INST Committee Meeting

STANDING COMMITTEE ON INDUSTRY, SCIENCE AND TECHNOLOGY

COMITÉ PERMANENT DE L'INDUSTRIE, DES SCIENCES ET DE LA TECHNOLOGIE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, March 20, 2001

• 1533

[English]

The Chair (Ms. Susan Whelan (Essex, Lib.)): Pursuant to Standing Order 108(2), Review of the Lobbyists Registration Act, this meeting was convened today to commence our required parliamentary review of the Lobbyists Registration Act.

As he is the person responsible for the Lobbyists Registration Act, we invited Mr. Wilson to provide input into our review. However, that being said, Mr. Howard Wilson wears two hats. As members know, Mr. Wilson is the ethics counsellor to the Prime Minister, to cabinet, to Parliament, to senior bureaucratic officials. Yesterday he contacted me and requested that he be allowed to make a statement on his role as ethics counsellor and to answer questions. It has now been agreed by all parties that we will proceed today for the first 40 minutes with Mr. Wilson making his statement on his role as ethics counsellor, followed by questions from each party for no longer than five minutes each. Then we will proceed to the main purpose of this meeting, consistent with the Standing Orders, our review of the Lobbyists Registration Act.

Mr. Wilson, please begin.

Mr. Stockwell Day (Okanagan—Coquihalla, CA): Madam Chair, I have a point of order.

The Chair: We're hearing a witness now. I've already called Mr. Wilson.

Mr. Stockwell Day: Right after on a point of order, though?

The Chair: Once testimony has begun, we don't have points of orders.

An hon. member: We haven't begun yet.

The Chair: I just called Mr. Wilson to testify.

Mr. Stockwell Day: Will you acknowledge a point of order immediately following that?

The Chair: Yes, immediately following.

Mr. Stockwell Day: All right, thank you.

The Chair: Thank you.

Mr. Wilson, please.

• 1535

Mr. Howard R. Wilson (Ethics Counsellor, Department of Industry): Thank you very much.

I am delighted to be here at the start of the committee's parliamentary review of the Lobbyists Registration Act, the LRA.

Later I hope to be able to introduce my colleague, Diane Champagne-Paul. She's the registrar of the lobbyists' registration branch. She will be making a brief statement describing in broad terms the LRA. Following this, I intend to speak to a number of the points raised by the Honourable Brian Tobin, Minister of Industry, in his letter to the committee of March 9, 2001. We will then both be pleased to take questions from the committee members.

Before we do that—and the chair has made reference to this—I did speak to her yesterday suggesting that it might be in the public interest for me to make a statement on the sale by the Prime Minister of his shares in the Grand-Mère Golf Club in 1993, and then take questions.

The issue of the golf club is not new. It was thoroughly and publicly aired in 1999, much of it, Madame Chair, in this committee, as you know. Let me once again go over the facts.

[Translation]

On April 16, 1993, 161341 Canada Inc., which owned the Grand- Mère Golf Club, sold its interests in the Auberge Grand-Mère to Mr. Yvon Duhaime. This company, in which the Prime Minister, through a family holding company, had a 25% interest, was paid in full by the summer of 1993.

Therefore, as I indicated in my letter of May 6, 1999, to Mr. Lorne Nystrom, MP, there were no continuing financial links between Mr. Duhaime and the Prime Minister since mid-1993. Furthermore, there were no continuing links between the Auberge (Mr. Duhaime) and the Golf Course.

[English]

On November 1, 1993, the Prime Minister, through the family holding company, J & AC Consultants Inc., sold his shares in 161341 Canada Inc., the golf course, to Akimbo Development Corporation, owned by Mr. Jonas Prince. This was an unsecured sale. In 1996 the Prime Minister advised me that he had received no payments and wanted to know what his options were. His lawyer was of the view that he had two options: to take the buyer to court or to try, through his lawyer, to organize a way by which the payment would be made. The Prime Minister chose the latter course.

My conclusion was that the Prime Minister ceased to have any personal financial interest in the golf course as of November 1993. I testified on this on May 6, 1999, to the House Standing Committee on Industry. That exchange with the committee is on my website.

[Translation]

The legal debt owed the Prime Minister was unaffected by the value of the Golf Course. If the value increased, the Prime Minister had no claims for a higher payment. If the value of the course were to decrease, the debt owed the Prime Minister remained the same.

The Prime Minister always retained the right to sue for repayment in the courts during the period from 1996 to the fall of 1999 when a negotiated settlement was reached.

[English]

In the fall of 1999 I was informed that a settlement had been reached for the payment of the golf course shares sold by the Prime Minister in 1993. An agreement was reached by Akimbo to sell the shares they had earlier acquired to the majority owner of the golf course, Louis Michaud Investments Inc. This sale enabled Akimbo to discharge their financial obligations to the Prime Minister. Because the shares were never returned to J. & A.C. Consultants, the Prime Minister never reacquired a financial interest in the golf course. This was covered in my testimony of May 6, 1999, to the House Standing Committee on Industry and in the fact sheet my office released on October 14, 1999. I am circulating to the committee today a copy of the October 1999 fact sheet along with a more recent fact sheet of March 1, 2001.

• 1540

In concluding, I want to emphasize that I have seen the relevant documents, namely, the original sale document of 1993 and the subsequent agreements of 1999. There is no doubt that the Prime Minister ceased to be a shareholder in 1993 and the shares never returned to his ownership or control.

Thank you, Madam Chair.

The Chair: Thank you very much, Mr. Wilson.

Mr. Day, you have a point of order?

Mr. Stockwell Day: Thank you, Madam Chair.

Because of the obvious great interest in the questions that are before us today, and out of respect for other colleagues here and the other leaders of opposition parties, I would like to move that the 30 minutes that are allocated to open questions be deemed to include time for questions only and not Mr. Wilson's answers.

The Chair: In fact, Mr. Day, we had an agreement amongst all parties. I spoke to everyone individually. I made an effort to speak to each party individually, and that was the agreement we had.

Mr. Stockwell Day: I appreciate that. I think we could—

The Chair: The other thing is, Mr. Day, on a point of order you cannot make a motion, so I have to rule your motion out of order at this time.

Now we're going to proceed to questions. Mr. Day.

Mr. Stockwell Day: So there'll be 30 minutes for everything then, including questions and answers? Do I understand that correctly?

The Chair: Mr. Day, this industry committee has had a very good practice of having rounds of five minutes. As chair, I have allowed some leeway in the past, and I will continue to do that. This is a time to ask questions and receive answers, not to make long speeches. Hopefully, all committee members who are present today—who we welcome here—will be in agreement with the practice of this committee and with the precedent set by this committee.

Mr. Charlie Penson (Peace River, CA): I wish to speak on the same point of order.

The Chair: I think I've been more than fair as chair. As I just said, a motion can't be made on a point of order, so I'd like to proceed to questions.

Mr. Charlie Penson: I'd like to pick up on the point of order without the motion.

The Chair: His point of order is out of order.

Mr. Charlie Penson: Okay, I'd like to move a new point of order.

The Chair: You can't move a point of order.

Mr. Charlie Penson: I'd like to raise a point of order.

The Chair: Do you have a point of order, Mr. Penson? The chair recognizes Mr. Penson on a point of order.

Mr. Charlie Penson: Madam Chair, in view of the immense interest here, I think it would be a real disservice to members not to expand this so we can have a reasonable back-and-forth discussion to try to get some answers to some serious questions. I would suggest that the time allotted for the Lobbyists Registration Act to follow be reduced somewhat to allow us to have a bit more time along the lines of what Mr. Day suggested, that we have a bit more time for the questions and answers, so we can adequately deal with this.

The Chair: Mr. Penson, we spoke, you and I, and you agreed to this earlier today, that we would have—

Mr. Charlie Penson: Things have changed.

The Chair: Regretfully, as the chair of this committee, I have to make agreements with all members of the committee and I have to make plans. We agreed that each party would have five minutes for questions and answers. As I said and as you know, I have allowed leeway in the past. If you have more than one person in that five minutes, fine, but I think we're spending enough time on debating this and we'd have more time for questions if we were to begin.

Mr. Day.

Mr. Charlie Penson: Just further to that, I suggest that this committee is its own master—

The Chair: That's true, Mr. Penson.

Mr. Charlie Penson: —and if we decide that we want to expand this time, we can do it. I suggest you seek permission to do that.

The Chair: Mr. Lastewka.

Mr. Walt Lastewka (St. Catharines, Lib.): Before we decided to move away from the Lobbyists Registration Act and get into additional testimony and questions, there was an agreement by all to proceed in this matter. Now if you want to make it a political affair, which it has now become, and if that's the way you want to proceed, then we should not have made the agreement in the first place. We should have stuck to the Lobbyists Registration Act. We agreed to have a questioner from each party for five minutes.

A voice: We gave up our own time.

Mr. Walt Lastewka: Be specific. Be to the point. Ask your questions, and let's get on with business.

The Chair: We don't have unanimous consent, so I am going to rule. We're going to proceed to questions. Mr. Day.

Mr. Stockwell Day: Thank you, Madam Chair.

[Translation]

Sir, I would like to thank you for accepting this committee's invitation. As evidenced by the presence of all party leaders and other people as well, you can see that we are deeply concerned by the matter of the Prime Minister's conflict of interest in the Grand-Mère Golf Club file.

