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37th PARLIAMENT, 2nd SESSION

Standing Committee on Industry, Science and Technology

EVIDENCE

CONTENTS

Wednesday, November 27, 2002

1530

The Chair (Mr. Walt Lastewka (St. Catharines, Lib.))

Mr. Howard Wilson (Ethics Counsellor, Department of Industry)

1535

1540

The Chair

Mr. Ken Epp (Elk Island, Canadian Alliance)

Mr. Howard Wilson

1545

Mr. Ken Epp

Mr. Howard Wilson

Mr. Ken Epp

Mr. Howard Wilson

Mr. Pierre Legault (Senior General Counsel, Legal Services, Department of Industry)

Mr. Howard Wilson

The Chair

Mr. Joseph Volpe (Eglinton—Lawrence, Lib.)

1550

Mr. Howard Wilson

Mr. Joseph Volpe

Mr. Pierre Legault

Mr. Joseph Volpe

Mr. Howard Wilson

1555

Mr. Joseph Volpe

Mr. Howard Wilson

Mr. Joseph Volpe

Mr. Howard Wilson

Mr. Joseph Volpe

The Chair

Ms. Jocelyne Girard-Bujold (Jonquière, BQ)

1600

Mr. Howard Wilson

1605

Mr. Pierre Legault

Ms. Jocelyne Girard-Bujold

The Chair

Mr. Andy Savoy (Tobique—Mactaquac, Lib.)

Mr. Howard Wilson

1610

Mr. Andy Savoy

Mr. Howard Wilson

The Chair

Mr. Brian Masse (Windsor West, NDP)

Mr. Howard Wilson

Mr. Brian Masse

Mr. Howard Wilson

1615

Mr. Brian Masse

Mr. Howard Wilson

Mr. Brian Masse

Mr. Howard Wilson

Mr. Brian Masse

The Chair

1620

Mr. John Bryden (Ancaster—Dundas—Flamborough—Aldershot, Lib.)

Mr. Howard Wilson

Mr. John Bryden

1625

Mr. Howard Wilson

Mr. John Bryden

The Chair

Mr. John Bryden

Mr. Howard Wilson

1630

Mr. John Bryden

Mr. Howard Wilson

Mr. John Bryden

The Chair

Mr. Ken Epp

Mr. Pierre Legault

Mr. Ken Epp

Mr. Pierre Legault

Mr. Ken Epp

Mr. Pierre Legault

Mr. Ken Epp

Mr. Pierre Legault

Mr. Ken Epp

The Chair

Mr. Ken Epp

Mr. Howard Wilson

1635

Mr. Ken Epp

Mr. Howard Wilson

Mr. Ken Epp

Mr. Howard Wilson

Mr. Ken Epp

Mr. Howard Wilson

Mr. Ken Epp

Mr. Howard Wilson

Mr. Ken Epp

Mr. Howard Wilson

1640

Mr. Pierre Legault

The Chair

Mr. Larry Bagnell (Yukon, Lib.)

Mr. Howard Wilson

1645

Mr. Larry Bagnell

Mr. Howard Wilson

Mr. Larry Bagnell

Mr. Howard Wilson

Mr. Larry Bagnell

The Chair

Ms. Jocelyne Girard-Bujold

Mr. Howard Wilson

Ms. Jocelyne Girard-Bujold

Mr. Howard Wilson

Ms. Jocelyne Girard-Bujold

1650

Mr. Howard Wilson

Ms. Jocelyne Girard-Bujold

The Chair

Ms. Jocelyne Girard-Bujold

1655

The Chair

Mr. Howard Wilson

The Chair

Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.)

Mr. Howard Wilson

Mr. Dan McTeague

Mr. Howard Wilson

1700

Mr. Dan McTeague

Mr. Howard Wilson

Mr. Dan McTeague

Mr. Howard Wilson

Mr. Dan McTeague

The Chair

Mr. Brian Masse

Mr. Howard Wilson

Mr. Brian Masse

1705

Mr. Howard Wilson

Mr. Brian Masse

Mr. Howard Wilson

The Chair

Mr. Brian Masse

Mr. Howard Wilson

1710

Mr. Brian Masse

The Chair

Mr. Joseph Volpe

Mr. Howard Wilson

1715

Mr. Joseph Volpe

Mr. Howard Wilson

Mr. Joseph Volpe

The Chair

Mr. John Bryden

Mr. Howard Wilson

1720

Mr. John Bryden

Mr. Howard Wilson

Mr. John Bryden

The Chair

Mr. Howard Wilson

Mr. John Bryden

Mr. Howard Wilson

The Chair

Mr. Howard Wilson

1725

Mr. John Bryden

The Chair

Mr. John Bryden

Mr. Howard Wilson

Mr. John Bryden

The Chair

Mr. Joseph Volpe

1730

The Chair

Mr. Joseph Volpe

The Chair

Mr. Joseph Volpe

The Chair

CANADA

Standing Committee on Industry, Science and Technology

NUMBER 005

2nd SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, November 27, 2002

[Recorded by Electronic Apparatus]

¹ (1530)

[English]

The Chair (Mr. Walt Lastewka (St. Catharines, Lib.)): I call this meeting to order.

The order of the day is Bill C-15, An Act to amend the Lobbyists Registration Act.

We have people from the Department of Industry today: Howard Wilson, who is the ethics counsellor, and Pierre Legault, senior general counsel, legal services.

I would ask for the opening remarks first, and then we will go to questions.

Mr. Wilson.

Mr. Howard Wilson (Ethics Counsellor, Department of Industry) Thank you, Mr. Chairman.

I know you will have many questions about Bill C-15, which is proposing amendments to the Lobbyists Registration Act, so I will keep my opening remarks brief today. To meet your expectations, I will focus on the key details of the bill.

[Translation]

First of all, allow me to introduce to you Pierre Legault, Senior General Counsel, Industry Canada Legal Services, Department of Justice.

[English]

On the basis of the committee's recommendations of 1995-96, the Lobbyists Registration Act was significantly improved. This is an act that works well. This was the conclusion of this committee during its review of the LRA in 2001. As the chair said in her foreword:

The general consensus is the act has succeeded in this—it provides precisely the kind of transparency for which it was created: lobbyists do, in fact, register. Today, by examining the registry, we can find out who is lobbying what department and what exactly they are discussing.

The amendments before you largely reflect the committee's recommendations of 2001. While the government is proposing many different amendments, in general most relate to three major changes. First, the bill proposes a clearer definition of lobbying and who must register; second, the bill would establish a simplified registration system; third, the bill would introduce stronger enforcement provisions into the act. Let me cover each, one at a time.

As I said, the first issue is about clarifying what kind of lobbying the law covers and who has to register as a lobbyist under this act. The current law deals with lobbyists who attempt to influence public office holders in the government as part of their paid employment. So these are not people working as volunteers or as interested citizens. I believe, in looking at the transcripts from your meeting of last week, there was some suggestion made that people who were not paid but who devoted a significant part should be registered. As I said, the law is that you have to be paid.

[Translation]

The current law identifies three types of lobbyists.

The first type is a consultant lobbyist, that is someone who has contracts to lobby on behalf of a client.

The second type is what the law refers to as in-house lobbyists (corporate). These are employees of a business who lobby for their employer as a significant part of their duties. For example, a government relations official in a company or an association would qualify as a lobbyist.

The third type of lobbyist is what the law refers to as in-house lobbyists (organization). These are employees of not-for-profit organizations in which one or more employees engage in lobbying activities.

All three types of people need to register as lobbyists under the act, that is if they are lobbying. However, the key question is this: what defines “lobbying”?

[English]

I used the term “an attempt to influence a public officer holder” a few moments ago, because that is what the act currently defines as lobbying. There are concerns that this definition is too vague to be enforced well. One could ask at what point some kind of communication becomes an attempt to influence.

In fact, Mr. Chairman, this committee considered the same issue during its examination of the act in 2001. At that time the committee recommended that the Registrar of Lobbyists, the Office of the Ethics Counsellor, and the Department of Justice consult on this issue, which is what we did. The result was to clarify that lobbying involves communication with a public office holder about legislation, regulations, policies, programs, grants, contributions, and contracts. The idea is to remove the grey area of whether something does or does not involve an attempt to influence a decision. If you communicate with a public office holder on a registrable activity, you would be lobbying for the purposes of this bill—that is, with some clear exceptions. If a contact is just about basic facts or information, then Bill C-15 would not require a registration.

¹ (1535)

This bill also responds to another recommendation this committee made when it reviewed the current act. At that time, the committee felt the current exemption that applies when a public office holder initiates the contact should be eliminated. This bill incorporates that change. The act of communication on the specific matters I listed would make it lobbying. It would lead to a requirement to register as a lobbyist. Our view is that these changes would clarify what would count as lobbying under the law and for the purposes of registration.

Two of your witnesses last week expressed concern about the proposed new paragraph 4(2)(c). They were concerned that this would enable many lobbyists to avoid the need to register. We do not agree. The new paragraph would not require registration “if the communication is restricted to a request for information”. We think this is very clear and very limited.

There was a concern that by eliminating the words “in an attempt to influence” we would inadvertently capture a lot of innocent activity. We have been able to verify that we have a high compliance rate, and with the changes proposed we will be able to effectively enforce the act. If we subsequently discover we have a problem with paragraph 4(2)(c), the registrar will be able to use the authority of the existing act to issue an interpretation bulletin to ensure that this provision is not abused.

