines that are close, that infringe or your rights less, but that would still leave you clean in terms of the public perception of your activities?
Senator Kroft: One approach to finding that line is presumably what is recommended here — the opportunity to have the commissioner or, through the commissioner, the committee, determine the facts of the situation. They might determine that a person is an insurance agent in town and happens to have a policy that covers a subsidiary of a Crown corporation or something. However, that has no practical effect on how we carry out our duties. Particularly, that would also be viewed in an individual circumstance within a range of other issues about declarations, or obligations as they stand in our rules now, obligations to declare any obvious conflicts or interests.
I am pursuing this to see whether you believe that the provisions of the proposed section 19, which is the reference to the fact that the activity must not affect you in the carrying out of your duties, is an effective response to the modern world; or would you be looking for a rules-based approach to this problem?
Mr. Audcent: Neither, senator. My role is to advise you on the existing regime. If you know where you are starting from, you will know where you want to go.
The Chairman: Do you have a follow-up question, Senator Stratton?
Senator Stratton: No. I wanted to make a point so everyone understands me clearly, because we have been through this before.
Marc, you can correct me if I am wrong. The word ``privilege'' has been bandied about this room. We accept it as normal, but the public takes it as a privilege, and not another word. We are dealing with the rights of Parliament here, under the word ``privilege.'' I think this room and the public particularly should be aware of the definition of ``privilege'' in this case. Is that correct, Marc?
Mr. Audcent: Yes, I agree.
The Chairman: Thank you, Senator Stratton, for putting that on the record.
Mr. Audcent, do you have any further comments to make about the definition of the word ``privilege''?
Mr. Audcent: Perhaps I could remind the committee that this committee changed its name recently to include the phrase, ``rights of Parliament.'' That is modern language. ``Privilege'' is 19th century language. People understand human rights and these rights, and we are speaking about the rights of Parliament.
Senator Fraser: Mr. Audcent, all the lawyers in the room may already know the answer to this question, but I do not. Particularly in connection with section 19 of the code, how does that apply to the complicated trees that corporations often set up for their properties? Suppose I, for example, have an interest in a family holding company and that that family holding company has a subsidiary, wholly or partly owned, that is going to get a significant contract from the government — I am not talking about the kind of situation Senator Di Nino talked about where there is no benefit, but a situation where a subsidiary will be getting a bunch of money — would that be covered by section 19, or would I be able to argue that, no, I do not actually hold any shares in that subsidiary?
Mr. Audcent: Are you talking about section 19 of the proposed code of conduct?
Senator Fraser: Yes.
Mr. Audcent: Perhaps the best way I can situate that is to say that the Parliament of Canada Act uses the words, ``directly'', ``indirectly'', ``knowingly'' and ``willingly.'' Being situated in a statute, the reference point is what the courts have decided those words mean in other cases and at other times and in other contexts. As it appears in the code of conduct, this code of conduct is under the governance of the ethics commissioner and either a joint committee or the two separate committees of the houses.
The wording is ``must not have a interest.'' You do not have the words ``directly'' or ``indirectly.'' It could be that means you have to have it and that indirectly does not count, or someone could bring a different perspective and say, ``Let us use some common sense here. Is this really a significant interest?''
The answer is that it is a question of interpretation, and the interpretation will be made by the commissioner, who will work in close consultation with the parliamentary committees that are set up for this purpose.
Senator Fraser: I am correct in my view that, as it now stands, it is open to certain variants of interpretation.
Mr. Audcent: Yes.
Senator Di Nino: I think it is important that we focus on this point because a large number of our senators would probably be caught somewhere here, and I think we should ensure that we understand where it is. The question really came about because of Senator Kroft's and Senator Fraser's question. I dare say that a number of senators are on boards of major corporations in the service industry, for example, banks, insurance companies, and telecommunications companies. I dare say that most of them have some business with the federal government, either directly or indirectly through a subsidiary, or a Crown corporation.
I think, madam chair, we should ensure we fully understand that. We should get a very clear opinion on the extent that this new bill would — and I do not want to say ``entrap'' — include these senators, or if this new bill, in effect, can be changed to exclude certain areas so that the benefit would be defined in some way so that some of the people can continue to serve.
Frankly, there is a number of very capable persons — all senators are very capable persons — in some areas, very capable in the sense that they can make a major contribution to the benefit of Canada and its values. The kinds of things that one can bring to even a private corporation or a public corporation for profit are beneficial. We would not want to see one of our colleagues get into trouble because the code that we are talking about, if and when implemented, would restrict us from participating in some of these things and/or would create a situation where the member could get into trouble. I think we should look at that.
The Chairman: You are quite right. I understand there is a theory in corporate law that allows judges to pierce the veil, to cut through the intervening layers, and to declare that you cannot do indirectly that which you cannot do directly.
Senator Kroft: As a supplementary comment, I think that, disconnected with this, so that we do not lose the thought, if this were in a corporate context, you and I would vote ``no.'' There are two solutions to this. One is to expunge every situation where there is a connection or activity. The other solution, and the one that is familiar in corporate governance, including securities exchanges and so on, is to say that these things may exist, but that the proper way to deal with them — and this is inherent in our rules as well — is to disclose them. I am not talking about the accounting type of disclosure that I already addressed in this committee, but to say that there is an interest here so that anyone who is in a position to judge the conduct of a person is aware of this. These may not be contradictory approaches; they may be complimentary approaches. We should not necessarily need to go down the route of actually allowing or prohibiting everything. In fact, a disclosure or clarity of understanding may be a solution.