• 1545

[English]

And I would ask you this, sir. On May 6—you refer to that in your notes—you made a statement that you did not believe there was any conflict as the Prime Minister had sold his shares. In the course of your investigation, I'm wondering, did you ever examine the corporate records of the Grand-Mère Golf Club, including the shareholder registry, to determine whether or not the Prime Minister was still a shareholder in the company after the sale of shares to Mr. Jonas Prince had fallen through?

Mr. Howard Wilson: Thank you very much, Mr. Day. Let me answer by first stating that the Prime Minister was not a shareholder, “un actionnaire”, in the golf club after 1993. I did not examine the books of the golf course. I would have had no right to do so because in 1993 the Prime Minister had sold his shares and was no longer a shareholder in the golf course.

The only lingering connection he had with the golf course was that he continued to be registered formally as a director. Under one of the requirements of the conflict of interest code, he had to, in the first 120 days, take the necessary steps to have himself formally removed as a director. This took place in March of 1994. But his shares had been sold, and therefore there was no connection.

As the ethics counsellor, I would have had no right to seek information in the books of a private company.

However, I would like to add just one small point, and that is, when you wrote to me on February 27, you did raise some serious questions and asked me if I would ask the director of the corporations directorate of Industry Canada to determine whether or not the returns were in fact accurate. I did so, and in anticipation of a question, while I know they are doing this, I have not heard back from them.

Mr. Stockwell Day: I appreciate your giving that clarification, sir, and I also appreciate the fact that you said you had not, yourself, examined those corporate records.

Further to what you just said about my letter to you, I'd like to ask if the corporations directorate will be communicating to the minister and to you the name of any fourth shareholder, whether it's Jonas Prince, the Prime Minister himself, or some other person. Will they actually be communicating that to you, so the House can determine if the Prime Minister had a conflict of interest of not?

Mr. Howard Wilson: Mr. Day, I expect that the corporations directorate will be responding to my letter. I'm not sure exactly when that will take place. My intention is, as I indicated to you in my interim reply, that once I have that in hand, I will be responding directly to you. I am quite confident that will remove any lingering uncertainties.

Mr. Stockwell Day: Then, just to confirm what I understood—and I appreciate that response, sir—if there is a fourth person named, you will be communicating that name then. Is that what I'm hearing?

Mr. Howard Wilson: I think I will be able to remove any lingering mystery that might persist around this table.

Mr. Stockwell Day: I appreciate the fact that there may be some limitations, and I'm not questioning your abilities, but foreseeing the eventuality that we do not get that name, I would like to move that pursuant to Standing Order 108 this committee send for Mr. Jonas Prince to appear as a witness regarding his ownership of shares in 161341 Canada Inc.

[Translation]

Pursuant to Standing Order 108, I move that this committee request Mr. Jonas Prince to appear before this committee with respect to his shares in 161341 Canada Inc.

[English]

The Chair: Mr. Day, your motion is tabled. We have a 48-hour substantive rule at this committee, and we don't debate motions when they're tabled for that reason.

We have witnesses here. You have time for one more question.

Mr. Stockwell Day: Yes. The other question is, is there unanimous consent to waive the 48-hour rule?

The Chair: No.

Mr. Duceppe.

[Translation]

Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Wilson, at the outset, I would like to tell you that I would really like to see you have the same status as the Auditor General, and that you report to Parliament, which would give you the same moral authority and the same credibility.

• 1550

That being said, you stated, on May 6, 1999, that the Prime Minister's shares had been sold in 1993 and, in the next statement, you told us that the sale appeared to be imminent.

Am I to understand that the sale was not final, since the Prime Minister had not been paid, and that it cannot be claimed that, on May 6, 1999, the sale had been concluded?

[English]

Mr. Howard Wilson: Let me, Mr. Duceppe, thank you for that question.

The negotiations that had proceeded began in 1966—

An hon. member: Was that 1966?

Mr. Howard Wilson: It was 1996—

Mr. Gilles Duceppe: I wouldn't be surprised.

Mr. Howard Wilson: They took considerable time. In May, when I appeared before the committee, there was an expectation that it was going to be settled fairly rapidly. As it turned out, it was not settled until a little later that year.

[Translation]

I said this on October 1999.

Mr. Gilles Duceppe: Would you agree with me that, as long as it has not been paid for, the sale has not been concluded?

[English]

Mr. Howard Wilson: The sale was an unsecured sale. In other words, the Prime Minister no doubt had full expectation that he was going to be paid. He signed the deal in November 1993—

[Translation]

Mr. Gilles Duceppe: After six years, would you not agree with me that it's a bit worrisome that he hasn't been paid yet and that, meanwhile, direct intervention has been made with respect to the Business Development Bank of Canada? Will you acknowledge these facts?

Mr. Howard Wilson: Mr. Duceppe, there were two options.

Mr. Gilles Duceppe: I know, I saw that. Do you agree with what I just said?

[English]

Mr. Howard Wilson: What the Prime Minister had was a choice of taking the man into court or continuing the negotiations. By the time 1999 came, the matter was coming close to a conclusion.

[Translation]

Mr. Gilles Duceppe: The Prime Minister decided to continue negotiations. Is that what you are telling me?

[English]

Mr. Howard Wilson: He had asked his lawyer to, in effect, take the second of—

[Translation]

Mr. Gilles Duceppe: He was aware of the matter. Was he involved in the negotiations?

[English]

Mr. Howard Wilson: Oh yes, and he had every right to be.

[Translation]

Mr. Gilles Duceppe: He was involved in the negotiations.

[English]

Mr. Howard Wilson: He would have been reported. The lawyer had every right—

[Translation]

Mr. Gilles Duceppe: He was aware of the negotiations.

Mr. Howard Wilson: Probably.

Mr. Gilles Duceppe: He had given his lawyer a mandate.

Mr. Howard Wilson: Yes.

[English]

The Chair: Mr. Duceppe, just allow the ethics counsellor to answer the question.

[Translation]

Mr. Gilles Duceppe: He is answering just fine.

Mr. Howard Wilson: I have had several meetings with the Prime Minister since January 1996 on the progress of the negotiations.

Mr. Gilles Duceppe: Hence the Prime Minister—

Mr. Howard Wilson: It's a long story, Mr. Duceppe.

Mr. Gilles Duceppe: I know.

Mr. Howard Wilson: It began in January 1999.

Mr. Gilles Duceppe: Hence the Prime Minister intervened in the sale of an inn adjacent to his golf course when he knew that his shares had not been paid for and that he was participating in negotiations in order to secure payment for his shares in the golf course. Is that the case?

[English]

Mr. Howard Wilson: No, because I'm not accepting that there were in fact those links between—but let me finish—the golf club and the auberge. He had no financial interest in the golf club as such; he had debt owed to him by Mr. Prince. There was no connection between the auberge and the golf club.

[Translation]

Mr. Gilles Duceppe: That is not what I said. But we will agree, first of all, that the inn is located very close to the golf course; secondly, that he intervened with respect to the Business Development Bank of Canada and that thirdly, the shares had not been paid for and that he was negotiating.

Do you agree to these facts?

[English]

Mr. Howard Wilson: What is true is that he had sold, in 1993, his interests in the golf club and he had not been paid. The golf club had no interest in the auberge. That had been disposed of in 1993.

[Translation]

Mr. Gilles Duceppe: Do you feel that Mr. Michaud, the Prime Minister—

[English]

Mr. Howard Wilson: I knew the Prime Minister's office had assisted Mr. Duhaime in his negotiations with the BDC, and I dealt with that matter in this committee in May 1999.

• 1555

[Translation]

Mr. Gilles Duceppe: I have one final question. I would like to know, on the one hand, if he was paid the same price as the one agreed to in 1993 and, on the other hand, was it not in his interest to have someone like Mr. Michaud, whom he knew, purchase these shares?

[English]

Mr. Howard Wilson: I think the reality is that for some long time the lawyer had been attempting to arrange a deal whereby the shares would be sold.

Now one of the unfortunate matters in this affair was that there had been press reports on the part of Mr. Prince that it had never been a sale, it had only been optioned to buy, and that he had returned the shares.

I spoke to the committee in 1999 and told the committee that I had seen the document of 1993, and it was not an option to buy. It was a sale free and clear without security.

Now it might well be said that when you do a deal, you get the shares back if the person hasn't paid. That was not the nature of that particular arrangement.

I come back again to what was put to me and to the Prime Minister by his lawyer, which was: you can take the man to court or we can try to negotiate a settlement. As it turned out, the settlement was negotiated, and the shares that had been acquired by Mr. Prince were sold by Mr. Prince to Mr. Michaud in September 1999.

The Chair: Mr. Lastewka, please.

Mr. Walt Lastewka: Thank you, Madam Chair.

Mr. Wilson, I have a number of questions. Have you personally seen documents that show that the Prime Minister did not own shares in the golf course after 1993, and are you confident that the shares never returned to his possession?

Mr. Howard Wilson: I am confident. Not only have I seen the documents, but I am absolutely confident that the ownership never returned to him.

Mr. Walt Lastewka: I want to confirm again, has the golf course ever received federal funds?

Mr. Howard Wilson: Not to my knowledge.

Mr. Walt Lastewka: Have you ever seen evidence to support the claim that fluctuations in the value of the auberge would affect the value of the golf course?

