PUBLIC POLICY ADVOCACY IN CANADA

Communications between individuals representing a corporation or its employees and government officials may be subject to a requirement that those communications be reported. Specific rules apply to the lobbying of officials in the Canadian federal government, in some provinces and in some municipalities. Each of these governmental bodies has its own rules, and it is wise to gain an understanding of them before undertaking communications with government officials.

At the federal level, the Lobbying Act provides that some types of communications between individuals and “public office holders” must be reported. Under the Act, individuals who work with or deal with governmental officials or employees may have an obligation to disclose certain information in relation to those discussions. Corporate employees may also be subject to the Lobbying Act, depending on the nature of their work and the time invested in interacting with any employee of the Government of Canada, including politicians, officials and representatives of Canada.

In Canada there are three classes of lobbyist, each of which is treated slightly differently. These are: Consultant, Corporate and Organizational Lobbyists. Consultant lobbyists are those who are hired by clients to either communicate directly with public office holders or set up meetings between the client and public office holders. An individual paid to communicate on behalf of a client with public office holders about any policy, rulemaking, amendment or grant/contract awarding process is classified as a Consultant Lobbyist and is required to register his/her activity under the law. Corporate and Organizational Lobbyists are those who are on staff at corporations or organizations and are paid to engage in lobbying activity. They can be thought of as “In-House” Lobbyists, in contrast to Consultant Lobbyists whose work is contracted out. Organization Lobbyists work in-house at non-profits, while corporate lobbyists work at corporations.

1. Registrable Communications

Not all types of communications with public office hold­ers constitute lobbying activities. If the communica­tions with public office holders fall within the following categories, it is likely that such communications must be registered:

• The development of any legislative proposal by the Government of Canada or by a member of the Senate or the House of Commons;
• The introduction, passage, amendment or defeat of a bill or resolution in the federal Parliament or in a pro­vincial parliament;
• The making or amendment of any regulation as defined in subsection 2(1) of the Statutory Instru­ments Act;
• The development or amendment of any policy or pro­gramme of the Government of Canada;
• The awarding of any grant, contribution or other finan­cial benefit by or on behalf of the Government of Canada;
• The awarding of any contract by or on behalf of the Government of Canada; or
• The arrangement of a meeting between a public office holder and any other person to discuss the subjects above.

In addition, in some provincial jurisdictions, any com­munications made in the normal course of selling an individual’s or a corporation’s products or services, or in entering into a contract with a provincial government, are also registrable as lobbying activity.

2. Lobbying

a. Public Office Holder

An individual representing an interest group or the employee of a corporation entering into discussions with a public office holder may be considered to be involved in lobbying activities. Pursuant to the Lobbying Act, the term “public office holder” refers to any officer or employee of the Government of Canada, including:

• A member of the Senate or the House of Commons and any person on the staff of such a member;
• An appointee to any office or body by or with the approval of the governor in council or a minister of the Crown, other than a judge receiving a salary under the Judges Act or the lieutenant-governor of a province;
• An officer, director or employee of any federal board, commission or other tribunal as defined in the Fed­eral Courts Act;
• A member of the Canadian Armed Forces; and
• A member of the Royal Canadian Mounted Police.

b. Designated Public Office Holder

The Lobbying Act includes a specific category of individ­uals as “designated public office holders” (DPOHs), who are defined as officials responsible for high-level decision-making in government. Specific registration requirements are provided for any communications with a DPOH. The DPOH category includes the following positions:

• A minister of the Crown or a minister of state and any person employed in his or her office;
• The leader of the Opposition or the senior staff in the offices of the leader of the Opposition, both in the House of Commons and the Senate;
• A member of Parliament and any person on the staff of such a member;
• A senator and any person on the staff of such a member;
• Any public office holder who occupies the senior executive position in a department, whether by the title of deputy minister, chief executive officer or by some other similar title;
• An associate deputy minister or an assistant deputy minister, or a person who occupies a position of com­parable rank;
• The chief of the defence staff, the vice-chief of the defence staff, the chief of maritime staff, the chief of land staff, the chief of air staff, the chief of military personnel or a judge advocate general;
• Any position of senior adviser to the Privy Council to which the office holder is appointed by the governor in council; and
• The comptroller general of Canada.

Lobbyists are obligated to provide information to the Office of the Commissioner of Lobbying about the com­munications they have with designated public office holders. The Lobbying Act provides for monthly report­ing requirements for lobbyists when they lobby a DPOH, need to change their initial registration, or terminate or complete their lobbying undertaking.

A monthly report is necessary if a lobbyist initiates oral and arranged communication with a DPOH (e.g., a meeting or telephone conference) that amounts to lob­bying as defined under the Act. The monthly report must provide the name of the DPOH; position title of the DPOH; the name of the branch or unit and the name of the department or other governmental organi­zation in which the DPOH is employed; the date of the communication; and the subject matter of the communication.

c Consultant Lobbyist

The registration process as a Consultant Lobbyist is as follows: There is an initial registration and then there are ongoing things that one has to do. So the Consultant Lobbyist registers initially on the client’s behalf. He/she lets the government know essentially who he/she's going to be lobbying, what the primary issues are. Once that registration is approved – and that is a general registration which more or less covers the activities – if the Consultant Lobbyist arranges formal communication that requires a monthly communication report where he/she's  asked to name specifically who it was that he/she spoke to about the subject on which he/she is lobbying.… if the Consultant Lobbyist is going to be arranging meetings on the client’s behalf he/she's required to register. So even if he/she doesn't  attend the meetings himself/herself, he/she's still required to register for that purpose.