[Translation]

The second major issue that the bill covers is the proposal to create a single registration system that would apply equally to corporations and to non-profit organizations. This would be complemented by simpler and stronger requirements to govern registration and de-registration.

Under the current Lobbyists Registration Act, there are two different registration processes for corporations and non-profit organizations.

Let me start with the current rules for corporations. If one of their employees spends 20 per cent or more of his or her time lobbying, that person has to register. Our experience is that largely government relations staff and the occasional senior official have to register. Even though many people may deal with the government, very few do it for the equivalent of an entire day each work week.

There is a different process for non-profit organizations. For them, the registration requirements are based on the total amount of time that all staff spend on lobbying. If all time spent on lobbying by everyone adds up to 20 per cent of more of the time of a single employee, then the senior officer of the group has to register on behalf of his or her organization.

[English]

This difference was looked at closely. The decision, which forms part of Bill C-15, follows the model in place now for non-profit groups. If the amount of time that employees of a corporation lobby public office holders adds up to 20% or more of the working time of a single employee in that organization, then the corporation will have to register.

As part of this, it would be the responsibility of the chief executive officer or an equivalent person to register. Beyond that, the people who actually do the lobbying would also be listed, but the legal responsibility for lobbying activities would rest at the top.

Another change I should mention is that Bill C-15 would require all lobbyists, including consultant lobbyists, to update or renew their filings at least every six months. This amendment implements a recommendation of the committee. This will ensure that the public registry is accurate and up to date.

Before I go on, I should point out that this registration process is not cumbersome. In fact, 98% of it takes place online now. It is not difficult for lobbyists to comply. This automated system is something we are quite proud of, especially since it makes it very easy for anyone to visit our website to see who has registered and what lobbying is taking place.

¹ (1540)

[Translation]

The final point which I wish to bring to your attention is a new provision covering situations that may point to possible law-breaking. Bill C-15 would explicitly require the Ethics Counsellor to contact the appropriate police authorities where, during the conduct of an investigation of an alleged breach to the Lobbyists' Code of Conduct, he has reasonable grounds to believe that a criminal offence has been committed.

[English]

These are the three major changes at the centre of Bill C-15. Of course, there are other clauses in this bill. The Lobbyists Registration Act is like most legislation. Over time we have discovered minor wording problems that don't affect the substance of the law but should be cleaned up. We have discovered minor inconsistencies between the wording in the English and French language versions of the law. However, none of these represent substantive changes.

With that, I thank you for your attention and await, Mr. Chairman, the questions of the committee.

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

I'll now turn over to Mr. Epp.

Mr. Epp, welcome to the industry committee.

Mr. Ken Epp (Elk Island, Canadian Alliance): Thank you very much. I'm substituting here today, but with a great deal of interest, since Mr. Wilson and I have crossed paths on numerous occasions in the last five or eight years. I'd like to welcome you to the committee as well.

I'd like to ask you first of all about the registration of lobbyists. This new definition applies if they spend more than 20% of their time. But what happens if somebody spends 95% of their time preparing a presentation, then shows up to make this presentation to a deputy minister or the minister himself or herself and wins a contract that's worth millions of dollars, and part of it is because of the fact that he or she gave a very powerful and persuasive presentation to the official involved? Is that not lobbying? To me it seems it is.

Mr. Howard Wilson: If we're talking about consultant lobbyists, the 20% has no application. In other words, a simple telephone call at which you advance the interest of your client in securing that contract would be sufficient to require registration. Organizing a meeting for your client would trigger the requirement to register. So that takes care of the consultant lobbyist.

The 20% comes from the language in the act that talks in terms of a significant part of your duties being to be engaged in lobbying. The registrar in past years had determined that was 20% of your time engaged in lobbying activities. What this committee did in 1995-96 was to approach this issue for associations in a rather unique way.

They said if you took all of the people in an association—the Canadian Chamber of Commerce, a trade union—and were to add up all the lobbying activities of those people in the association, and it added up to 20% of one person's time, then the senior officer had an obligation to make the filing and list those people in the association who were engaged in lobbying as some part of their activity. We found this worked very well.

The committee, however, at the same time left a different process in place for corporations. What it said was that for a corporation to register, it had to be 20% of an individual's time. And if it reached 20% or more, that individual would then have to file as a corporate lobbyist. We experienced difficulties. We had a number of corporations that did not chose to approach this on a strict basis; in other words, they said that in the spirit of transparency they would register or have a number of their people register.

We also had some other companies that we felt were rather prominent in this town who claimed they would have 16% of one person, or 17%, but nobody quite reaching 20%. With our experience with associations, we thought an approach similar to that for associations, applied to corporations, would in fact increase the quality of the information corporations would file, and it would be signed off by their chief executive officer. In other words, it would carry the full authority of the senior person.

So we believe the 20% with this change, if the committee agrees, will remove any possible game playing that may have gone on in the past about the 20%.

¹ (1545)

Mr. Ken Epp: Is it possible that some organizations who show up and would say...? I guess I'm asking about the reason why you took out the phrase “attempting to influence”. Did you have some trouble with some individuals coming here and saying, “We just visited and didn't attempt to influence at all; we're just exchanging information”? You took that out, which in my view would make it even weaker then, because now it's something they can no longer hide behind.

Mr. Howard Wilson: We never actually got that kind of argument, because we never found ourselves in a court of law. What we did, however, find from a matter we had referred to the RCMP regarding the activities of an individual was that Department of Justice prosecutors in the city of Montreal came to the conclusion the words “in an attempt to influence” created a very strong legal hurdle if you were going to secure a conviction.

We had thought the important point for a lobbyist was that you were being paid and you communicated with respect to one of the items cited in the act. What we were being told was that “in an attempt to influence” was the most important hurdle, and that the burden of proof—because you had to get inside a man's head or a woman's head—was very difficult. And so the advice we in effect received was that we could probably not proceed successfully in any court to prove that someone should have registered and had not.

By removing these words, we put the emphasis back on communication. We believe this will make enforcement certain.

Mr. Ken Epp: I have one more question, and it's a very tough one.

As a member of Parliament in opposition, I may be asked often by people in my riding or elsewhere across Canada to try to influence the outcome in a particular area. Maybe it's a vote on some social issue; sometimes it even has to do with getting a contract, or something like that. They'll say, “Why didn't I get this contract with DND? I obviously met the criteria.” I'm asked to sometimes attempt to intervene in cases like that.

We have had some very high-profile cases in the last couple of years where MPs have tried to influence government departments or crown corporations. Do members of Parliament at all come into this deal? Is there any time when we should be registering as a lobbyist because we're representing someone and trying to promote a cause and trying to influence an outcome?

Mr. Howard Wilson: No, I think one of the most important roles played by a member of Parliament is to represent the interest of their constituents. That is often pushing the interest of the constituents directly with a government department, getting explanations as to why a contract wasn't awarded, and so on. We have had to put some limitations on ministers in terms of their dealings on behalf of constituents with both quasi-judicial tribunals and with crown corporations more recently, but these are exceptions because they happen to be ministers.

So no, under no circumstance—I think if in fact you were being paid and you made representations, you probably—

Mr. Pierre Legault (Senior General Counsel, Legal Services, Department of Industry): You would be in conflict of interest—

Mr. Howard Wilson: And probably in conflict with the Criminal Code as well.

The Chair: Thank you, Mr. Epp.

Mr. Volpe.

Mr. Joseph Volpe (Eglinton—Lawrence, Lib.): I wonder if I could go back to that example. If a member of Parliament is advancing the interests of a particular corporation and being paid for it, presumably that would not be in the normal course of the member's duties as a parliamentarian.

I can think of an example. If there's a corporation outside your riding, it could be argued that you're advancing the interests not of a constituent but of a particular interest. And if there were a remuneration of sorts, I would imagine if it fell outside normal parliamentary business--I don't know, in your capacity as an accountant or as a lawyer are the examples that come to mind--why wouldn't you be asked to register as a lobbyist?

¹ (1550)

Mr. Howard Wilson: Such a member actually would have committed a criminal act. You may remember the situation with Senator Cogger of a few years ago. His case of influence-peddling—the Crown's case—was thrown out at the trial division in Quebec and at the appeal level on the grounds that the Crown had not established criminal intent. It then went to the Supreme Court, and the Supreme Court unanimously said that criminal intent has actually nothing to do with the infraction. The senator at the time claimed that all he was doing was acting as a lawyer representing the interests of a client in the interest that the client wanted a grant from a government department; that he had been working on this before he became a senator and continued afterwards.

What the Supreme Court said—and the reason I know this is that I have to write to part-time governor in council appointees about possible dangers for themselves—was this. If you are an official--and a senator is an official, as is an MP--and you are engaged in a matter of business with the Government of Canada, then that is a criminal offence. It does not require criminal intent; all you have to do is know that you're an official and that you are dealing with this government department in order to secure something for your client.

If you found yourself in that condition, I suppose you would have to register, but in the process of registration you would be self-admitting that you had just committed a criminal act.

Mr. Joseph Volpe: That it's a redundant exercise is essentially what it means.

Mr. Pierre Legault: If I may add to the answer Mr. Wilson provided, the act says that if a public office holder has been lobbied, then the lobbyist has to register. So in theory, you would be registering yourself in part to lobby some of your colleagues—and possibly yourself, in a sense, if it's in your own riding—so it could lead to some inconsistencies.

