INST Committee Report

            This report details the findings of the House of Commons Standing Committee on Industry, Science and Technology’s four-year review of the Lobbyists Registration Act (hereinafter the LRA or the Act).

            The LRA establishes legal requirements for the registration of lobbyists. It also prescribes penalties and procedures for investigating and prosecuting breaches of those requirements. As well, the Act provides for the appointment of a Registrar of Lobbyists to administer the system, and the appointment of another official to investigate possible breaches of the Lobbyists Code of Conduct (hereinafter the Lobbyists Code). The person appointed to this role is the Ethics Counsellor, a function that is distinct from his other role as Ethics Counsellor, wherein he advises on the application of the Conflict of Interest and Post-Employment Code for Public Office Holders (hereinafter referred to as the Conflict of Interest Code). The Ethics Counsellor’s role under the LRA is properly within the scope of the current study, and the Committee heard considerable evidence and many recommendations on subjects related to that role: the process by which the Ethics Counsellor is appointed, as well as alternatives to it; and the creation of a conflict of interest code for MPs. The Committee remained mindful that some matters we discussed were not, in fact, related to the LRA; for that reason, although the issues were discussed, we have not made them the subject of any recommendations in this report.

            In evaluating the proposals brought forward by witnesses, the first question the Committee addressed was whether, in fact, the subject matter was one that flowed from the LRA. Issues such as the post-employment "cooling off" period, during which certain public office holders are prohibited from engaging in lobbying activities, is a subject addressed in the Conflict of Interest Code, and so fell outside the scope of the current study. For that same reason, there is no discussion in this report of creating a conflict of interest code for Parliamentarians. This is not to say that such a code may not be desirable, but that discussion is clearly beyond the current study.

            Still, the Committee heard valuable evidence about how the current system is operating and several recommendations as to how it might be improved. But according to what principles are the recommendations to be evaluated? Parliament clearly established those principles in the preamble to the LRA, which recognizes that free and open access to government is an important matter of public interest, and that lobbying public office holders is a legitimate activity. Those principles also require that public office holders and the public be able to know who is attempting to influence government, without impeding free and open access to government.

            The Committee attempted to evaluate the recommendations with a view to balancing the four principle objectives of the Act. For this reason, we considered carefully the calls for more disclosure (for example, disclosure of fees or of money spent on lobbying campaigns), with the important question in mind: would increasing the volume of disclosure actually achieve greater transparency? Or would it merely increase the costs of administration and compliance without providing any corresponding benefit?

            For the purposes of the Act lobbyists are defined as individuals paid to make representations with the goal of influencing federal public office holders. The Act requires lobbyists to register and disclose certain information. The information disclosed is made public through a computerized registry system. The Act distinguishes among three types of lobbyists:

An individual who lobbies on behalf of a client must register as a Consultant Lobbyist.

An employee of a corporation whose job involves a significant amount (20%) of lobbying for their employer must register as an In-House Lobbyist (Corporate).

The senior officer of an organization that pursues non-profit objectives must register as an In-House Lobbyist (Organization) when one or more employees lobby and where the total lobbying duties of all employees constitute a significant part (20%) of the duties of one employee.

            The Act requires that lobbyists submit certain information in returns and notify the Registrar of any changes to information previously submitted, including termination of lobbying activity. This information is submitted in a form and manner prescribed by regulation; as such, the forms and regulations function as an integral part of the implementation of the Act. Techniques such as checklists and narrative statements are used to facilitate the collection of information.

            Not all lobbyists or all lobbying activities are covered by the Act. Only paid lobbyists are required to register; unpaid lobbyists are not. The statute covers only direct attempts to influence certain government decisions. Thus, lobbyists have to register only if there has been some form of direct contact or communication with a person holding public office. The Act aims only at disclosing lobbying efforts; it does not attempt to regulate lobbyists or the manner in which lobbying is conducted.

            In addition to the Act, the Lobbyists Code of Conduct establishes standards of conduct for all lobbyists communicating with federal public office holders. The Lobbyists

            Code forms a counterpart to the obligations that federal officials are required to observe in their interactions with the public and with lobbyists. Canada was the first country to reinforce its lobbyist disclosure rules with a code of conduct. The onus to comply with the Lobbyists Code rests on the Consultant Lobbyist, the In-House (Corporate) lobbyist or the senior officer of the organization doing the lobbying, as the case may be.