Mr. Howard Wilson: No, I did not consider that to be a direct linkage.

Mr. Walt Lastewka: Can you confirm to this committee that you worked with both the Prime Minister and his trustee to ensure that the Prime Minister fully complied with the conflict of interest code, and have you answered all the requests from the opposition? Maybe break it up into two.

Mr. Howard Wilson: In 1993, after the general election, I was responsible for applying the conflict of interest code for public officeholders to all members of the cabinet, including the Prime Minister. The Prime Minister, his staff, and his lawyer cooperated fully with me; he was brought into compliance, and we made a declaration to that effect in the early part of 1994. Since that time, he's been in compliance with the conflict of interest code.

Mr. Walt Lastewka: The requests from the opposition in answering questions—have you been answering those questions?

Mr. Howard Wilson: Well, I certainly hope that they would agree that I have been making every attempt to answer them. I received letters during the election campaign both from Mr. Day and Mr. Clark. Those were answered.

I've had subsequent correspondence with Mr. Day. It was my judgment yesterday, in talking with the chair here, that I should be willing to speak to these points because they were important, and I will continue if necessary to do so.

Mr. Walt Lastewka: In your view, are you satisfied that the Prime Minister's relationship with the auberge Grand-Mère has been reviewed sufficiently to show that the Prime Minister behaved in an ethical manner?

Mr. Howard Wilson: I am satisfied that the Prime Minister had no personal interest at stake when he assisted the auberge in its applications before the Business Development Bank. That was the issue of substance in the correspondence I had late last year with both Mr. Day and Mr. Clark.

Mr. Walt Lastewka: Could you outline the various aspects of the case that you have reviewed to come to that conclusion?

Mr. Howard Wilson: Well, I've been able to see all of the documents, including the original sales agreement, the agreement struck in 1999. As I've said, the relationship between the golf course and the auberge was severed in the early part of 1993. Then the Prime Minister sold his interests in the golf course as of 1993, and I have continued to see clear evidence that he, as of that moment, ceased to be a shareholder and never returned as a shareholder.

• 1600

Mr. Walt Lastewka: Do you feel that your assessment was arrived at in a totally independent manner?

Mr. Howard Wilson: My office operates in a totally independent manner. I have never received instructions from the Prime Minister on these matters.

He did ask me to administer the code on his behalf. This is what I do. He has only asked me to ensure that his ministers are in compliance with its provisions, not about the details of how I go about my task.

Mr. Walt Lastewka: Do you feel in any way restricted from performing your duties and responsibilities?

Mr. Howard Wilson: Absolutely not.

I think one of the important tasks was to come before this committee and speak to these points. I have been before a committee before where we talked about the golf course. I didn't anticipate at that time we would be doing it again. But I do have the ability to be able to come and do this, and I am confident of my capacity to be able to carry out my responsibilities.

Mr. Walt Lastewka: Did you have any requests from the media to confirm or deny any of the innuendoes that have been flying around this place?

Mr. Howard Wilson: Well I have given a fair number of interviews to the media. I haven't said to them, I think, anything that I haven't just said to you a few minutes ago.

The Chair: Last question, Mr. Lastewka.

Mr. Walt Lastewka: That's all.

The Chair: Thank you very much.

Ms. McDonough, please.

Ms. Alexa McDonough (Halifax, NDP): Thank you, Madam Chair. I'd like to thank Mr. Wilson for coming before the committee this afternoon. I'm sure, Mr. Wilson, you'd agree that the uproar around the Grand-Mére Golf Club and auberge, and the Lobbyists Registration Act that we're going to be considering later this afternoon, both arise from a concern to ensure the highest possible ethical standards of conduct in public office and among the parliamentarians.

I'm aware that in February 1999, when you appeared before the Australian Senate, you lamented the fact that Canada had not gone as far as Australia, for example, in putting in place the most stringent conflict of interest provisions that could increase public confidence. I'd like to ask, first of all, whether you're still of that view.

Mr. Howard Wilson: Well, the point of interest in my appearance before this Senate lecture series in Canberra was actually over the fact that Prime Minister Howard, who has a code of conduct a bit different from our own, had however succeeded in losing since 1996 about four or five ministers to conflict of interest allegations that were sustained by comments made in their parliament or in the press.

One of the things that I spoke to was that I thought our system was much more robust. And it was more robust because what we attempt to do is to take measures in advance so that ministers and other senior public officials do not have private interests that could cause a successful allegation of a conflict of interest, so that they are required to put shares in blind trusts or sell them at arm's length. If they have a private company that has dealings with the Government of Canada, then this has to be again managed at arm's length to them. There are public declarations on other kinds of properties, and they have to give up a number of positions. So I was arguing in Australia that our system, by putting the stress on avoidance, quite conservatively, did at least allow then-ministers to get on with what they were being paid to do and that is conduct public policy.

Ms. Alexa McDonough: You may be aware, Mr. Wilson, that I've introduced a private member's bill, C-299, to address the issue of conflict of interest and the fact that we don't have a regime that now applies to all MPs and senators. I'm wondering if you had an opportunity to look at that and, specifically in line with your concern about prevention and avoidance measures, whether you are in agreement with the provision in that bill, which exists in most other conflict of interest legislation, that provides for the ethics commissioner to report directly to Parliament and to do so on an annual basis. Would this not increase not just public confidence that we have the appropriate conflict of interest provisions, but also the appearance of your absolute independence as the ethics commissioner?

• 1605

Mr. Howard Wilson: I haven't yet had the pleasure of reading your member's bill. My office has asked for a copy—probably has it and I haven't gotten around to reading it. I am aware, however, from your statement of the broad elements.

One of the things I am on the public record as supporting is a code of conduct for parliamentarians. There was, in fact, a joint committee set up in 1996. It reported in 1997, shortly before the federal election that year.

Ms. Alexa McDonough: I believe our new Speaker was the co-chair.

Mr. Howard Wilson: He was, as was Senator Oliver. What it did was propose a code not unlike that applying in the provinces and in the U.K. But let me make one qualifying comment: that recommendation also recognized that it was the responsibility, under our constitutional system, of the Prime Minister to set the rules that would apply to his ministers. That is the rule that applies in Australia and in the U.K. In other words, there is a parliamentary commissioner in the U.K., but she does not have responsibility for judging the behaviour of ministers as ministers. That is clearly the responsibility of the Prime Minister, and it's stated in her mandate.

Nonetheless, coming back to your question, I think the House and the Senate and members would find it to their advantage to have a code of conduct. I get a lot of calls from members asking for advice, which I have no major authorization to provide, although I'm happy to do so and give my perspective.

The Chair: Last question.

Ms. Alexa McDonough: I wonder if you could speak more directly to the issue of the lack of independence, and the clear public perception of lack of independence, of you as the ethics commissioner, in that you don't report directly to the House or to a joint parliamentary committee, and you're not required to do so on a regular basis.

Mr. Howard Wilson: First of all, I hope the operations of my office are indeed transparent. The fact of coming before this committee, I think, is evidence of that, plus what we try to do on our website through responses to letters that I may receive from party leaders. They are a matter of public record.

I think my reporting relationship is the correct one: in terms of our constitutional system, I deal with the executive, not with the legislature. That is not to say there should not be somebody dealing with the legislature, but I think it is, at the end of the day, our constitutional system that demands that it is the Prime Minister who must stand accountable. We have stated that quite clearly. I am comfortable with the authority, however, and the independence the Prime Minister has extended to me. I have never been stopped or hindered in the conduct of my responsibilities.

The Chair: Thank you. Thank you very much, Ms. McDonough. Mr. Clark, please.

The Right Honourable Joe Clark (Calgary Centre, PC): Thank you.

Since Mr. Prince has a different view of the transaction that was entered into, I think Mr. Day is correct and it would be very useful for this committee to summon Mr. Prince to testify and present evidence, so that Parliament could have an opportunity to look at that.

Mr. Wilson, welcome to the committee.

You have been saying in the past the Prime Minister had no financial interest. You say today

the Prime Minister always retained the right to sue for repayment in the courts during the period from 1996 to the fall of 1999.

Surely a right to sue for repayment is a financial interest.

Mr. Howard Wilson: He was owed money, that's absolutely certain, but that money gave him no links with the golf course. He could not repossess the shares, but he could sue and be paid the money that it had been agreed he should be paid in a deal in 1993.

Mr. Joe Clark: There are a couple of things. If he was owed money, he had a financial interest, and until we have seen the documents that were in place—not calling into question your testimony at all, but we parliamentarians would like to see the documents with our own eyes—we will not be able to judge what the nature of that agreement was. Mr. Prince, on the record, has a very different view.

• 1610

If the Prime Minister was owed money, did he declare that? And if not, why did he not declare that?

Mr. Howard Wilson: Let me, Madame Chair, clarify a point that has been somewhat confusing, I think. It was first aired in 1999, when the press reported correctly that I first learned in January 1996 he was owed money by Mr. Prince and had not been paid. Quite frankly, as I said at the beginning in response to a question here, I got full cooperation from the Prime Minister, his staff, and his lawyer in terms of the code. We did not at that time have an explicit question that dealt with the issue of moneys owed. I've since corrected that. I was dealing with a form that was deficient in some other respects as well.