Mr. Joseph Volpe: I suppose we're in a world of speculation here and fantasizing in order to understand the legislation better, but most of the members around this table are probably not in a position to effect a decision. I say this with the greatest of respect to all members on both sides. So if they're not in a position to effect a decision, they would be in essence lobbying; they would not be making a decision.

Anybody who is spending time with a member of Parliament to attempt to affect a decision or cause a change in a decision, is probably doing so in the hope of creating a critical mass, but not because the people around this table are going to change a decision that will bring benefit to the person who's making the submission.

I'm wondering whether it is the intent here, in your perspective on the legislation, to capture the “office holder” as I understand the office holder to be, which may include a member of Parliament but in effect is probably directed more at the person who makes the decision. In most instances that would be a member of the department, and it might include cabinet ministers. Am I wrong in that?

Mr. Howard Wilson: Certainly where a person lobbies a member of Parliament, and let's say it's only a member of Parliament, that's a lobbying activity, and it would have to be registered. I think you're being a bit modest. It may well be that you're not the decision-maker in the sense that you've been given the legal authority to issue this grant, but you may well have an important influence on whether that decision is ultimately taken by that government department. You'll probably have a very important impact on how a committee is going to start to deal with a piece of legislation, and that's going to have an important impact on a number of issues.

This matter came up, I know, during your hearings in 2001, and I think the lobbying organization you'll be seeing tomorrow said they lobby on the Hill, but obviously also with government departments and ministers. Any one of those activities would be enough to bring these individuals within the scope of the act, and they would have to register the fact.

¹ (1555)

Mr. Joseph Volpe: I really didn't want to get into a debate or a contest about the value of members of Parliament, whether one talks to them or not. I was looking more at the realities of the situation. If we're targeting decision-makers, members of Parliament may have considerable influence, no matter what side of the House they're on, but they are not the decision-makers. I would imagine that anyone who does speak to a member of Parliament would do so in the hope that there would be some effect on the outcome of the conversation.

I say that because at one point in your presentation you make note of innocent activity. I realize it might be a legal term that you use. However, for those who are not part of the legal profession, it conjures up images that any other type of activity is by nature, therefore, not innocent. I don't know whether the appropriate terminology in English is “nefarious”, but it's the word that does come to mind.

In my own mind, I thought every activity that involved a Canadian citizen approaching a member of Parliament or an office holder was legitimate.

Mr. Howard Wilson: Perhaps my choosing the word “innocent” in this context may have had an unintended impression.

What I was responding to was the testimony that had been made by Mr. Conacher and Mr. Chenier to the committee last week. They felt the proposal in paragraph 4(2)(c), where it would not be a registering activity to merely call and ask for a piece of information, would open up a problem and a number of people would use this as a means to avoid registration. We do not believe there is that danger.

We were concerned that if you take out the words “in an attempt to influence”, then someone calling up and asking for factual information, and not trying to influence a decision in any way, would be caught and would have to register what was not until now a lobbying activity.

As we had discussed this, we thought, by making the exemption for that activity, we would not unduly burden people who were calling for information by putting a legal requirement upon them to register. This was to try to strike the right balance. We think we've struck one. There was a lot of internal debate as we went through the drafting process.

Mr. Joseph Volpe: I have a last question, Mr. Wilson.

Again, in my own mind, there is an implied obligation on the part of the office holder, including members of Parliament, to also register the amount of time and, in fact, frequency of interaction with people who are attempting to affect a particular decision. Is that the intent of the legislation?

Mr. Howard Wilson: No.

Mr. Joseph Volpe: No, it's not.

Thank you.

The Chair: Thank you, Mr. Volpe.

Madam Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): Thank you for being here. I've wanted to meet you for some time now.

Firstly, if Bill C-15 were adopted in its current form, how would this simplify your job as Ethics Counsellor?

Secondly, this bill distinguishes among several types of lobbyists. I'm more than a little puzzled. Today, it's difficult to define different types of lobbyists. The legislation is lax on this point because it does not apply to a broad enough range of individuals. It does not apply to certain persons engaged in lobbying activities. As you know, the way in which people lobby has changed. With all of the means available to us, it's not simply a matter any more of going to see someone to lobby. There are other ways of engaging in lobbying. As I see it, the bill throws the door wide open to new styles and this will become apparent in the months and years ahead. A bill's impact is felt for many years.

Therefore, I'm curious as to your vision for the short and medium term and as to how lobbying can be changed. I'd also like to know whether, in your opinion, the bill makes provision for too many types of lobbyists. Should the proposed legislation also spell out new approaches to lobbying as part of a vision for the long term?

º (1600)

[English]

Mr. Howard Wilson: With regard to myself, I think it's known that proposals are now before the Standing Committee on Procedure and House Affairs that look at the creation of the post of ethics commissioner, which will deal with a code of conduct for parliamentarians and also take on the responsibilities I currently have for the Prime Minister's conflict of interest code. I will be appearing before that committee next week. I think it's also well known that I have indicated to the Prime Minister that I am perfectly happy to sit in my current job until such time as the new position is created, at which time I'll go on to do something else, unknown at this point.

There is an issue here that would involve a consequential change in the Lobbyists Registration Act, and that is that I currently have responsibility for investigations under the Lobbyists' Code of Conduct. The bill before the procedure and House affairs committee proposes that that be transferred to the registrar. We may be making some proposals next week that it might be better to have it go to the ethics commissioner once that position is created. It's a matter of the rank a person should have to in fact exercise the very considerable powers under the Lobbyists' Code of Conduct. But I think that's a matter that will be determined in recommendations coming from that committee to Parliament.

On the second part, we have three categories of lobbyists, and this is not new. The three categories were in fact created at the beginning of 1988. But obligations were placed only on the first category, which is the consultant lobbyist. The big innovation of 1995-96 was to give a reporting requirement to those people who worked in associations or corporations. I think the world of lobbying understands that there are these distinctions. In two instances you're working as an employee, and in the other you're working as a consultant. You may be a lobbyist and a lawyer or you may be an accountant, but in any event you have a client relationship.

Looking at both the middle and long term, my sense is that we have an enforcement problem as of this moment. I don't think we have a compliance problem. People have been registering. If we can cure the enforcement problem and simplify the corporation registrations, then I think we will have something that is quite robust. In five years' time when your committee looks at it again, my expectation would be that there won't be very much to change.

We put the emphasis on communication. That includes electronic communication. One day it was formal meetings, then it was letters, then we moved to faxes, and now it's e-mails. The act encompasses all of those.

º (1605)

[Translation]

Mr. Pierre Legault: If I might interject here, I would just like to add that these three categories of lobbyists are broad enough to include all professions or forms of lobbying activities.

The way in which lobbying is conducted can change over time and the bill requires lobbyists to register all activities that involve communication. Regardless of the type of lobbying, all communication activities would require registration in future.

Ms. Jocelyne Girard-Bujold: Forgive me if I'm skeptical.

[English]

The Chair: Mr. Savoy.

Mr. Andy Savoy (Tobique—Mactaquac, Lib.): Thank you very much, Mr. Chair. Welcome, Mr. Wilson.

The bill is looking at eliminating the exemption we know of in paragraph 4(2)(c). This is the exemption in a case where a public office holder actually contacts lobbyists and asks for advice. But some concern was expressed last week, when unfortunately I was unable to be here, regarding a new loophole that may be opened up under paragraph 4(2)(c) in terms of what constitutes information gathering in a lobbying act and how we qualify information gathering. As I understand it, there are some concerns at the department level that this could require registration every time an information-gathering act occurs, and may result in a bottleneck.

Could you expand on both sides of this argument and your position on it?

Mr. Howard Wilson: The first is to eliminate the exemption, which is that if you receive a written request from a public office holder then you don't have to register. That was well discussed in the committee, which came to the conclusion that this was a loophole that should be eliminated. The government agreed.

When this was first proposed by the committee back in 1995-96, a concern had been expressed to the committee that the only time some associations ever lobby is when they're asked for their position by a government employee. We had doubts this was indeed the case. But they were concerned about administrative burden. We did not have a track record in the administration of this act through the Internet. We now do. It's electronically done and it's remarkably easy; it takes a very, very small amount of time for anybody—an association or an individual—to make a filing. We're now satisfied that we are not imposing an administrative burden. We do agree with the committee's conclusion that this seems to be a loophole and that its elimination is a positive contribution. It is not going to create an unnecessary burden.

The new paragraph 4(2)(c) was described last week—a bit to our surprise—by two witnesses as meaning that people would not have to lobby. In other words, they would use this as a mechanism for actually carrying out a lobbying activity, but would claim they were only asking for information. We think the meaning in the bill is very clear: “communication is restricted to a request for information”. I think our concern was that every piece—every telephone call that concerned itself just with just information, truly described—could create a burden on departments.

But I don't think it's a departmental problem; I think it becomes a lobbyist problem. Somebody who is not engaged in lobbying would find themselves within the scope of the act only by asking for a piece of information, while not trying to influence a decision in any way.

As to the concern expressed by your two witnesses last week, we think that the bill's provision for the registrar to put an interpretation bulletin out is an excellent mechanism for dealing with a problem—if we turn out to have a problem. But we think the amendment we're proposing is very restrictive.