            The Lobbyists Code begins with a preamble stating its purpose and context. This is followed by a series of principles that, in turn, are followed by specific rules. The principles establish a framework in terms of the goals and objectives to be attained, but they do not establish precise standards. The Lobbyists Code provides detailed requirements for behaviour in certain situations.

            The Ethics Counsellor is charged with investigating breaches of the Lobbyists Code. His powers of investigation are triggered where there is an alleged breach of a rule. Where the Ethics Counsellor believes, on reasonable grounds, that a breach of the Lobbyists Code has occurred, he must investigate and prepare a report for Parliament. The Act does not prescribe penalties for breach of the Lobbyists Code; neither does it specify how Parliament is to respond to a reported breach of the Lobbyists Code.

            Responsibility for administration of the information disclosure provisions of the Act and maintenance of the public registry is assigned to the Registrar, designated by the Registrar General of Canada (Minister of Industry). The Registrar heads the Lobbyists Registration Branch. The Registrar has no powers to investigate under the Act; matters requiring investigation are turned over to the RCMP. Branch staff examines all forms submitted for completeness and clarity. Inconsistencies or obvious omissions are communicated to the lobbyist for correction or for supplementary information. The Registrar may verify and demand clarification of information submitted by lobbyists. The Act also authorizes the Registrar to issue advisory opinions and interpretation bulletins in order to provide greater certainty regarding the registration provisions. The Act sets out penalties for non-compliance or for submitting false or misleading information. There is a two-year statutory limitation period for enforcement proceedings commenced by way of summary conviction. More serious violations are punishable on indictment, for which there is no limitation period.

            To give lobbyists an efficient system for registering and to give the public broad access to the information on lobbyists, both electronic registration, as well as access to data through the Industry Canada server, are free of charge.

            Committee hearings took place between March and May of 2001. Many issues emerged from the discussion, touching on many aspects of the public policy-making

            process. The Committee approached the hearings with an open mind, As well, prior to the hearings, several issues had been suggested to the Committee for its review:

            Whether the current quantitative guideline, which requires registration when lobbying is 20% or more of an employee's duties, should also include a qualitative sense; that is, should registration also be required where the lobbying would have an important effect or impact on the attainment by a company of its goals or objectives?

            Confidentiality and conflict of interest: Can a firm provide advisory services to a government department while simultaneously representing a private sector client with interests in that same department?

            The advisability of applying the In-House (Organization) approach to registering In-House (Corporate) lobbyists. Currently, the Act distinguishes between commercial "corporations," and "organizations," which include associations, chambers of commerce, trade unions, charitable societies, coalitions, etc. The filing requirements are substantially different between the two: the triggering element for either In-House (Corporate) or In-House (Organization) lobbyists is the same i.e. a "significant part" of the duties (defined as 20%). In-House (Corporate) lobbyists are individually responsible to register if 20% or more of their time is spent in lobbying activities. As a result, there may be several filings for a particular corporation, or none (i.e. if no employee spends more than 20% of his time lobbying). By contrast, In-House (Organization) lobbyist registration is triggered if the aggregated lobbying activity that the organization undertakes equals 20% of one employee’s time. The result is a comprehensive filing setting out overall objectives of the organization along with a listing of all employees engaged in lobbying, no matter how much time is involved. The question for the Committee’s consideration is whether it would be advisable to apply the In-House (Organization) approach to In-House (Corporate) lobbyists.

            Another area of inquiry related to Consultant Lobbyists. Currently, the LRA requires that a Consultant Lobbyist advise the registrar within 30 days of any changes to a filing, including the termination of an undertaking. This is sometimes overlooked. The Minister asked the Committee to consider the advisability of amending the Act by adding a provision specifically requiring Consultant Lobbyists reconfirm their filing annually (or every six months) in order to ensure that registry information is timely and accurate.

            Another issue to which the Committee was asked to direct its focus is the enforcement provisions, specifically the adequacy of the two-year limitation for prosecuting violations of the Act. The Minister, in his letter to the Committee, expressed "no reason to believe this period creates a difficulty but it would be timely to take advantage" of the Committee’s review to consider the issue, as well as other aspects of enforcement.