But I was never troubled by this, because I had been told he had sold his interest. We knew that he was a director, a position from which he had to resign, as he did, by March of 1994. The only interest we have in who owes you money is the nature of the individual's dealings with the Government of Canada. Are they of such a nature that it might subsequently appear that you, the public officeholder, in dealing with them, are doing so, or giving the appearance of doing so, so as to facilitate the recovery of whatever moneys are owed you?

We are, then, only interested in people who have very intimate and ongoing connections in a major way with the Government of Canada. This is not the case with Mr. Prince. I knew in 1996, and I was not troubled. I do not consider that the Prime Minister's lawyer, his staff, or the Prime Minister himself were at all deficient in 1993 in this matter.

Mr. Joe Clark: Mr. Wilson, the Prime Minister was owed a debt. He didn't tell you. He has an obligation to declare debts. He didn't declare them. Is that a correct summary of what happened between 1993 and 1996?

Mr. Howard Wilson: The code did not require that he explicitly do that.

Mr. Joe Clark: That's a very lawyerly answer. As the Prime Minister of the country, with an ethical obligation, did he not have an obligation to declare the debt in question?

Mr. Howard Wilson: I was told it had been sold. I was satisfied with the information that had been provided to me. If there is a deficiency here, it was in the way my office formulated the questions to be put to public officeholders, not just the Prime Minister.

Mr. Joe Clark: May I ask whether the Akimbo sale to Mr. Michaud was for the precise sum that was stipulated in any agreement between Akimbo and the company in which the Prime Minister was involved?

Mr. Howard Wilson: I don't think I'm following the question.

Mr. Joe Clark: There was an amount of money paid by Mr. Michaud to acquire the shares. Was that amount of money the precise amount that was involved in the transaction between Akimbo, Mr. Prince's company, and the Prime Minister?

Mr. Howard Wilson: We have never revealed those sums—

Mr. Joe Clark: I'm not asking you to reveal them, I'm asking you to tell me if the agreement was precisely the same amount of money. Or was there a change? Was it higher or was it lower?

Mr. Howard Wilson: What I have said is that they were more or less... He did not make any money. I'll go back to my statement of October 14, 1999, when I stated, Mr. Clark, that—by the way, I'm not a lawyer, so I don't know that I can give a lawyerly...

Mr. Joe Clark: I understand that. I apologize for the slur.

Mr. Howard Wilson: “The amount received by the Prime Minister will remain confidential, but there has been no financial gain.”

The Chair: Last question, Mr. Clark.

Mr. Joe Clark: You said there was no impact on the value of the golf course as a result of the value of the auberge. I believe you said that earlier today. What's the basis of that judgment?

Mr. Howard Wilson: That there was no financial connection between the two? There did not appear to be any change in the value. I think I've been quoted by the press in terms of those kinds of comments.

• 1615

But my view was, was there a financial interest at all? The golf course had ceased to have a financial interest in mid-1993 in the auberge and the Prime Minister ceased to have a financial interest in the golf course in November of 1993. He was owed some money, but he was not owed money by the golf course. He was owed money by Mr. Prince.

Mr. Joe Clark: Sir, that's not the point. The point is that if, for example, you lose your liquor licence in the auberge, that's going to have an impact on the value of the golf club. Golfers occasionally stop for a libation, so there is a connection between the two.

Mr. Howard Wilson: There are often these kinds of connections, Mr. Clark, but I determined that it was not as direct as it had to be in order to arrive at a conclusion that the Prime Minister retained a financial interest in the auberge.

The Chair: Thank you.

Thank you very much, Mr. Clark.

Mr. Wilson, I want to thank you for entertaining those questions and for being here today. I would refer members to your testimony of May 6, 1999, if they'd like to reread some of the same answers that have been provided today, and some of the same questions.

We're now going to move to the Lobbyists Registration Act. I would ask that Diane Champagne-Paul, the registrar, join us at the table. I would encourage, of course, everyone to stay for the Lobbyists Registration Act because it will be quite an exciting meeting as well. Are we losing the momentum of the meeting?

Mr. Joe Clark: I have a point of order, Madam Chair.

The Chair: We're just going to suspend for a minute because it's a little noisy. We'll suspend for just 60 seconds.

• 1616

• 1617

The Chair: Could I have some order in the room? I'd like to reconvene.

Mr. Joe Clark: Madam Chair, could I say something on a point of order?

The Chair: One second, please, Mr. Clark, I'm not reconvened. Can we have everybody take their place and conversations over here cease or be taken outside? That would be great.

Mr. Day, take your conversation outside or sit.

Mr. Stockwell Day: Madam Chair, I'm not talking.

The Chair: Could you please ask the person who's speaking to you to take the conversation outside?

Mr. Stockwell Day: We're all adults here, Madam Chair, and I'm sure people can conduct themselves accordingly.

The Chair: I call the meeting back to order.

Mr. Clark.

Mr. Joe Clark: Thank you, Madam Chair. I wouldn't want, nor would other committee members, to lose sight of the motion introduced by Mr. Day. My understanding is that there is a period of—

The Chair: It's 48 hours.

Mr. Joe Clark: —48 hours. I would like an assurance, and I'm sure we all would, that the motion will come back within 48 hours so there will be an opportunity to vote upon it. Am I correct in assuming that the motion will be back before the committee within 48 hours and there will be a vote on it?

The Chair: Provided that the motion is in order, the motion will be back before the committee in 48 hours. I have not had a chance to review the motion, and that is my responsibility to do as chair.

Mr. Joe Clark: You will advise committee members of your judgment as to the orderliness of this very straightforward motion?

The Chair: Mr. Clark, I will more than do that. It's public at the next meeting. I didn't mean to upset you there.

We're now going to turn, once again, to the very exciting topic of the Lobbyists Registration Act. I can see that the media is going to follow this with great interest.

• 1620

I'm going to turn it over to Diane Champagne-Paul, the registrar, for some opening comments. Everyone should not only have a copy of the opening statement, but they should also have received a package in their office about the Lobbyists Registration Act that includes the act itself, the code of conduct, the advice, the registry, and a guide to registration.

Madame Champagne-Paul.

Ms. Diane Champagne-Paul (Registrar, Lobbyists Registration Branch, Department of Industry): Thank you, Madam Chair.

I'm very pleased to appear before you this afternoon to provide you with information on and insight into the operation and administration of the Lobbyists Registration Act since it came into force on January 31, 1996.

Mr. Joe Clark: Madam Chair, I'm sorry to do this, but could I raise another point of order?

The Chair: Technically, once the witness has began, I can't allow that. You have to wait till she's finished now, just to be consistent with Mr. Day.

Madame Champagne-Paul.

Ms. Diane Champagne-Paul: As registrar of the lobbyists registration branch, I am responsible for the administration of the act's information disclosure provisions and the maintenance of the public registry. As a result of the previous parliamentary review, the original act of 1989 was substantially strengthened in 1996 with the introduction of enhanced disclosure requirements.

All lobbyists are required to disclose certain information. This includes the name of the client, corporate or organizational employer; the names of the parent or subsidiary companies that would benefit from the lobbying activity; the organizational members of coalition groups; the specific subject matter lobbied; the names of the federal departments or agencies contacted; the source and amount of any government funding received; and the communication techniques used, such as grassroots lobbying. Corporations and organizations must also provide a general description of their business or activities.

The act requires individuals to register when they undertake lobbying activities; that is, when they communicate with federal public officeholders, either formally or informally, in attempts to influence the making, developing or amending of federal legislative proposals, bills or resolutions, regulations, policies or programs, as well as the awarding of federal grants, contributions or other financial benefits.

[Translation]

The Act provides for three categories of lobbyists, namely, consultant lobbyists, in-house lobbyists (corporate) and in-house lobbyists (organizations).

Consultant lobbyists are individuals who, for payment, lobby on behalf of a client. Consultant lobbyists are also required to register if they undertake to arrange a meeting between their client and a public office holder, and if they lobby for the awarding of a federal contract. Consultant lobbyists may include government relations consultants, lawyers, accountants or other professional advisors who provide lobbying services for their clients. They must register within 10 days of their undertaking.

In-house lobbyists (corporate) are employees or corporations that carry on commercial activities for financial gain who lobby as a significant part of their duties. These employees of a company are usually full-time officers who devote a significant part of their duties, interpreted it as meaning 20% of their time, to public affairs or government relations work. An employee meeting this criteria must register within two months of his or her duties comprising lobbying activities as a significant part of their duties.

In the case of in-house lobbyists (organizations), which include non-profit organizations such as associations, it is the senior paid officer, usually the Executive Director, who must register on behalf of the organization when one or more of its employees lobby federal public office holders where the accumulated lobbying duties by all paid employees constitute a significant part of one employee's duties, interpreted as meaning 20% of one employee's time. The senior officer must register within two months after the commencement of the lobbying activities reaching the 20% threshold.

• 1625

As of March 16, 2001, there were 785 registered consultant lobbyists, 301 registered corporate lobbyists and 364 registered senior paid officers for non-profit organizations and interest groups.

One very important development has been our ability to use the Internet to ensure transparency as well as administrative efficiency. Today, 98% of registrations are filed electronically. Internet access using the Strategis Website, Industry Canada's gateway to the Internet, not only enables lobbyists to file their registration forms on-line, without charge, it also renders the registry completely available to the Canadian public on a 24-hour, seven-days-a-week basis, thus enabling anyone to conduct searches to retrieve information on lobbyists.