Essentially, these registrations are a signal of intent to lobby a given set of government institutions on a given subject matter. Consultant Lobbyists, who must register their intended activity each time they sign a contract with a new client, file the majority of these records. However, In-House Lobbyists must register their intent to lobby as well. These filings provide a mapping from client (usually a company) to the firm they have hired, and which lobbyist within that firm is the primary consultant on the account. For both Consultant and In-House lobbyists, these filings include information on what communication methods the lobbyists intend to use (e.g. email, meetings), what institutions they intend to lobby, what topics they intend to focus on and whether the lobbyist on the account held a prior government position (above a specific seniority threshold).

d. Employees or In-house Lobbyists

At the corporate level, registration is required when one or more employees communicate with public office holders on behalf of the employer and the communica­tions constitute a significant part of the duties of one employee (or would constitute a significant part of the duties of one employee if they were performed by a sin­gle employee). This evaluation must be conducted on a monthly basis.

In evaluating whether a significant part of an employ­ee’s duties is invested in communications with public office holders, a rule of 20 per cent applies. If 20 per cent or more of an employee’s time each month, or of a number of employees taken together, is attributed to communications with public office holders, the activi­ties are likely registrable.

Evaluating whether 20 per cent or more of an employ­ee’s duties are in relation to communications with pub­lic office holders involves tracking time spent in preparation (i.e., in research, drafting, planning, compil­ing, travelling, etc.) and the time spent actually commu­nicating with public office holders. For instance, a one-hour meeting may require seven hours of prepara­tion and two hours of travel time. In this case, the time related to lobbying with a public office holder would be a total of 10 hours.

Under the Lobbying Act, the legislative reporting obliga­tion (relating to both public office holders and desig­nated public office holders) rests with the employee of a company that occupies the most senior position in the business and who is paid for the performance of these duties, usually the president, CEO or executive director. If a report is not filed, or if it is filed incorrectly, incompletely, or late, then liability rests with the CEO, who is then subject to possible investigation or prosecution.

Although a CEO charged with a strict liability offence under the Act could argue that he or she took all rea­sonable care and exercised due diligence in order to comply with the Lobbying Act, the onus would lie on the CEO to prove such care was taken. Of even greater concern than the stiff financial penalties that may be levied under the Lobbying Act is the damage to reputa­tion that would result from having the business name tainted in the media and by opposition-party politicians.

d. Infractions and Enforcement

The Office of the Commissioner of Lobbying has signifi­cant investigatory powers and a mandate to enforce compliance. As an independent agent of Parliament, the Commissioner can ask DPOHs to verify the accu­racy and completeness of contact report information submitted by lobbyists and, if necessary, report to Par­liament the names of those who do not respond.

The Commissioner also has the power to prohibit lobby­ists convicted of any offence from communicating with the government as paid lobbyists for up to two years and publish the names of violators in parliamentary reports. As well, the Lobbying Act provides for criminal monetary fines of $50,000 on summary convictions for lobbyists who do not comply with the requirements of the Act, and $200,000 on proceedings by way of indict­ment, not to mention the possibility of up to six months of imprisonment for the former and up to two years of imprisonment for the latter.

Conclusion

The more serious problems with the Lobbying Act come from how disclosure interacts with the 20 percent activity threshold for registering as an In-House lobbyist. For public office holders there is a five-year ban on lobbying after they leave their government position. The fact that an individual must spend at least 20 percent of their time lobbying at a corporation or organization to trigger registration creates a sort of loophole in this moratorium for former office holders: “You can lobby as long as you: a) work for a corporation, not a consulting firm, not an organization; and b) only do it 19 percent of the time”.

There's a concern over how this threshold can be used as a loophole to allow former government officials to engage in lobbying activity without registration for corporations or organizations.

Despite the generally positive reviews of the current system, concerns over who registers, under what circumstances and what communication they have to disclose clearly create a perverse system of incentives. The mutually beneficial incentives of clients and public officials drives lobbying activity away from meetings by Consultant Lobbyists which require reporting and towards more informal meetings directly with the client, which may not be disclosed. Because of apparent risk-aversion over running afoul of registration requirements, activity is made more, rather than less, opaque. This is not the intent of the law.

To maximize disclosure, a few relatively small changes to the registration and reporting requirements would make a big difference. The 20 percent time threshold for triggering registration as organization/corporation lobbyists should be removed. Any representative from a corporation or organization who takes meetings with members of government should file a communication report. Furthermore, all individuals in attendance of these meetings should be listed in communication reports, rather than appearing under the client CEO’s name.

Under the current system of two-tiered system of disclosure, the incentives of both those who would like to influence the government and those within the government is to engage directly without Consultant Lobbyists as intermediaries. There is no good way to know the extent to which this is actually taking place, precisely because this sort of activity is not reported. Normalizing registration between Consultant and In-House Lobbyists would remove this incentive to avoid disclosure by having clients to lobby directly instead of Consultant Lobbyists. Ultimately, this would strengthen the lobbying law and reveal more about how the government and private sector interact without increasing penalties, enforcement costs or creating an undue burden on the legitimate interests of the private sector.