º (1610)

Mr. Andy Savoy: As you've noted, the modes of communication have increased in recent decades—or in recent years, in fact. I understand and fully agree that in a written request for information there's very little opportunity to perform lobbying. But in terms of a conversation with a member, in a case where they may be calling to request information, it's very easy to have a conversation that may be varied in topics and focus, even with the ultimate goal of gathering information. I would think the policing of this would be quite difficult. If you looked at information gathering via electronic or hard-copy means, I would see this as making a lot of sense. In terms of a conversation, I guess it would be a little greyer, at least in my mind. But I'll leave it at that.

On to something else very quickly. When you talk about 20% of employees' time—those in the three categories of consultant lobbyist, in-house corporate lobbyist, and in-house organization lobbyist—and the necessity of registering, is this 20% of actual face-to-face time or lobbying efforts, versus logistical and administrative support for lobbying? How do you qualify this?

Mr. Howard Wilson: It does not include preparation time.

Mr. Andy Savoy: It's strictly based on output.

Thank you very much, Mr. Chair.

The Chair: Mr. Masse.

Mr. Brian Masse (Windsor West, NDP): Thank you, Mr. Chair.

With regard to the discussion earlier about ministers going outside their area and being paid and that it's a criminal offence to lobby for a contract for somebody, does it change with regard to whether or not there has been a contribution to their riding association or a campaign, or they're likely to make a contribution in terms of expectation of that work?

Mr. Howard Wilson: Let me back up a minute. What I had said was that making representations on behalf of a constituent happens to be one of the more important roles that is played by any member of Parliament and there should not be any restrictions on that.

We have had to place restrictions on ministers because of their particular decision-making authority with respect to quasi-judicial tribunals. This was put in place in the mid-1990s because there could be perceived to be an apprehension of bias if you make representations to the CRTC, or the Immigration Refugee Board, and you're a minister. Cabinet very expressly decided that this restriction would not apply to a parliamentary secretary; that although the parliamentary secretary does have greater authority internally in a particular department, nonetheless the importance of representing a constituent overbalanced that.

We've extended that to crown corporations, again, only for ministers. I'm not sure where the connection is with financial--

Mr. Brian Masse: If somebody is seeking a contract and the minister goes outside their area, Mr. Volpe was talking about their getting paid for it, maybe a professional fee or whatever, and that would be deemed inappropriate. But is there any correlation if the minister had received a campaign contribution or a riding association contribution, or is likely to do so in the future? Does this apply in that scenario?

Mr. Howard Wilson: I've taking the position that election financing is an essential part of the political process and the general approach that's been taken in this country is one of disclosure. I know the Prime Minister last night did say that a new piece of legislation that will go further than has ever happened dealing with leadership races and also with riding association fundraising during non-election periods will be tabled in the House this coming week. But the general proposal I have stated is that through receipts and through disclosure.... Unless you come to the view that fundraising campaigns are not to be carried out, they are a very important part of the political process. There are limitations we have now placed on ministers who are running for the leadership of the Liberal Party, and the reason for that is that the fundraising they are engaged in is not for the Liberal Party, not for their riding association; it's for their personal benefit.

That means if they become aware of who has made a contribution, then they will have to be certain they do not become engaged in decisions as ministers that would directly affect the interests of those companies, which is why the fundraising by ministers is largely going to be done into blind trusts and then disclosed at the end.

º (1615)

Mr. Brian Masse: Looking at it, though, from the point of view of the taxpayer, we're compensated for being parliamentarians. If you're going to run again, yes, you do have to raise funds to be able to do so, but what would be the difference if you're given a few thousand dollars to do that as opposed to doing it after having received some kind of compensation, or some type of contribution, and you might likely receive a greater one when it's, once again, outside of your duties and responsibilities? I don't see much of a difference there, but how do you see that?

Mr. Howard Wilson: It's not really part of my particular responsibilities. Parliament's going to have a chance to go off and debate the government's ideas when they table this legislation next week and that may be a question to be posed in that committee.

But I have said that if there's disclosure, which is largely the principle upon which election financing takes place, and Elections Canada publishes all these lists, that meets the public interest and therein lies the balance. You need the funds to run the political system, but you do have disclosure; at least there are not secrets about it.

Mr. Brian Masse: There was an interesting comment on the mandate of the changes, that the onus was on the lobbyist, but members of Parliament should uphold the public trust in some respects.

Is there a part where we could register when we've received a significant amount of lobbying? Should there not be a point where we could kick in and say we had received a significant amount of lobbying for or against something, or whatever, and just be able to identify that? Is there a role for us to be participants in registering, so maybe we could indicate at the end of the day whether or not there had been situations where people were not registered properly? Would that not be a benefit to public interest?

Mr. Howard Wilson: It's not the first time this has been has been looked at. It was looked at in 1995-96 and in 2001. Propositions were made by some that lists should be kept by public office holders and that these should be made public.

We were concerned that this might have the inadvertent consequence of introducing a freeze into what should be ongoing legitimate activities between people making propositions to the Government of Canada. The committee agreed there should not be a registry. But we do have a registry that says who is lobbying which departments on what issues. That's instantly available on the Internet. So beyond the expectations of the committee in 1995-96, we were able to have that within a year--just a side-bar on the speed with which the Internet became an effective working reality. So there is that information.

Mr. Brian Masse: Thank you, Mr. Chair.

The Chair: Mr. Bryden.

º (1620)

Mr. John Bryden (Ancaster—Dundas—Flamborough—Aldershot, Lib.): I was a member of the committee that proposed this in 1995-96. I'm very appreciative that the issue has been raised again, because I've had quite a bit of experience with the Lobbyists Registration Act since then.

I was researching those who had been lobbying government in order to make certain substantial changes that actually appeared in the animal cruelty bill. One of the difficulties I found was that I could identify the lobbyists and the departments they lobbied, but I could not identify the bureaucrats who were lobbied. I would have thought, with the advances we've had in Internet technology in the last seven years, it would have been very easy for bureaucrats--I'm more interested in bureaucrats than I am in politicians in this context--to take note when they knew it was a lobbyist calling or they were being lobbied, and put that on some kind of list that would be accessible not just to MPs, who would love to have the information because it's part of the process of decision-making, but to the public at large.

Do you think this is something we could revisit?

Mr. Howard Wilson: I expressed, but I wasn't alone in expressing to the committee, my concern that one of the things we have been trying as a government over the course of the past 15 or 20 years is to make government as open as possible to Canadian citizens or their representatives, so that there can be a good interchange between bureaucrats and the public. This is not always a natural instinct on the part of some of my fellow public servants. We were concerned that we could inadvertently introduce a freeze; that people would not wish to see their names on certain lists; that they would be inclined not to agree to meet with people they should be, in the ordinary course of their activities, meeting.

The committee looked at it and said, let's only have the senior people. Then somebody else on the committee pointed out that actually a lot of the most effective and most important lobbying takes place at a lower, more working level. So the committee, I think, did come to the right balance: we do need to know who is lobbying for what purposes, and that information has to be readily and quickly available.

I continue to think that one of the better public records was when the question of Onex and Canadian Airlines and Air Canada became a matter of great public interest. At that point in time, those engaged on it—whether Onex or Canadian or Air Canada—were hiring practically every consultant lobbyist who was capable of walking, or at least talking, in this town.

We received exactly two telephone calls from the media during this period of time—there were reports every day as to who had been hired—and the two calls we got were technical calls. They weren't actually asking us.... It was for basic information; they wanted to make sure the people concerned were dealing with this. Now, I have felt this more than achieved the expectations and demands of the committee of 1995-96 and made a net contribution to the transparency of public debate in this town. It was instantly available.

Mr. John Bryden: Well, Mr. Wilson, the problem isn't the senior bureaucrats; the problem is the middle-level bureaucrats. We know that lobbyists come here not to lobby us politicians, who have questionable influence on events. I know we could agree or disagree on that. The reality is it's those invisible people who are making policy who I think are of great concern to us.

Let me suggest something here and get your response. Now we have the capability, with the Internet and the data banks the lobbyist registration people have gathered, to know who is a lobbying organization very quickly. Could we not require that middle-level bureaucrats keep a list of those people who have contacted them who are lobbyists on the lobbyist registration list? I'm not talking about everyone—I'm not talking about the bureaucrats going to them; I'm talking about a deliberate contact—surely this is something that should be listed in some way so that we get some sense of what these lobbyists are actually doing in the middle level, not the senior level, with the politicians. Is that not a practical thing to do, or not something we could fairly expect of middle-level bureaucrats?

º (1625)

Mr. Howard Wilson: We have tried, and Parliament has, to strike a balance as to where you draw the line. Right now, there's absolutely no question that we have the capability to get massive amounts of information. We could claim that the administrative burden that's going to be placed on anyone is going to be minimized because it's all going to be done electronically. I worry, however, that if we were to require that every public servant now has to keep a list of that individual information every time they are contacted—a log—we're going to find it increasingly difficult for people to in fact have the conversations they should be having with these public servants. I do not believe this would have the desired outcome.

What I would say, however, is that if you were to look at any of the registrations, if you were to take a look at some company such as Bombardier, or any of the lobbyists Bombardier may have hired, or who may have been hired by one of the banks—and they'll tell you which issues they're interested in; they'll tell you which departments—I think it's a pretty straightforward guess that they will be operating at all levels.