On this point, it should be noted that for the period beginning with the 1st of April 2000 to March 11, 2001, there have been 30,033 visits to the Lobbyists' website with about 167,496 pages being accessed by the users during the same period, quite an impressive number for what may be called a small program.

Our website address is http://strategis.ic.gc.ca/lobbyiste. The use of the Internet has also proven to be a very efficient use of limited available resources as it enables the Lobbyists Registration Branch to operate with the use of only two individuals on an annual budget of less than $200,000.

With respect to our website, I also wish to mention that in order to keep abreast of technological changes that have occurred since the introduction, in April 1996, of the Lobbyist Remote Registration System, we are currently looking at making it even more user-friendly by providing new features such as providing an easier account-creation process, an easier interface/display and the ability of downloading forms on-line, to name a few.

Madam Chair, I have concluded my comments, and thank you very much.

[English]

The Chair: Thank you.

Mr. Wilson also has some opening comments to make.

Just to remind you, everyone also received a copy of the letter from Minister Tobin.

Mr. Wilson.

Mr. Howard Wilson: Thank you, Madam Chair. I want to speak to a few points Mr. Tobin has raised with the committee. He gives an assessment of how the act has been working since its last change in 1995.

I think one of the most important points Diane referred to was that 98% of registrations are done electronically, at no cost to the registrant. We save money on that and they save an awful lot of time. The registry is available on the Internet, which was a point of great preoccupation to the committee that last examined this matter. We do not receive calls from members of the public or the press because they can find the registrations themselves on our website; they're up there instantly.

For example, we have a 30-day running automatic renewal of recent registrations, which allows members of Parliament, the Canadian public, and the press to find out who has been registered.

In his letter, Mr. Tobin raises some areas that he would particularly like the committee to examine. One is whether there could be an improvement in how the act deals with the registration of corporate lobbyists. In 1995, Parliament made a useful distinction between organizations like chambers of commerce, associations, and trade unions on the one hand and corporations on the other. But these groups also had different registration requirements. For associations, these turned on the notion that if the sum total of all lobbyists in the association represented a significant part of one person, which is 20%. Then the head of that organization would make a filing on behalf of the association, chamber of commerce or trade union. This means the registry is quite accurate and detailed on these.

• 1630

For corporations, the figure was 20% of any individual. So some corporations might have several filings and others might not have any. We thought this might be a useful area for the committee to look at, to see whether there's merit in at least having the same approach—but making a distinction between the two, as is now the case.

There is also a more technical issue of maybe requiring consultant lobbyists to review their filings. We sometimes find that people have inadvertently neglected to remove their registrations. We could do that electronically, on a six-monthly or a yearly basis. That's an area to look at.

The final area is one of enormous importance to us, and one we hope this committee will address. Last year we learned that there are some serious enforcement questions. We believe we have a very high standard of compliance: because the system is on the Internet, people are generally aware of whether somebody is registered or not. There's a high degree of awareness about that in Ottawa, Toronto, and Montreal.

If we receive a complaint that some individuals outside those three sectors have not registered, the registrar will get in touch with those people and draw their attention to the act. Most of the time, she's able to ascertain either that they are not in fact engaged in lobbying or that they are but weren't aware of their obligations—and then they do register. But there will always be some people who refuse to register, and an enforcement provision is essential for those cases.

The way the act is currently worded, lobbying is when—for example, with respect to consultant lobbyists—every individual who, for payment—okay, you have to be paid; you're not doing this in a pro bono fashion—on behalf of any person, which is the client, undertakes to communicate in an attempt to influence. The problem that came up this past year was that we thought the operative word was “communicate”. You had a client, you were getting paid, and you were speaking to a public office-holder about changing a bill or making a regulation. But Department of Justice prosecutors said the operative words were “an attempt to influence”. The test they believe has to be applied—I think you'd probably be sensitive to this, Mr. MacKay—is whether the communication is an attempt to influence. In practical terms, according to Justice prosecutors, the standard is equivalent to securing an influence-peddling conviction under the Criminal Code.

This caught us by surprise, because lobbying per se is not an illegitimate activity. We merely want people to register, and we thought the operative word was “communicate”. So we took a look at the American legislation, which says “communicate with a public office-holder with respect to or in regard to”.

The minister is asking the committee to look at this point quite seriously.

The last point I would like to make is that this committee will no doubt receive a great number of proposals on how the act can be improved, expanded, whatever. The minister has said that some of these ideas may well have merit, but he suggests that the committee use a standard to judge them.

• 1635

He suggests a standard found in the preamble to the act itself:

...free and open access to government is an important matter of public interest; ...lobbying public office holders is a legitimate activity; ...hat it is desirable that public office holders and the public be able to know who is attempting to influence government; [and]... a system for the registration of paid lobbyists should not impede free and open access to government;

That language has been there since the act first came into being in 1988, and it has some strengths. Those are the points that the minister, I think, would want me to accent. Thank you.

The Chair: Thank you very much, Mr. Wilson.

Mr. Clark has withdrawn his point of order. I understand he had his question answered, so he no longer has that question.

Beginning with questions, Mr. Manning, please—oh, I'm sorry, Mr. Day.

Mr. Stockwell Day: Thank you, Madam Chair. We'll be splitting our time here. I appreciate that.

Mr. Wilson, there was an investigation by the RCMP under the Lobbyists Registration Act involving a Mr. René Fugère, who was a representative, though apparently unpaid, of the Prime Minister, who often made announcements on the Prime Minister's behalf. Shortly after several government grants had been made to various constituents of the Prime Minister, Mr. Fugère received payments, including an $11,000 payment from Yvon Duhaime just days after the Auberge Grand-Mère received a $164,000 HRDC grant. Now, some people said this could be construed as toll-gating, as it's referred to. Unfortunately, the RCMP investigation into the matter was dropped.

Does this not show that the act, as currently worded, is actually unenforceable?

Mr. Howard Wilson: Well, it's this problem that I related to you in my opening remarks about enforcement and why the minister has in fact spoken to the point about the attempt to influence; that the standard that may be required in a court of law may be analogous to that of securing a conviction for influence peddling under the Criminal Code. That was far from our mind, and from the original drafters' minds when they constructed this code.

We believed that all that was necessary to fall within the scope of the act was that you were being paid by a client to make representations to the Government of Canada on behalf of one of the set-out provisions: change a regulation, get a contract, get a concession. The language, in an attempt to influence, according to prosecutors, sets a standard that would be very difficult to ever meet, first of all, because I don't think any of these people... these people are legitimate individuals; they're not criminals. So we ask that they register the fact that they're a lobbyist.

The Chair: Mr. Manning.

Mr. Preston Manning (Calgary Southwest, CA): I'd like to thank you both for your presentation, but I have two questions, and they're really more philosophical than technical.

You will know that Parliament and this committee will be considering a number of statutes where we will be requiring a high standard of ethical behaviour from others, in this case the lobbyists who are going to be considering that bill on the regulation of reproductive technologies, where Parliament has to demand high ethical standards of researchers.

We have, of course, the legal authority to make those demands: to demand higher ethical standards, for, in this case, lobbyists. But the question arises, does the Parliament and does the government have the credibility or the moral authority to require more ethical behaviour from others? I would submit that we don't because the relationship between your office and the Prime Minister and Parliament on ethical issues is not credible. There isn't the independence that we ask of others. There isn't the monitoring that we ask of others. There isn't the enforcement.

So my question is—and it's relevant to credibility, these kinds of statutes and others that we'll be looking at—how would you propose that Parliament regain its moral authority to insist on higher ethical standards from lobbyists or from anyone else?

Mr. Howard Wilson: I think the Lobbyists Registration Act, particularly in the form that it was passed in 1995, did a pretty good job of that. It asked that there be transparency on legitimate transactions that were occurring between people who were hiring lobbyists and the Government of Canada. In many ways, it is a simple statute, but it seems to me that it responded to some very real preoccupations.

• 1640

You will recall the period in 1988, when it was first passed, and what the concern of this town was about undue influence by lobbyists. That was very much in the air in 1993. When they undertook a review, there were continuing concerns that lobbyists were exercising undue influence, because there wasn't sufficient information about what they were doing, Mr. Manning. One of the things I don't hear, certainly not at the level we once heard it, is those claims, because I think there's more detail on what is happening than was the case in the past.

So from a certain perspective, I appreciate the broader question you pose. I happen to be a believer that you take small steps to continuing to improve these. However, this was one step that did work.

Mr. Preston Manning: May I ask one last question?

The Chair: Okay.

Mr. Preston Manning: I don't think that answers my question, though. When we go out as members of Parliament to any group—let's say lobbyists, although I've been concentrating more on genetic researchers—and say we're going to pass a law that requires them to practice a high ethical standard, what we get back today is their skepticism: the 37th Parliament is going to teach them about ethics, and is going to demand high ethical standards from them, when the government itself can't handle the simplest ethical issues, like whether it is right or wrong for a Prime Minister to call a bank? That's the question we'll get from the people we put the demand on.

So my question is, how in heaven's name can the government demand a higher ethical standard from those people than it practises itself? How do you, as the ethics counsellor, propose that we answer those questions?