Senator Di Nino: I agree.
Senator Joyal: I would like to ask our legal advisor to come back to us with a presentation on the status of the privileges of the Senate in light of how the courts have interpreted it in the past and the way that the doctrine sees it. I know that he is doing some work on the other issues that we have alluded to in our discussion this morning. I think it would be helpful to us to understand that. You are our legal advisor. You are not a government advisor. You are the legal advisor to the Senate. I think it would be helpful for us to understand clearly. I know today your presentation is not focussed on that, but on two other aspects of the Criminal Code. It would be helpful for us to have that from our legal expert. Perhaps you could come here another time and prepare that.
The Chairman: He could give us something in written form that we would have in front of us.
Senator Joyal: That is my first request, madam chair. Secondly, I would like to come back to the issue of the Criminal Code. When the government announced its intention to propose a draft bill, I thought that the issue of the Criminal Code would have been dealt with in a very specific manner, considering, as we know around this table, that the Milliken-Olliver report recommended it, and that the Blenkarn-Standbury committee in 1992 also clearly recommended it. It stated that the definition of ``official'' should be amended so that it does not include a member of Parliament. The Law Reform Commission in 1987 also recommended in its report on amendments to the Criminal Code that that issue be addressed. There has been a recurring of proposal to us through various public documents — some of them directly from our own senators — to amend this section.
My concern with sections 119 to 121 of the Criminal Code is that normally the courts interpret the code and apply the same meaning throughout the code and all other acts related to the code, such as the Canada Evidence Act. If we maintain the status quo in relation to that, there are additional risks that we are open to with the Canada Evidence Act. The word ``officer'' is mentioned in the amendments that were made to the Canada Evidence Act two years ago. It means that when the court applies the interpretation in relation to an ``officer,'' which would be a public servant, then it would apply to a member of Parliament or a senator. I would like you to address that issue too. It adds additional weight to the issues dealt with in section 119 of the Criminal Code.
What is your explanation with regard to that; and am I right or wrong?
Mr. Audcent: First, I would like to react to your reference to Stanbury-Blenkarn. You are right that they recommended that the definition of official be corrected. However, they also recommended a couple of consequential amendments that would leave senators in sections 121 and 122 of the Criminal Code. That is not the philosophy from which I would approach this question.
I come back to the philosophy that I would like senators to consider, which is that you should know where the rules are, so let us not have them in sections 121 and 122. Section 119 says you shall not be corrupt; the rest should be in the Criminal Code.
I would not agree totally with Stanbury-Blenkarn. They put on some caveats, some riders, which I did not like very much.
Senator Joyal: However, that remains the same. They recommended that we address that issue, as you are recommending it to us today. Fundamentally, you concur with what Milliken-Oliver said in 4(c), as you concur with what Blenkarn-Stanbury said in principle, that is, that we have to address that problem specifically.
Mr. Audcent: Yes.
The Chairman: I have something to add that might be of interest to all senators. Sections 118 to 122 of the Criminal Code have been left outside the scope of this code of conduct. They have not been opened; however, we can discuss them. One of the reasons they were not included in Oliver-Milliken, as they were not included in the code that has been tabled with us, is that if there are changes to some of these then they would be very complex. They would involve negotiations, not only with provincial governments, because they cover members of provincial parliament as well, but they would also cover some of our external international obligations. It is extremely complex, which is, I understand, the major reason they have not been included within this proposed code that is before us now.
Senator Joyal: Milliken-Oliver has recommended that the government address that issue specifically. I think I heard you say that they did not recommend that. They did recommend it. Specifically, it is found in recommendation 4(c) of their report which states:
The Government should review the recommendations of the 1992 Special Committee on Conflict of Interest regarding amendments to the Criminal Code regarding the offences of bribery, influence-peddling and breach of trust to clarify the meaning of the word ``official'' in relation to Parliamentarians.
The Chairman: I understand that the Department of Justice is currently reviewing the Criminal Code provisions dealing with bribery and influence peddling, but that is beyond our scope.
Senator Joyal: We should not go overboard on this. According to the statement made by our law clerk, it is quite clear that we can address the issue of defining ``official'' in the Criminal Code, in the strict sense or meaning of the Criminal Code, to make it consequential with the way that the code has been interpreted and the way that we are interpreting our own obligations and responsibilities within the Senate.
Am I right or wrong on this, Mr. Audcent?
Mr. Audcent: I do not have any knowledge of the chair's information about the negotiations with the provinces and international obligations. What I do know is that sections 121 and 122 were never supposed to apply to parliamentarians. If you have a judicial decision that extends it, I do not see why it is difficult to understand why we do not say, ``The court got it wrong and we will correct it with a small amendment.''
Senator Joyal: That is exactly my point.
The Chairman: I would remind senators that I am obliged to end this meeting at 1:30 p.m. sharp because the Senate will then be sitting.
Senator Stratton: Could we ask the witness to come back on Tuesday and continue this debate rather than pushing it right to the last minute?
The Chairman: We certainly can.
Mr. Audcent, you are invited back next Tuesday.
The committee adjourned.