Mr. John Bryden: It would interest you to know, Mr. Wilson, that just last week I had a call at home from the Animal Alliance of Canada. It was soliciting funds in order to further their fight with the animal cruelty bill, which is before the Senate. Interestingly enough, in my conversation with the telemarketer the Animal Alliance claimed credit for not only having influenced the government in the creation of the bill, but for actually having helped write the bill. This created a very important doubt in one's mind, particularly as I had done access to information requests on the same theme. There appeared to be untoward influence at the middle level of bureaucracy on that particular piece of legislation.

I'll leave that for now, if I may, Mr. Chairman. Do I have time for one other line of questioning?

The Chair: Yes.

Mr. John Bryden: Tell me a little bit about the 20% threshold. Does 20% represent an organization that has as its principal purpose lobbying, or is there some other threshold that would identify an organization as such?

Mr. Howard Wilson: The 20% is applied to an individual, not to the organization as such. So it's not 20% of the organization's time, but rather 20% of an individual's time spent on lobbying activities.

This was a means by which the act.... With regard to corporate lobbyists, the act says “Where a person employs an individual a significant part of whose duties as an employee is to communicate with public office holders”. The question that then came up was: what's a significant part? The registrar at the time said that would represent 20% of their time. We are not changing that wording, but in the proposed changes the application of it is that the CEO of a corporation will now have to register on behalf of the corporation if the sum total of lobbying by all employees adds up to 20% of one person.

º (1630)

Mr. John Bryden: Then the corporation is a lobbyist.

Mr. Howard Wilson: It's a senior officer who is registered, and they list a number of people. So there will be a listing of people.

Mr. John Bryden: Thank you.

Thank you, Mr. Chair.

The Chair: Mr. Epp.

Mr. Ken Epp: Thank you very much.

I have a technical question for Mr. Legault. I think he feels ignored because no one has been asking him anything.

Mr. Pierre Legault: It's a pleasure to listen to Mr. Wilson.

Some hon. members: Oh, oh!

Mr. Ken Epp: This is the technical question. If the new bill with regard to the code of ethics is enacted, we will no longer have an ethics counsellor; we will then have an ethics commissioner. I think it is proposed that the role of the ethics commissioner will not include looking after lobbyists, yet this bill throughout refers to the ethics counsellor. Should we as a committee amend that before we report it back to the House so that it's technically correct?

Mr. Pierre Legault: The draft project for the ethics commissioner does include some proposed amendments to this bill that would take care of the issue you're describing.

Mr. Ken Epp: So it's assumed then that--

Mr. Pierre Legault: The other committee will be looking at those issues.

Mr. Ken Epp: In other words, if passed, this bill would immediately be amended by the other one if it were passed subsequently.

Mr. Pierre Legault: That's right.

Mr. Ken Epp: That's fine.

I just wanted to give you a little action. Otherwise, people will wonder why the taxpayers should pay your salary. They wonder that enough about us.

The Chair: Easy now.

Some hon. members: Oh, oh!

Mr. Ken Epp: My next subject is for Mr. Wilson. Is there an advantage in having the ethics counsellor, who looks after matters of ethics with regard to government, involved in managing the Lobbyists Registration Act? Is there an advantage to having that all contained in one department, or would there be advantages to having it separated?

Mr. Howard Wilson: We've actually found that it has been advantageous for several reasons. One is that because of the way the lobbying has been automated, we have only two employees in my organization who are concerned with lobbying. If it were a stand-alone office there would have to be additional people to look after clerical requirements and accounting and so on, but the office as a whole can absorb all of that.

The other advantage is with respect to the Lobbyists' Code of Conduct. My principal responsibilities are for the Conflict of Interest and Post-EmploymentCode for Public Office Holders, which covers off ministers and other senior members of the executive branch--the very people whom the lobbyists will be directing a lot of their activity to. But when you start to look at some issues that involve both the conflict of interest side and the lobbyist side under the code of conduct, I have found it very advantageous to be able to look at both sides and to have that expertise available to me.

A case in point was an accusation that had been made by Duff Conacher of Democracy Watch, that any lobbyist who was lobbying a minister's department and at the same time was working on the minister's leadership campaign infringed a provision of the Lobbyists' Code of Conduct that deals with the question of improper influence. He in fact raised that matter with me. As I started to examine the question, I became convinced it was less an obligation on the lobbyist than it was on the minister, and that the minister was going to have to take the appropriate steps. If he was going to have that person on his campaign, then he was going to have to take responsibility.

I found that looking at the two sides of the same issue and having responsibility for both was, in fact, advantageous. Next week I hope I will have something out on improper influence, dealing with the fact that it doesn't apply.

º (1635)

Mr. Ken Epp: With the proposed changes that are in the new bill concerning the proposed ethics commissioner—it doesn't have a name or a number yet—and this particular one, do you think we're losing something? It seems to me the two roles are now being separated more widely. You already have to deal separately with the actual registration of the lobbyists, which is handled by someone outside your office, and you deal, really, only with the application of the code with respect to lobbyists. Am I correct in that?

If we actually, as Parliament, now approve these bills, there will be a further separation out of the office of the ethics commissioner.

Mr. Howard Wilson: There may be, but not necessarily.

When the Prime Minister tabled his proposals in June, he was talking in terms of two positions. There was going to be a jurisconsult who would deal with the parliamentary code, and then there was to be the ethics counsellor put in place through legislation. What happened in the course of the summer was they decided to combine the two positions, but the responsibilities remain, so that this new individual, as it's currently envisaged, would have responsibility for the Prime Minister's conflict of interest code.

I see no reason why that individual should not have, and I think there is some considerable advantage in his having, ongoing responsibility for the Lobbyists' Code of Conduct. He would have the appropriate rank; he would have the staff to support him in his efforts. I'll be making that suggestion to the committee next week.

Mr. Ken Epp: My last question, then, in this round is a numerical question. Could you give the committee some idea how many times you have had to deal with conflict or a breach of the Lobbyists' Registration Code?

Mr. Howard Wilson: I have received a number of complaints and I have yet to come to a position that says I have a reasonable belief there has been a breach of one of the rules, which is the standard that has to be attained before I acquire all of these powers. I still have some underway that I have to conclude on.

I'm not surprised, by the way. The Lobbyists' Code of Conduct was developed in close consultation with a great number of people experienced in other jurisdictions. I think the rules that are set out are the rules anybody who would want to claim they operate on a professional basis would adhere to.

Mr. Ken Epp: Then, of course, that book is really relatively new, isn't it?

Mr. Howard Wilson: Yes, it's from 1997.

Mr. Ken Epp: And have you referred any cases at all to the RCMP?

Mr. Howard Wilson: I have referred one particular case to the RCMP about non-registration, and that was what led us to this problem that we've had with the text of the act.

I might say that the registrar, when she appeared before the committee in 2001, said that if we read in the newspaper that somebody is lobbying and isn't registered or if somebody telephones us, our response is not to turn those over at the first instance to the RCMP. What she does as a practice is call the people involved. They have a discussion, and it generally has one of two outcomes. One is that they both agree it's not lobbying that the individual is engaged in; or it is lobbying, in which case there's a registration. We've put the emphasis on transparency, that the public interest is served by having information on our site that this is what is happening.

Mr. Ken Epp: So are there penalties if that happens? I mean, if I drive along the road and I'm caught by an RCMP and I don't have a driver's licence, he says, oh, you'd better get a driver's licence. Then off I go to get a driver's licence. Is that the end of the matter? I don't think so. Usually you'd have to pay a fine. So is there any consequence if someone is caught doing the lobbying without having registered, or do they then just register, and that's clear?

Mr. Howard Wilson: Let me be clear. Because of the way the act is currently worded, we will never find ourselves in a court of law. No prosecutor will take up our case. But even before we knew that, we put the emphasis on getting the registration. It is different from having a licence to drive a car. What this act says is that it's transparency. You don't need a licence to lobby the Government of Canada, but if you are lobbying, then there's a public interest to have a registration saying what that is. And so as a matter of conscious decision, we have said that the public interest and Parliament's interest are best served by having the registration.

If this committee agrees and Parliament agrees to the change, then we will not have an enforcement problem. What we will do is to establish only that you're being paid and you've communicated, and on failure to register, we could then find ourselves in a court of law if you don't want to make a registration.

One of the things--indulge me for just a moment--is that in this town, in Montreal, and in Toronto, there is a high awareness of the obligations of this act. There is less so once you get off into other parts of the country where the provisions of the Lobbyists Registration Act are just not as well understood. And so we felt that if we could get a registration quickly, painlessly, that would be in the public interest.

º (1640)

Mr. Pierre Legault: But the act does include provisions on offences and punishments if somebody does not register when he or she should.

The Chair: Thank you very much.

Mr. Bagnell.

Mr. Larry Bagnell (Yukon, Lib.): Thank you. I do find that interesting. I wonder why there's an act if it can never be enforced.

I basically agree with most of the changes except I'm not convinced about the one about phoning for information. I think everyone in this room can think of someone who might phone them who would have an effect just by the fact that they make the phone call. Nothing more needs to be said related to what that organization is and their influence.

I have to agree with my colleague Mr. Bryden on middle management. Having worked in the bureaucracy, I know the senior management is not writing the laws, not meeting with the interest groups, not checking laws around the world. The senior management is managing middle managers, and they are the ones who are really dealing with the people who have an interest in a law.