Mr. Howard Wilson: I think parliamentarians have every right to define the basis on which lobbying should take place. I would argue, however, that you don't want to go so far as to turn it into a regulation. This is a registration act. It's to give a certain amount of information. I think it happens to work well. I think it has happened to improve the debate enormously. Let me give you an example.

A couple of years ago, when Onex made its bid for Air Canada, there was intense interest on exactly who was hiring which lobbyists. Air Canada was hiring lobbyists, Canadian Airlines was hiring, Onex was, and there were no doubt several others. My office received exactly two telephone calls, Mr. Manning, because everything was available on the Internet. Now, I think that changes the mystery of the debate. There was no mystery about who was being hired to make representations on behalf of which corporate interest.

It's a small step perhaps, but I don't think you want to throw this out because there may be wider preoccupations with some other area. I think this is an area in which you can take some credit.

The Chair: Thank you very much, Mr. Manning.

Just to clarify for the committee, we all speak on our own behalf. I have no authority to speak on behalf of all members at the committee. When Mr. Manning speaks, he's speaking on his own volition, but other members may not share the same opinion as his line of questioning.

Mr. McTeague.

Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.): Thank you, Mr. Wilson and

[Translation]

Ms. Champagne-Paul. Welcome to our committee. I am very interested in your comments, however, one issue, namely, conflict of interest, was not raised.

[English]

One of the interests I have when looking at your 1994 Conflict of Interest and Post-Employment Code for Public Office Holders is the whole question of what is defined as a public office-holder. It lists an interpretation on 4(1) that includes, among other things, ministers of the crown, parliamentary secretaries, and members of the ministerial staff, except public servants.

If I move further ahead to the actual obligations of those individuals after leaving office, it states the following:

Nor shall former public office holders give advice to their clients using information that is not available to the public concerning the programs or policies of the departments with which they were employed, or with which they had a direct and substantial relationship during the period of one year immediately prior to the termination of their service in public office.

• 1645

Mr. Wilson and Madam Champagne-Paul, there seems to be a difficult balancing act between public demands for government to act entirely for the common good versus a decision-making process that can be best influenced by lobbyists who obtain a policy that is, in my view, their client's particular interest.

I suspect there's even greater concern to Canadians that this rather cosy relationship can often exist between decision-makers and those lobbyists who were once involved in the decision-making process. What I think is extremely troubling, at least for some, is the easy access and congenial familiarity that some lobbyists have with key decision-makers—for example, former staffers in ministers' offices with ministers, the PMO, the PCO, former members of Parliament, etc. I think you get my point.

Do you believe the current one-year cooling-off period from lobbying the government in areas in which former senior public servants or senior political employees were active is really an effective measure? Do you think this cooling-off period can be made stronger by, for example, imposing a two-year ban rather than simply a one-year ban on lobbying government by former senior public service employees and their political staff?

Mr. Howard Wilson: The post-employment provisions are in the conflict of interest code for precisely the concerns you have raised. There might be a perception that in their first year after leaving office someone will be able to take advantage to make representations on behalf of others with some sense that they have a preferred status. That's why we have a cooling-off period of one year, both with respect to who you can take a job with—that is, if you have direct and significant official dealings with some company, you are not able to take a job with that company—and in that you cannot make representations back to those departments you had direct and significant dealings with.

This is essentially a balance. It's a balance between people not being in a position to take undue advantage of their last year in office and remembering that if you don't afford people the opportunity to build on their experiences and get on with a future life, it's going to be very hard to attract people into this life at all.

Mr. Dan McTeague: Mr. Wilson, I mention this in the context of rather disturbing and alarming commentary in academic and other circles about the intensity of the concentration of power and decision-making in the hands of the PMO and the PCO. I'm wondering about this in light of the concern that individuals who are intimately involved with decision-making may, for instance, take a sabbatical and be off for three months and may then go into an election three or four months later. They've exhausted seven, eight, or nine months of the one year, but they're really still fresh in terms of the file and their contacts are still very vivid.

Combined with the issue of conflict of interest within companies, organizations, or legal departments that provide advisory services to government while simultaneously representing a private sector client—the so-called Chinese wall effect—when you put them in front of the public and you put them in front of representatives, are these effective means to ensure the conflict of interest guidelines we have established are strong enough and are not considered by some to be the farce they are?

Mr. Howard Wilson: My experience in the past several years is that they have been working quite well. We meet frequently with, for example, political staffers who, if they're going to be having continuing dealings with government, certainly have them with ministers and other senior officials.

It can be quite restrictive, and sometimes the advantages are less real than they might appear. This is particularly the case if there is a fairly major electoral change.

I think the code has worked well in that we communicate annually with each one of these individuals who is subject to the code. We talk to them in advance of their departure about what limitations are going to be placed on them, about what they can and cannot do. I can tell you that these prohibited activities that you're raising—that is, who you can take a job with and who you can lobby—can be very limiting.

• 1650

Mr. Dan McTeague: Madam Chair, this is the last question, and I'll be very quick.

Mr. Wilson, you're relying on the Chinese walls as setting a standard that the Canadian Bar Association has put forward in that potential conflict situation where a firm has two partners or two lawyers sitting one beside the other, one is acting on behalf of the government and the other one is providing advice to a client. Do you not believe too much reliance on the honour system is in fact part of the reason there may be a question as to the integrity of the whole Chinese wall process?

Mr. Howard Wilson: Chinese walls are very hard to maintain. I'm not arguing that the conflict of interest code here in fact does use Chinese walls. There are occasions where you have to put them in place in order to protect the integrity of certain information. This is a major problem with law firms and accounting firms, and will increasingly be the case as you get larger and larger firms being formed.

But that's not the subject of the conflict of interest code. We're talking about public office-holders. There will be occasions when somebody, because of their personal interests, is not going to be able to deal on certain files simply because they have a private interest that might be furthered by dealing with that. But by asking people to resign their past activities, you in effect create a situation in which you do not have to use Chinese walls. They did have a connection, but it has been severed.

The Chair: Thank you very much, Mr. McTeague.

I would remind committee members that we are under a timeline here. Shorter questions and answers from both members and witnesses will mean more people will have more time overall.

[Translation]

Mr. Brien, please.

Mr. Pierre Brien (Témiscamingue, BQ): About a year ago, you reviewed the case of a lobbyist who had organized funding activities for a government MP who, I believe, held the position of Secretary of State at that time. This was Mr. Peterson, who had hired a former colleague turned lobbyist.

At that time I read a press clipping in which you had said that you would be initiating an inquiry on the case. By what authority do you review a lobbyist organizing funding activities? Is this under a code of ethics, under the Lobbyists Registration Act? What precise problem were you reviewing at that time and what was the result of this review?

[English]

Mr. Howard Wilson: This is a matter that has been raised with us and is under review. I'm not in a position to comment on it at this moment.

[Translation]

Mr. Pierre Brien: I want to make sure that I understood properly. Is some other aspect still being reviewed right now?

[English]

Mr. Howard Wilson: It's a matter that I intend to deal with. I don't believe it falls under the provisions of the lobbyists' code of conduct.

[Translation]

Mr. Pierre Brien: So it is the code of ethics in this case.

[English]

Mr. Howard Wilson: It's a matter in which there has been an allegation made about a conflict. I'm not so sure it exists, but I haven't been able to deal with it in substance as yet.

[Translation]

Mr. Pierre Brien: This has been going on for a year now. Let's hope that, one day, you will be able to draw some conclusions in this case.

According to section 5(1) of the act, according to what you have said, there is some ambiguity with respect to the ability to use the current wording to eventually lead to convictions, if required, for cases where someone has failed to register or to comply with the legislation. I would imagine that you have some suggestions that are a bit more specific that would enable us to strengthen the current wording. Could you share your thoughts with the committee members?

Mr. Howard Wilson: Minister Tobin, in his letter of March 9, wrote, on page 4:

In particular, the committee could consider whether the words “in an attempt to influence” contained in sections 5, 6 and 7 dealing with the filing of returns by lobbyists, effectively preclude proper enforcement of those provisions.

That is a clear and specific idea that the minister has put forward on this issue.

• 1655

Mr. Pierre Brien: Yes, but let's be more specific than that. Let's suppose that we reach the conclusion, as several others have already done, including attorneys, that a wording like that does not enable us to make any type of determination whatsoever. Have you thought of any possibilities? Have you thought of any ways to improve the wording so as to avoid the confusion created by the current wording?

Mr. Howard Wilson: Right now, we think that if we were to remove the words “in an attempt to influence”...

Mr. Pierre Brien: Just remove them?

Mr. Howard Wilson: Yes. With a small addition, this would be a simple and clear solution.

Mr. Pierre Brien: Fine.

[English]

The Chair: This is your final question.

[Translation]

Mr. Pierre Brien: Let's talk in more general terms now. With respect to the identity of lobbyists, is there any additional useful information that we could obtain about lobbyists that would tell us not only with whom they meet, but who is paying them, how they are paid, how much money is spent on lobbying by those who are paying them? Is there no way that we can find more information? Do you feel that we currently have an adequate amount of information or is there any other relevant additional information that we could get that would improve our ethics practices?

[English]

Mr. Howard Wilson: I'm guess I'm of the view that we've struck a pretty good balance in terms of the information. We get very few complaints that the information on the registry is not sufficient to determine who has been hired and what is the purpose of their representations.