My question is just a question of clarification. On page 2 of your submission, the third last paragraph says:

At that time, this committee felt the current exemption that applies when a public office holder initiates the contact should be eliminated. The bill incorporates that change. The act of communication on the specific matters that I listed, would make it lobbying.

I want to make sure I understand that. So if I were to call one of my enemies--and the rest of the country, as you said, is not aware of the act--and talk about a grant or a program or a regulation, then they would have to register even if they didn't know about it. Is that what this says, if this exemption is removed?

Mr. Howard Wilson: What the exemption was intended to do was to respond to a number of associations that said that the only time they, associations, lobby the Government of Canada is when some official writes a letter to them and says, we're thinking about doing the following and we'd like your view on the matter. They took the view that this is the only time they ever make representations, on that one singular instance.

Some of us had some doubts. I spent most of my career in the public service dealing with trade policy matters, and occasionally I would write to associations, often on the west coast, east coast, or something, and say, what do you think about the following? Yes, I would get a response back, and a week later I would get something more, and a month later I would get some more information, and so there was a concern that this would be a loophole. And I think the problem we had, as I mentioned earlier, in 1995-96 was that we could not address the committee's concerns that there was going to be an administrative burden placed on some of these smaller associations.

When the committee came to this conclusion...and this was not our idea; this was your committee's recommendation, which we agreed with. We can now say with complete satisfaction that we can do this in a way in which it will not be an administrative burden for a small association, no matter where they happen to be located.

So we eliminate a loophole, and yes, it will increase the number of the registrations. It will meet more clearly the purposes of the act but it will not create an administrative burden.

º (1645)

Mr. Larry Bagnell: I can see that, and I see your point. It's a good point. They could use the loophole to lobby, basically, referring back to the original letter a zillion times.

What I find hard to visualize enforcing is when government, as it often does, writes five hundred letters to every small business saying, do you have any input on this new tax we're proposing, or this new exemption we're proposing, and then they all don't realize that if they answer that letter they have to register for the Lobbyists Registration Act.

Mr. Howard Wilson: They may never get to the 20%.

Mr. Larry Bagnell: The 20% of one person's salary in the new set-up.

Mr. Howard Wilson: If the only thing they're doing is responding to one piece that has come from a government department, it's highly unlikely that you would ever get to that 20%.

Mr. Larry Bagnell: From what the small business tells us, they get an awful lot more than one piece from government departments. But I'll leave that.

The Chair: I'm glad you'll leave that.

Madame Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold: Mr. Wilson, for the sake of improved ethics and transparency, shouldn't Bill C-15 include a provision requiring lobbyists to disclose the amount of money spent on their lobbying activities? As we well know, there are different types of lobbying activities, as well as activities of varying intensity.Shouldn't the proposed legislation also include a provision requiring the lobbyist and the firm he or she represents to disclose any financial contributions to a political party or to an individual?

[English]

Mr. Howard Wilson: The question of expenditures has now been looked at by the committee on two occasions. It was looked at back in 1995-96 and it was looked at in 2001. The committee in 2001 asked us to take another look at it but didn't actually come out with a positive recommendation.

Our view is that there are some very serious administrative difficulties with definitional questions of what constitutes an expenditure. We've taken a look at what the United States does, and they require that there be reporting in terms of bans, and it's not particularly informative. There would be serious enforcement difficulties, and probably not all that much additional information would be well known. Larger companies will be spending larger sums of money. You probably have a pretty good idea of how much money is being spent by those who are opposed to the animal cruelty bill.

We came to the conclusion that it's not going to add very much to public knowledge.

[Translation]

Ms. Jocelyne Girard-Bujold: Do you have an answer to my second question concerning political parties, specifically, whether lobbyists should be required to disclose any contributions made to political parties or to individuals?

[English]

Mr. Howard Wilson: I think the answer to the question of political contributions is more directly achieved by ensuring that there aren't holes in the current system.

The Chief Electoral Officer has written a report in which he has complained that there should be some rules on political leadership races. He has expressed some concerns about riding associations at certain points. The details I'm not clear on, but the government did announce that it was going to be making proposals, and the Prime Minister said the legislation will be tabled next week.

One of the things I have noticed, however, is that once the thing comes into the hands of Elections Canada, journalists, and I imagine your own research people, have no difficulty at all in making the connections between the two.

[Translation]

Ms. Jocelyne Girard-Bujold: First of all, that would simplify things for many people.

Secondly, you stated earlier that any one can make such a request. Any parliamentarian can ask the ethics counsellor to investigate a minister or a particular case. However, you also said that you could halt your investigation, depending on the circumstances.

What circumstances might prompt you to cut your investigation short? As you yourself said, there are times when any parliamentarian can ask that a particular minister be investigated. You can accept the request and launch an investigation, but at some point, given certain circumstances, you can terminate the investigation as well. What circumstances would compel you to halt your investigation?

º (1650)

[English]

Mr. Howard Wilson: I think there's confusion here on two points.

The question had come up with respect to the lobbyist code, are there no penalties for a breach of that code? In other words, if I have a reasonable belief that one of the rules in the code has been breached, then I acquire all the powers of a superior judge, powers of subpoena, and there shall be an investigation, there shall be a report, and that report shall be tabled in Parliament. But the committee had decided back in 1995-96 that it was not necessary to in fact have any further penalty; in other words, it was sufficient penalty to have a report tabled in Parliament that said somebody had behaved unethically as a lobbyist.

Some concerns had been expressed at the committee about this, and the government responded by saying that if in the course of an investigation under the lobbyist code evidence comes up that it appears a criminal act is taking place, then the ethics counsellor is to immediately give that information to the police authorities and cease his own activities, because that would require a criminal investigation.

The other matter that came up in June was where the Prime Minister said that if a member of Parliament had a complaint to make about a minister or a secretary of state with respect to conflict of interest, they could file a complaint with me and I would have the authority to carry out an investigation. That is a different matter. That's not touched upon in anything that's here.

[Translation]

Ms. Jocelyne Girard-Bujold: I see. Thank you.

[English]

The Chair: Have you finished? You have some more time if you wish.

[Translation]

Ms. Jocelyne Girard-Bujold: If I had any time remaining, that would be perfect.

Mr. Wilson, it is your opinion that the act works well. I find that somewhat hard to believe given the many complaints received from members of the public about lobbying and your role and about the lack of ethics and the transparency to which people are entitled.

I read through your notes quickly because I didn't arrive in time to hear your presentation. You state that any problems identified are minor ones, that the lobbying legislation could still be changed and that while changes won't resolve all of the problems, they will help the issue evolve. Basically, that's what I understood from your notes. However, I think we're talking about two different things. What the public is telling us is that in the political realm, ethics and transparency are notably absent.

One widely held belief is that politicians are less trustworthy than car salesmen. You have an extremely important role to play in enhancing their credibility. In my opinion, the lobbyist bill does not go far enough to allow people to say that finally something positive has been done. You believe differently, however. Convince me then that you are right, while the general public and I are wrong.

º (1655)

[English]

The Chair: With a short answer.

Mr. Howard Wilson: My responsibilities cover a fairly wide range of things. We're only talking here about the lobbyists thing.

I would like to make a statement about how changed the atmosphere respecting lobbying is in Ottawa and publicly in this country. You can recall that the original reason for the Lobbyists Registration Act was because of accusations that were being made in the 1980s that certain friends of the then Prime Minister were able to arrange meetings with any minister at the drop of a hat. This was a very controversial issue. It resulted in 1989 in the first Lobbyists Registration Act. And it wasn't a very good piece of legislation. It was very hard to understand. It wasn't informative.

Before the 1993 election, there was an all-party agreement reached on very significant changes. Those changes were taken up by the industry committee. Then a special committee was set up under Paul Zed, and it made a lot of very interesting proposals. They went beyond what the government had in mind. But it was very controversial at the time. We made the changes, and stuff then became available. The transparency that became available through the Internet changed the debate, so that we had this thing take place in the year 2001 essentially out of the public eye. People were satisfied that the information was in fact available. We hardly ever get calls, as I mentioned, and yet there are articles every day about who has been hired to make representations on what issue to which government departments. You can read about it in the National Post or The Globe and Mail or La Presse. It's there.

It seems to me that public confidence has increased because of knowledge. In other words, the mystery of something happening behind closed doors has been removed. At least, put it this way, you're not having those debates in the media. They do report on what has happened. I think of that as an enormously important and positive change.

The Chair: Thank you very much.

Mr. McTeague.

Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.): Mr. Chair, thank you.

Mr. Wilson, of course, thank you.

[Translation]

Thank you for coming here today, Mr. Legault. I'll get right to it, because I know other members still have some questions for the witnesses.

[English]

I'm interested here in your opinion, Mr. Wilson, on the potential conflict that might arise in the circumstance or situation where you make a determination that someone has not run afoul of the proposed legislation here before us, and the registrar does otherwise or vice versa. Can you foresee that kind of situation, although it's a hypothetical question? The bill certainly sets it up to the possibility that you would have clearance for one, and another one would be objected to by either you or the registrar.

Mr. Howard Wilson: I'm not sure I understand.

Mr. Dan McTeague: If an individual has complied and registered under this act, and the registrar has obviously taken into account that this is in fact correct, but you, in your role, make a determination that it is in fact not correct, what happens in that kind of scenario or circumstance?

Mr. Howard Wilson: Well, there isn't that sort of contest. The responsibility for the determination of registration is done by the registrar, who reports to me. My responsibilities, apart from the overall administration of the office, are very particular with respect to the Lobbyists' Code of Conduct, which is where a lobbyist may be accused of breaching one of the rules.

For example, one of them says lobbyists shall not divulge confidential information unless they have obtained the informed consent of their client, employer, or organization, or it's required by law. That's the kind of principle that you find in legal codes, and so on. So if an allegation was made and there was some evidence that this indeed was the case, by virtue of coming to that decision, I acquire all these powers, and then there shall be an investigation, and so on.

So it's not a question of whether the person was a lobbyist. That's a given. It's a question of whether the person lived up to the standards required by the Lobbyists' Code of Conduct.

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Mr. Dan McTeague: I was anticipating, of course, what you had sort of inferred in other questions about potential legislation that's coming forward next week through our work on the procedure and House affairs committee.

My second question has been raised in the past, dealing with a differentiation between paid and unpaid. Do you have a problem with people lobbying who may not have a pecuniary interest in terms of lobbying, but lobby nevertheless? For instance, one could anticipate someone who is lobbying on behalf of the legion, someone who's lobbying as a former employee to a company for which there's really no financial interest or otherwise.

Mr. Howard Wilson: I think the distinction is absolutely essential. If you remove the condition of being paid, then there is no basis to make a distinction between a Canadian citizen just making a representation on their own behalf, and I think it would pull out of the system...it would be impossible to administer.

We have had some problems with individuals, very prominent organizations, saying, well, they're not paid. We've pressed them on the point, and they have provided evidence to us that they indeed were not paid, so we have dropped it. We've pressed on these points, but to remove the condition would potentially bring every Canadian adult into the scheme.

Mr. Dan McTeague: It is a concern that I expressed at the last meeting with some of the witnesses.

Perhaps to help the committee, as a bit of clarification, let's say I'm a retired member of a particular company, an energy company, I receive a pension from that company, and my issue is specific to a bill that affects that particular sector. Would this indeed trigger a potential or a real conflict, in your mind?

Mr. Howard Wilson: No, I don't think so. I think our experience has been that most corporations are quite happy with the obligations this bill puts forward. It's administratively simple. We have a number of occasions where actually the contrary takes place, where somebody has been hired to provide advice and it expressly states in their contract that they are not going to be engaged in lobbying, yet we find they still register.

Why do they register? It's because they're concerned that they may find themselves at a reception, start to talk about their contract with a public office holder, and fear they will be seen as having breached the act. So out of a matter of prudence, they make these registrations.

We have received good cooperation. Every now and again you will find somebody who, on a matter of principle, does not want to be engaged. A few consultant lobbyists tell us they have clients, often foreign clients, who would prefer not to be registered. You'll hear this tomorrow, I think, from the Government Relations Institute of Canada. They are in favour of strong enforcement provisions, because through that they can be certain that some people who might be inclined not to register will not take the risk.

Mr. Dan McTeague: Thank you, Mr. Chair.

The Chair: Mr. Masse, did you have any more questions?

Mr. Brian Masse: Thank you, Mr. Chair.

How much does it currently cost us to run the registration with our staff, structure, and maintenance?

Mr. Howard Wilson: We have two full-time employees. We don't charge for filing electronically. We charge $150 if you file by hard copy. That was done to try to encourage people to do it electronically. We're up to about 99%. Mr. Chair, I will get you a precise figure on that. It's not very much.

Mr. Brian Masse: Is there any point to now charging for it being done electronically? Since 99% of the filing happens that way, obviously that would be the majority of the work that's done and the reason you need the two staff members. Is that going to change?

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Mr. Howard Wilson: We don't believe so. We want to continue to have a positive encouragement to file electronically rather than sending us a fax. It changes the kinds of employees we need. If you have hard copies coming in, and a lot of offices still find that sending a fax is an easy way of doing it, then we have to independently enter that data. So I would then need a data entry clerk. I don't need that. I have an officer, Gaëtan Champagne, who's with me, and his job is to verify. That's a very different kind of responsibility. He works online with the person to make sure the registration is complete and accurate. Once he agrees and pushes a button, it then becomes a reality. I would have to add staff, and I'm not prepared to take that risk.

Mr. Brian Masse: Here's my concern as a taxpayer. It doesn't sound like a very good deal in the sense that lobbyists take up the time of staff I pay for; they have influence on public policy, and that affects my taxpayer dollars. At the same time, some of their activity can be written off, whether it be dinners or events, which costs them as well, and then at the end of the day I end up paying for the whole infrastructure to have some type of accountability for their actions. We've talked about user pay systems. Why put the burden on the ordinary taxpayer when it is actually all their funds we're talking about here? Why wouldn't we move that to the users of the system?

Mr. Howard Wilson: What I'm saying is that the way we would look at the potential costs is that I would have to end up hiring at least another employee, which I don't have to do. In terms of straight costs, that is going to cost $40,000 to $50,000, plus support staff. I think the numbers I will give you will show you that this is a very cost-effective organization. I think that anything that will keep people from sending us faxes is--

The Chair: I appreciate where you're going, Mr. Masse, but you're going into the main estimates and the costs within the lobby group, rather than the bill itself. Perhaps you could point toward the bill a little bit to help me out.

Mr. Brian Masse: That'll change another question, Mr. Chair, but that's okay.

One of the other questioners made the comment that no prosecutor will take up our case. How meaningful is the legislation here if we can't at the end of the day hold anyone accountable? You noted that in the past there was an investigation and a report to Parliament and that there would be no further penalty. I'm assuming that the taxpayers will pick up all the costs associated with that investigation. Have you given any thought to opening that up further? What are your comments in terms of accountability at the end of the day? I think that is what people are looking for, rather than public shame.

Mr. Howard Wilson: Pierre will add to this. There are no penalties other than a tabled report with respect to the lobbyists' code. There are, however, considerable penalties available to us for failure to register or to knowingly make any false or misleading statement. For failure to register the fine can go as high as $25,000, and for false or misleading statements it could be, on summary conviction, $25,000 or imprisonment for a term not exceeding six months or both, and by way of indictment a fine not exceeding $100,000 or prison for a term not exceeding two years. These are very substantial penalties.

The problem we have is that because of the question that registration is in an attempt to influence, what effectively Justice prosecutors are saying to us is that to prove this beyond a reasonable doubt requires knowledge of what is in a person's head that would be virtually impossible to secure. The RCMP had some very frank things to say to us about it as well.

By removing “in an attempt to influence”, what we're saying is that lobbying is communication with respect to any of these cited items and therefore we still have to prove things. You have to prove, in court, “beyond a reasonable doubt”. You have to demonstrate that you are being paid and that you have communicated with respect to one of these cited items. Now, that is factually very easy for the RCMP to obtain for us.

So I don't actually expect we will find ourselves often in a court of law, because if somebody is absolutely determined to say no to us, then we don't have to do very much, and with that recognition, it's obviously going to be much easier for them to register.

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Mr. Brian Masse: Thank you, Mr. Chair, and thank you, Mr. Wilson.

The Chair: Mr. Volpe.

Mr. Joseph Volpe: Thank you very much, Mr. Chair.

Mr. Wilson, I wanted to follow up, after hearing your reflections on—let me use the term in a non-disparaging manner—the “revolving door” component of some crown corporations or agencies. Let me clarify for a second, because I'd like to get your reflections on this and how it relates to the bill, both in terms of registration and in terms of eventually being captured by other legislation that we are anticipating with respect to conflicts of interest.

With some of these agencies—and I'll mention one without trying to prejudice anything; something like the CRTC, and you mentioned the IRB—which are now going to recruiting candidates with expertise in the area of competence, what has emerged is a tendency to go with someone who is actually working in the field or who has legal background with application in the field. You would have what are arguably decision-makers who have come from a company or an industry going into a position as decision-makers in a crown agency and who, upon expiration of their term, usually end up back in that same industry or that same company.

Does the bill, as it is proposed and as we're studying it, envisage any requirement on the part of those people to fall within this particular piece of legislation, or I guess potentially within the next one? Do you see any potential for a conflict?

Mr. Howard Wilson: This is not a matter really, in my view, that comes up under the Lobbyists Registration Act itself, but it is an important issue that my office spends a great deal of time on. It mostly relates to the conflict of interest and post-employment code for public office holders, which applies to essentially all full-time governor in council appointees. It affects all the commissioners of the CRTC, and it affects everybody who sits on the Immigration and Refugee Board.

I think that one of the classic public policy issues that will always be with us is the need to ensure that you have expertise on these specialized tribunals. It's very usual to find that if the government is recruiting into the IRB they will find that people who come in who have experience in immigration matters may have been working representing immigrants in appearances before the IRB, or, in the CRTC, have been involved in telecommunications matters or broadcasting matters. Each of these organizations has had to put in place internal mechanisms to ensure that conflicts over past associations do not put them in a position of bias when they are dealing with public policy issues.

This code, in the post-employment provision, says that there are then limitations on what they can do for one year after they leave office. Under no circumstance may they make any representations on behalf of a client, back to the CRTC, for example, or to the Immigration and Refugee Board, for one year.