I find as a practical matter that there's often an attitude that if some information is useful, then more information is better. I do believe the committee should be very conscious of any proposition that comes to the table about vastly expanding the amount of information required, and use the test of the preamble.

A case may be made for more information, but my view is that in 1995 the committee did a very good job of restructuring this act dramatically. That's not to say there's not a case to be made for honing the act, but I don't think we're at the point where we need to contemplate major restructuring. That's a personal view.

The Chair: Thank you.

[Translation]

Thank you, Mr. Brien.

[English]

Again I would remind questioners to keep their questions shorter.

Mr. Bryden, please.

Mr. John Bryden (Ancaster—Dundas—Flamborough—Aldershot, Lib.): I was on the committee in 1995, and certainly we had no problem with the idea that lobbying was a legitimate activity and that politicians were there to be lobbied. Where we did have a problem, though, was on the question of bureaucrats being lobbied. The focus of our concern was to achieve as much transparency as possible with respect to the bureaucracy and its relationship with lobbyists.

Speaking to you as somebody who is particularly interested in the ethics of public office-holders, my question is, in the interest of government transparency, would it not be particularly useful to get the names of the public office-holders who are being lobbied, the specific names rather than just the government department?

Mr. Howard Wilson: This is a proposal that, in all fairness, troubles me, and I'll tell you why. I'm a strong believer that public servants in this country should be as open as possible to Canadians who want to go and talk to them about their responsibility. Some of these will be lobbyists, who are then required to register, and others will be just average citizens. I think it very important that public servants, in carrying out their responsibilities, be open to consultation, and so on.

• 1700

I think if all senior public servants were required to register just exactly who they were talking to, it would have an unintended consequence, which is that there would be fewer conversations than I think are probably desirable. That's a fear, and I think the committee will want to debate that.

Mr. John Bryden: My problem is also with mid-level bureaucrats. I have had my own experience where lobbyists were obviously targeting not senior bureaucrats but low-level bureaucrats, where they might take them out to lunch and do this, that, and the other thing. Is this not something we should be very concerned about, because these low-level bureaucrats often set out policy papers and this kind of thing?

Mr. Howard Wilson: I think it's part of the exchange that should take place in a modern-day government. I think there are certain rules about accepting hospitality and gifts that are set by Treasury Board, and certainly set by my code, as to what is appropriate and inappropriate. But I think it's important that there be open exchanges between those who are having dealings.

Mr. John Bryden: I have difficulty accepting a thesis that there can't be an open exchange. I can be open with the people who come to me. I have no difficulty talking to them, and the lobbyists have no difficulty coming and talking to me. Quite frankly, as a parliamentarian and a former journalist, I could care less about the name of the lobbyist. I want to know who in the bureaucracy the lobbyist is approaching. If we're going to ask the bureaucracy to be transparent, I would have thought this level of transparency is a choice you would want to support.

Mr. Howard Wilson: As I say, I've spent all of my career in the public service. I spent most of it in the foreign service and in trade policy. I was certainly lobbied continuously. I felt that was actually part of my responsibilities. I found it very dangerous to take merely one point of view in terms of trying to put advice forward to my minister. I tried to keep things as open as possible so that I could speak to as many people as possible in order that the advice I gave to ministers, which ultimately was the decision, was the best possible advice. So I found it essential to keep those lines open. That's my own personal experience.

The Chair: This will be your last question, Mr. Bryden.

Mr. John Bryden: I'll give you an example, and perhaps you could comment on it.

The Chair: Briefly.

Mr. John Bryden: The International Fund for Animal Welfare and a number of other very militant animal rights organizations lobbied the justice department—it was in the lobbyist papers—with regard to the animal rights legislation policy paper that was being developed by the justice department. Neither through access to information nor any other instrument was I able to determine who it was in the bureaucracy—whether it was high level, low level, or whatever—this enormous effort was being directed toward. Is this not a concern to you as an ethics counsellor who is vigilant in looking at the behaviour of governments and officer-holders? Is this not something we should all be concerned about?

Mr. Howard Wilson: If I understand you correctly, they had registered their activities and they said which departments—

Mr. John Bryden: They said they were going to the justice department, but I was never able to determine who they were lobbying. I was never able to get it through access to information. I was never able to tell whether it was a high-level bureaucrat or a low-level bureaucrat. The information was denied me entirely.

The Chair: Thank you, Mr. Bryden. I think you've made your point. Ms. McDonough.

Mr. John Bryden: He didn't comment.

Mr. Howard Wilson: I can't comment on it.

Mr. John Bryden: All right. Thank you. That's a comment.

The Chair: Ms. McDonough.

Ms. Alexa McDonough: I'd like to return to the address you made in February 1999 in Canberra in which you said—and I want to quote so I don't in any way distort or misinterpret:

For example, we are not as advanced as Australia in introducing strong ethical systems into the public service.

I wonder if you could comment on what those more stringent provisions are in order to have the kind of strong ethical system you feel we require and whether the lobbyist registration provisions that are now in place fall short in the way you've suggested here.

• 1705

Secondly, I wonder if I could ask you to comment on a concern that arises again and again in my riding and in other places as well about a situation that's clearly not captured by the Lobbyists Registration Act. That is public servants who in the process of privatizing and contracting out effectively negotiate for themselves jobs in the private sector and, having created such privatized jobs, literally go out one door and in the other and take up that new job doing business with government. This seems to me to be of scandalous proportions. Can you point out to us where the protection is against such blatant conflict of interest? The most frequent examples that have been brought to my attention, perhaps because of my coming from Nova Scotia, are in the area of DND and also, more recently, I'm sorry to say, in Human Resources Development. Can you comment on what protection now exists and where we need to strengthen and make more stringent the protections against such blatant conflict of interest?

Mr. Howard Wilson: The first question was about Australia. What I was complimenting the Australians on was some very extensive work they had done in terms of introducing ethics and value systems into the public service. This was not a matter regarding ministers, parliamentarians, or those people dealing with government, but rather a very strong system of trying to deal with the fact that governments were changing in a very profound way. I was quite impressed by a lot of the work. I said that, in my judgment, they were ahead of what we were doing. Since that time, we've received a report from John Tait, a former Deputy Minister of Justice, since died, who wrote a report on values and ethics. This is being dealt with by Treasury Board and the Public Service Commission. I just thought the Australians had gone about it in a very impressive way and said so at that time.

With regard to the second question, I cannot speak more generally about the post-employment issues you raised and Mr. McTeague raised earlier. I can speak to it about those people who are subject to this code.

I can also speak to it in terms of how the system applies to senior officers and officials in the Department of National Defence because my office is part of a decision process as to when an officer is taking retirement, what rules do apply as to whom he or she can take employment with, and whether or not they can lobby back bits and pieces of the Department of National Defence.

The way the system is applied is that it's very specific. They cannot take employment with anyone with whom they've had significant official dealings in their last year in office, nor can they lobby back on that company's behalf or another company's behalf to the Department of National Defence or any of the individual forces for one year. So I think it has dealt in an important way with perceptions in the past that this was not always the case.

The Chair: Thank you very much, Ms. McDonough.

We're really running out of time here, so I'm going to ask everyone to try to be extremely brief. Ms. Torsney.

Ms. Paddy Torsney (Burlington, Lib.): In terms of checks and balances, is it not possible in terms of the volume... Perhaps Madame Champagne-Paul should be answering as well. As a lobbyist, if someone calls whatever level bureaucrat, is it not possible that there could be a system whereby that person should register somewhere: I've been called by Bob's-your-uncle community group or Jane who works for this big lobbying firm representing such and such a client? There would be some kind of check and balance so that you can have a check saying, has that group registered, or is that group so small that there's no need? You can continue to have that important dialogue, as you say, but there are further opportunities to make sure the act is in fact being enforced.

• 1710

Ms. Diane Champagne-Paul: In fact, as you know, as I mentioned in my opening statement, we have a registry, which is completely available. It's in the public domain, and it's accessible by all Canadians—or anybody, for that matter. So that in and of itself has helped greatly because people can access it. Anybody who gets wind that maybe somebody is lobbying on an issue can go to that registry and see if this individual is appropriately registered. So that is one.

Now, as registrar, every now and then I will get calls, be they from bureaucrats or even private sector members, who will ask about a specific case. They will ask, “Well, is this individual registered or not registered?” We do the search, and they will probably give us the facts.

On the basis of that information, I'll make a query. I'll pick up the phone and I'll call the individual. I'll ascertain what the facts are, and then two outcomes will come out of that. Either the activities in question are not registrable under the act or they were not aware. Then we make them aware. We provide them with a package and information, and that will result in a registration.

I'm not sure if I'm answering your question, but that's—

Ms. Paddy Torsney: That's helpful, because I think that issue of transparency certainly is imperative. With transparency we get better information, and we can be clear about who's contacting whom and why, and whatever.

Decisions are made ultimately by parliamentarians, who are also accountable to the people. So, sure, somebody can lobby like crazy on a certain issue and ask and ask and ask, and be paid lots and lots of money to try to get somewhere on a piece of legislation, but that doesn't mean it's so. So if the information's there, and we have checks and balances in terms of people calling you, and I guess the general public having access to that information—

Ms. Diane Champagne-Paul: That's correct.

Ms. Paddy Torsney: —then that's helpful.

The Chair: Thank you, Ms. Torsney.

Just before we move on, Mr. Wilson has notified me that he has just received a letter, both in French and translated into English, from Industry Canada. Maybe, Mr. Wilson, you would like to speak to it and just indulge the committee, if they will.

Mr. Howard Wilson: Thank you.

The Chair: It's not from Industry Canada. I'll let Mr. Wilson explain what it is.

Mr. Howard Wilson: I don't want to appear to be excessively dramatic, but I have been given clearance to give to the committee a letter, which is an original in French, and we have translations, from Pierre Paquet, who is with Pouliot, Mercure, avocats. As a lawyer, he represents the golf club, and he has written to Industry Canada.

I'm sorry that this was not available somewhat earlier, but here it is. I would hope that those representatives would get a copy of this to their party leaders.

The Chair: Thank you very much, Mr. Wilson.

Continuing then, Mr. MacKay.

[Translation]

Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC): Thank you, Madam Chair. Ms. Champagne-Paul and Mr. Wilson, thank you for your presentation to the committee.

[English]

Mr. Wilson, I guess I have two questions that are of a technical nature.

The first deals with the Lobbyists Registration Act, which states in the preamble that it's desirable that public office-holders and the public be able to know who is attempting to influence. Mr. Tobin's letter echoes that same sentiment and encourages new ideas.

I want to know if you, as ethics counsellor, can tell the committee if consideration has ever been given to requiring ministers and the Prime Minister to file the type of return where the office that has been contacted, or attempted to be influenced in a decision to do with an arm's-length corporation... whether there has been the same thought given to having a requirement that they log these contacts. That is, sort of a reverse onus, if you will, to have ministers contact your office as to those contacts.

• 1715

Mr. Howard Wilson: This was debated the last time, and it had two aspects to it. One was whether or not public office-holders should be required to say to a lobbyist, are you a lobbyist, have you registered? It was felt that there should not be an enforcement issue, that it was an obligation on the part of the lobbyist to do this rather than having public office-holders act as a point of enforcement.

There was a serious question raised that even if they hadn't registered, would you be acting properly by refusing to hear what their representation was? I've expressed a concern about logs being kept earlier, but I haven't heard too much on this point in the last while. Have you, Diane?

Ms. Diane Champagne-Paul: No, I haven't really.

Mr. Peter MacKay: So you've considered it, but you're not favourably disposed to pursuing it?

Mr. Howard Wilson: I don't think the case has been made.

Mr. Peter MacKay: All right.

Secondly, the Lobbyists Registration Act gives you powers of investigation—powers that, in my reading of it, are quite broad. It states quite simply that they're the same as a superior court of record, and that includes such things as summonsing, interviewing people under oath, compelling individuals to produce documents, receiving and accepting information.

So you have some fairly broad-reaching powers. They have to do with enforcement, and they even go so far as to say whether or not it would be admissible in a court of law. So this is a fairly broad power. It puts lobbyists, potentially, in a fair bit of jeopardy if you choose to exercise these powers.

I've read the code of conduct for public office-holders. Does the ethics counsellor have the same powers to enforce the conflict of interest for public office-holders as he would under the lobbyists' code of conduct? There appears to be an anomaly. If not, is it because the code of conduct for lobbyists is enshrined in legislation and the public office-holders' code is not? Is that the difference, and is that why the same powers don't exist?

Mr. Howard Wilson: The background was that, in 1995, there was a strong desire that there should be some standard being expressed by the Government of Canada as to how lobbyists should interact with us.

So the first charge that was given me was to, in effect, develop a code. But it was very much to be a code. I did so after extensive consultation, and that is now part of the overall scheme.

It was also felt, however, that there should be very, very strong investigatory powers, and those were provided to me. There is not an equivalent provision in the conflict of interest and post-employment code for public office-holders. It's a condition of employment that they honour these obligations.

Mr. Peter MacKay: But there's a higher standard for lobbyists, you would agree, than there is for public office-holders, based on this legislation.

Mr. Howard Wilson: Well, I would say that I have greater powers of investigation—

Mr. Peter MacKay: So you're holding them to a higher standard.

Mr. Howard Wilson: —but I would not say there is a higher standard, because one of the great strengths of a code, as opposed to a piece of legislation, is that it has the ability... For example, the principles that are set out in a conflict of interest code say that public office-holders shall act with honesty and uphold the highest ethical standards so that public confidence and trust in the integrity, objectivity, and partiality of government are conserved and enhanced.

I'll only go to the next one—there are ten—that public office-holders have an obligation to perform their official duties and arrange their affairs in a manner that will bear the closest public scrutiny. Obligation is not fully discharged by simply acting within the law.

I think that is a fair standard that Canadians should expect of those in public life.

Mr. Peter MacKay: I agree that those are nice words.

The Chair: Last question.

Mr. Peter MacKay: Thank you, Madam Chair. But in terms of actual teeth and enforcement, there is a much higher standard being applied here when it comes to lobbyists, in terms of the powers of investigation, in terms of how far afield you can go. I would suggest that if we're looking for ways to improve just the perception, let alone the actual use, of this code as pertains to public office-holders, if we had similar enforcement mechanisms, that would go a long way.

• 1720

Mr. Howard Wilson: I think the committee should keep in mind the fact that the investigative powers do not lead to any fine or penal time. I do have these extensive powers, but all they result in is a report that must be tabled in Parliament. There is no discretion involved. Once the investigation goes ahead, there shall be a report.

The Chair: Thank you. Thank you very much, Mr. MacKay.

We have bells going, which means we have a vote at 5:30 p.m.

Mr. Alcock and Ms. Jennings have not had the opportunity to ask a question. We'll go to Mr. Alcock, who has a brief question, and that will be followed by Ms. Jennings' brief question. Mr. Wilson will reply.

Mr. Reg Alcock (Winnipeg South, Lib.): Thank you, Madam Chair. My questions are of course always brief.

I am sufficiently disturbed by something that happened here. I want to make a comment and, Mr. Wilson, you can choose whether you reply to it or not.

When I was first elected to the legislature, I quickly learned that in a world of hot media, if one stands in front of a camera and says things that are full of emotional drive, you get lots of attention. If you are gentle, reasonable, and thoughtful, you are ignored. This sometimes leads parties, if they are desperate for attention, to use words like “liar” and other such language in their public debate.

Now, I don't argue that we need these codes. I think we need to know where the boundaries are, and, Mr. Wilson, you know that I have called you from time to time to say that I don't understand what the ground rules are and to ask if you can help me understand how this goes.

Mr. Howard Wilson: Yes.

Mr. Reg Alcock: I have enormous respect for the way you conduct yourself, but I'm really concerned when I hear statements like the one made earlier today, that somehow the House of Commons of Canada has no moral authority to talk about ethics. Are you aware of some terrible outbreak of lawless or dishonest behaviour on the part of members that makes it impossible for us to do this?

I think Mr. Manning was talking about some place other than his own caucus. He was talking about the entire House.

It just disturbs me when we present ourselves this way because I think it does a disservice to all of us, on both sides of the House.

Unfortunately, I don't have a solution, but it just strikes me that you are in a position that calls for enormous sensitivity in your judgments. I think you do it extremely well. I don't know if you can help us get over our penchant for self-immolation on some of these issues.

Mr. Howard Wilson: Mr. Alcock, I have the highest admiration for the people who serve in the House of Commons, given your enormous travel schedules and long hours, all at an important personal cost.

As most Canadians do, I probably find from time to time that the rhetoric gets a bit inflated, but I think that some very good work comes out of committees. It is certain that we are looking forward to seeing the product of your deliberations on this. I think that you should do what you do in a professional manner and get it to us before summer break, if at all possible.

The Chair: We can, Mr. Wilson.

Ms. Jennings, you may ask your question, but very quickly.

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): I will try to be very brief.

I'd like to come back to some of the statements you made about the time you were in Australia, about the ethical standards that exist for the civil service in Australia as compared to what's been established in Canada. Am I mistaken as to the fact that there was a royal commission into corruption in New South Wales back in the mid-nineties? The commission involved not only police corruption but corruption on the part of bureaucrats within government, and it led to a permanent commission on corruption that reports directly to their parliament. Perhaps Australia has been so proactive in bringing about strong measures because of their history, as clearly demonstrated by this royal commission. Not incidentally, the judge actually came to Quebec, consulted with people working on some of the major investigations into police corruption in Quebec, and gave expert advice to them.

• 1725

Is that a possibility?

Mr. Howard Wilson: It's factually correct, but there were two different things. One was the federal public service generating strong work internally, but in New South Wales, yes, there's the Independent Commission Against Corruption.

Ms. Marlene Jennings: That's right.

Mr. Howard Wilson: One can think of a friendlier title, but—

Ms. Marlene Jennings: One could, but my sense is that...

Mr. Howard Wilson: But they did have a serious problem.

Ms. Marlene Jennings: Yes, they did.

Mr. Howard Wilson: I don't know if they have such a problem nowadays.

Ms. Marlene Jennings: And it reached...

The Chair: I have to apologize, but we must adjourn. We have a vote.

I want to thank Mr. Wilson. I remind everyone of the letter he just presented to us and thank everyone for their participation. I apologize to anyone who didn't have the chance to ask their questions.

The meeting is now adjourned.