Furthermore, they cannot take employment, a contract, or appointment of any nature with any organization with which they had direct and significant official dealings in their last year in office. That would mean, in the case of the CRTC, that you would have to go then and look through what issues commissioners dealt with in the past year. It means that they would not be able to take a contract with any of those organizations, so there is a protection of the public interest. But you do need expertise on these boards, and people, if they are going to come into government service, also don't want to be totally deprived of being able to take advantage of the knowledge they have acquired and apply that to their future profession of work.

It is always a question of balancing, but we spend an awful lot of time on that. I think the public interest is basically well protected here.

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Mr. Joseph Volpe: What I hear you say, though, is that the imbalance, should it occur, will only be dealt with in the event of a complaint lodged by a public citizen. In that event, there is really no oversight mechanism that is independent of a complaint by a public citizen, or another interested party that might feel itself aggrieved.

Mr. Howard Wilson: I'm not certain. When these people are appointed, say, to the CRTC, they are required to provide my office with a complete disclosure of all of their assets and interests and the activities they have been engaged in. That is confidential. Then, steps have to be taken whereby they can no longer have direct control over assets. The legislation on the CRTC, I know, says that they cannot have interests in telecommunications undertakings. In other words, even though we say you can't have direct control of shares on the stock exchange, except through a blind trust, the legislation goes further and says that anybody sitting on the CRTC cannot have any financial interests in a telecommunications company. For some strange reason, the legislation does not put that same limitation on having interests in broadcasting.

Parliament has tried to ensure, in setting these bodies up, that the public interest is actively protected, not by happenstance. In other words, there are positive steps that these individuals have to take, and certain things that they are prevented from doing.

Mr. Joseph Volpe: Let me thank you for the confidence that you've expressed in giving your answer, Mr. Wilson.

I'm satisfied that you feel there is adequate protection even though I still might have a doubt in my own mind. I want to thank you for your response.

The Chair: Thank you, Mr. Volpe.

Madame Bujold, do you have another question? Nothing. Okay.

Mr. Bryden, you have a question, I understand.

Mr. John Bryden: Thank you, Mr. Chairman.

In my riding there is a small defence contractor who bitterly complained to me that they felt they were in the running for a significant defence contract, but lost out because the department was contacted by another firm through a lobbyist who was a former office holder. The sad thing was that I could do nothing about it, because there was no way of knowing who this former office holder contacted, so that I could advise my defence contractor to lobby that same person.

At the very least, if I have to advance by increments, would it not be in the public interest and fair that bureaucrats who are lobbied by former office holders would have to name those former office holders and file their names with the lobbyist registration people? Would that not be a fair thing to do?

Mr. Howard Wilson: Let me tell you what currently happens, because it might be helpful. I think that there was some testimony at your meeting last week on this point about former members of National Defence leaving office and leaving their positions and immediately being hired up by a defence contractor.

I actually participate in a committee that includes the Chief of the Defence Staff and the Deputy Minister of National Defence that deals with every officer who's leaving service, colonel and above, and every civilian employee of the department, director general and above. This committee doesn't actually meet. We deal with this on paper. What they do is they apply the provisions of the Conflict of Interest Code for the Public Service. They make no exceptions; that is, you are forbidden from taking employment for one year with any company with which you had direct and significant official dealings in your last year. The second provision is that you cannot lobby any part of National Defence or the forces for one year.

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Mr. John Bryden: Mr. Wilson, that's so inadequate, and it's not just defence. These people go out and they exist for some years subsequently. It's a transparency issue that really destroys the confidence of people dealing with government when they see former office holders who are sometimes bureaucrats but who are also politicians. We know that when they form lobbyists to firms afterwards, they do it because they have contact advantages that ordinary people and ordinary lobbyists don't have.

All I would say is that I'm not denying them the right to make a living as lobbyists, but surely to heavens my poor defence contractor.... It's not just defence; it exists in many other areas. Surely at the very least we could require the people who are contacted by those people, whom they know, to acknowledge that they have been contacted and that these people are lobbyists, and to file their names. I don't understand why that can't be done.

Mr. Howard Wilson: I think you're being too quickly dismissive of the changes that have occurred and how this has been administered.

When I first became involved in this in 1994, the way it was applied in the Department of National Defence was very different. What it in effect said is that you could lobby any part of National Defence except that very part that you happened to have been involved in. In other words--and this was a common occurrence--if you happened to be down at the Washington Liaison Office, then the provision that was being applied to you as a member of that department was that you could lobby all parts of the Canadian Forces and the Department of National Defence except the Washington Liaison Office. Neither I nor the then Chief of the Defence Staff thought this was appropriate, and the rules were then changed.

If they are registered, you're going to see their names. I think the....

Mr. John Bryden: I'm sorry, Mr. Chairman. Excuse me--

The Chair: Let Mr. Wilson finish.

Mr. Howard Wilson: Well, we're coming back to the same point, that you would wish to have these names listed. I don't know that DND is such a great mystery in this area.

Mr. John Bryden: You still haven't answered my question. My question really is, what is the problem with these people, whether in Defence or elsewhere, acknowledging that they have been lobbied by a former official that they know?

The problem is the perception. I don't doubt that we've improved, but perception is everything. I can tell you that out there in my riding, the perception in this particular instance, and in other instances, is just terrible, because they think there's a buddy system operating.

I suggest to you that one year is way too short. It should be 10 years. If you're going to do it that way and have no transparency on who has been contacted, then make it 10 years.

I don't know if you still want to reply to that, because I have another little theme I'd like to go on to.

Mr. Howard Wilson: I would like to respond, briefly.

The Chair: I'm afraid we're veering away from Bill C-15.

Mr. Howard Wilson: Let me make a very quick point here. I expressed a concern, which I'll just reiterate very quickly.

I am concerned about the identification of officials, particularly middle-level officials, that it would lead to a freezing in what should be a very, very open relationship, contrary to the way that I think government has very positively developed.

But one of the things this committee might want to do, if you do have time, since this is in the industry committee, relates to a change that had been made back in 1995-96, to say we should not permit contingency fees. There was a recommendation to say contingency fees should be eliminated. Our response was that the Government of Canada does not have the authority. This resides with the provinces.

We did say we can't put those kinds of conditions on contracts, but we could put them on the contracts that the Government of Canada enters into. So Treasury Board has come up with rules that say, if you are representing somebody, a small company, in terms of a contract with the Government of Canada, you cannot be paid on a contingency basis.

I have seen and I've written a letter on this to both the Deputy Minister of Industry and to Treasury Board to say that I have information that this is having a perverse result. A number of small companies that would ordinarily expect to be able to get contracts with the Government of Canada are not prepared to go and pay a fixed fee to a lobbyist to represent them. There are lobbyists who would be prepared to work on a contingency basis for 5% or 10%, but they're forbidden to do so. This may well end up having a completely perverse and unexpected result. For your small defence contractor, that may be his salvation, to have somebody who is as skilled as this other guy.

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Mr. John Bryden: That's a constructive suggestion, although I'm sorry, I do feel the transparency...at least in this narrow instance.

But may I go on and ask a further question, Mr. Chairman?

The Chair: You're now over your time. You're the last speaker, so I'll give you another minute.

Mr. John Bryden: Oh, I see. We have a couple of minutes. That's fine.

The Chair: I'll give you another minute.

Mr. John Bryden: Thank you.

One other thing I want to ask about is that in the various definitions of what a lobbyist is, isn't there something to be said for entering a new definition of “corporate lobbyist”, an organization whose principal activity is to lobby?

The reason I would like to see that added to the act is that presently the act doesn't make that kind of distinction. One of the frustrating elements I find in the policy-making around here is that there are groups that do nothing else but attempt to influence policy-making; that is, the organizations are dedicated only to advocacy. They might be a corporate lobbyist in the sense of one of these firms here in Ottawa that does it as a for-profit endeavour, but there are many non-profit organizations that are constantly in to Health Canada, Environment Canada, or wherever else. I would love to see these organizations defined as organizations whose principal activity is lobbying, so that when somebody comes to the Lobbyists Registration Act and sees that these organizations are going in to Health Canada, we get a better idea of what's going on here.

Mr. Howard Wilson: I would have thought we would have been able to capture all of those. As of the end of the last fiscal year, we had 357 organizations registered.

Mr. John Bryden: It's not a question of capturing them; it's a question of identifying them. The log I really want to see isn't on the occasional lobbyist, but on the constant lobbyist; the organization that is there only to lobby, which may be having an undue effect on the policy-making of middle-level managers. So if it were a practical thing, I would love to see it done.

The Chair: Thank you very much.

I want to thank you, Mr. Legault, and especially Mr. Wilson, for all the time you have spent in front of the industry committee over the last number of years. We've always had good discussions. Some have been a little more heated than others, but it's always refreshing to have you come to explain the various bills to this committee. So I want to thank both of you for your presence here today.

I remind the committee that tomorrow's meeting starts at 3:15 and not 3:30, and will finish at 5 o'clock.

Mr. Volpe.

Mr. Joseph Volpe: I would like to serve notice that tomorrow I would like to raise an issue regarding our work plan. I mean to take up no more than about two minutes of your time, but I'd like to do it at the beginning of the meeting, before we bring in our witnesses.

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The Chair: Do you want it in camera?

Mr. Joseph Volpe: I'd prefer that.

The Chair: Would you prefer it maybe at the end of the meeting?

Mr. Joseph Volpe: Whichever works best for you, Mr. Chair.

The Chair: Thank you very much.

The meeting is adjourned.