HERI Committee Report

STEERING THE SYSTEM

Chapter 18
Appointments and Conflicts of Interest

This chapter deals with two issues about the overall organization of the Canadian broadcasting system: appointments to boards and conflicts of interest. It addresses concerns that the appointment of commissioners to the CRTC and of members to the Board of Directors of the CBC needs to be rethought. It also makes recommendations concerning the relationship between the CRTC and the industries that it regulates.

A. Background

To better respond to the increasingly complex process of legislating, administering, regulating, policy-making and decision rendering, Parliament has delegated some of its authority to specialized bodies. These boards, agencies, tribunals and commissions are composed of persons possessing particular expertise in a given area.

The theory behind the creation of these specialized bodies is that because of their particular expertise, they are better able to resolve the issues that arise in these specific areas. "For example, the CRTC is better able and has more time than Parliament to deal with the technical questions which arise in the course of the various applications made before that body."¹

A further reason for establishing these bodies is to allow greater independence from political control and direction than would be found in regular government departments. The rationale underlying this independence is that "certain functions of government, to be performed efficiently, must be shielded from the constant interventions of politicians."² For example:

... the view emerged in Canada ... that such industries as transportation, telecommunications, and the distribution of energy were too important to be shaped solely by market forces. These industries were often monopolies or oligopolies wherein competitive forces were weak and where the public interest would suffer in the absence of government intervention. As a result, decisions were taken ... to regulate economic activity in key industries through the device of independent regulatory agencies.⁴

In addition to delegating the authority to act, Parliament usually also gives the particular body the authority to enact subordinate legislation, regulations, and other powers to assist in the performance of its duties. Although given authority to carry out certain duties, the gift of autonomy should not be seen as a shield that protects such an agency from being accountable. Indeed, the gift of autonomy includes a responsibility to be transparent and fully accountable.

Although a hallmark of these specialized bodies is their independence from government and freedom from political interference, it must be borne in mind that they are creatures of statute and their mandate, if not their very existence, may be changed by the legislature that created them in the first place.

Boards of Directors

Usually a board of directors, the principal decision-making body of the organization whose job it is to establish policy, will govern each of these specialized commissions.

Provisions for the appointment of directors will normally be included within the enabling legislation establishing or governing the particular commission or agency. Usually these will outline broad information only, such as the number of directors, their tenure of office, duties and disqualifications. For instance, the Canadian Radio-television and Telecommunications Commission Act provides for the establishment, constitution and appointment of members of the commission in subsections 3(1) through 5(2). As can be seen, this information is not very detailed:

3. (1) There is hereby established a commission, to be known as the Canadian Radio-television and Telecommunications Commission, consisting of not more than thirteen full-time members and not more than six part-time members, to be appointed by the Governor in Council.

R.S., 1985, c. C-22, s. 3; 1991, c. 11, s. 76.

4. A full-time member shall devote the whole of his time to the performance of his duties under this Act.

1974-75-76, c. 49, s. 4.

5. (1) A person is not eligible to be appointed or to continue as a member of the Commission if the person is not a Canadian citizen ordinarily resident in Canada or if, directly or indirectly, as owner, shareholder, director, officer, partner or otherwise, the person

Similarly, the appointment, tenure, duties and accountability of directors of the Canadian Broadcasting Corporation are set out in subsection 36(2) through section 40 of the Broadcasting Act:

36. (2) There shall be a Board of Directors of the Corporation consisting of twelve directors, including the Chairperson and the President, to be appointed by the Governor in Council.

37. Every director shall, before entering on the director's duties, take and subscribe, before the Clerk of the Privy Council, an oath or solemn affirmation, which shall be filed in the office of the Clerk, in the following form:

I, ...................., do solemnly swear (or affirm) that I will faithfully, truly and impartially, to the best of my judgment, skill and ability, execute and perform the office of ..................... (Add, in the case where an oath is taken, "So help me God".)

38. (1) A person is not eligible to be appointed or to continue as a director if the person is not a Canadian citizen who is ordinarily resident in Canada or if, directly or indirectly, as owner, shareholder, director, officer, partner or otherwise, the person

39. Subject to this Part, the Board is responsible for the management of the businesses, activities and other affairs of the Corporation.

40. The Corporation is ultimately accountable, through the Minister, to Parliament for the conduct of its affairs.

The provisions for the appointment of directors to such other cultural boards and agencies as the national museums and the National Arts Centre are much the same in terms of the limited information they offer.⁴

The method of appointment of the chairperson of any given board or commission varies under the enabling legislation. For example, under the Broadcasting Act, the chairperson of the board of directors of the CBC is appointed by the Governor in Council.⁵ Similarly, the Canadian Radio-television and Telecommunications Commission Act stipulates that the chairperson of the CRTC is designated by the Governor in Council.⁶ The chairperson of the board of trustees of the national museums and national gallery is appointed by the Minister responsible, with the approval of the Governor in Council.⁷

Governor in Council and Orders in Council

Each statutory provision for the appointment of directors and chairpersons indicates that such appointments will be made either by the Governor in Council⁸ or by the appropriate Minister with the approval of the Governor in Council.⁹ The Governor in Council is the Governor General acting by and with the advice and consent of the Cabinet; that is, the federal Cabinet.

Appointments by the Governor in Council are made by an order in council. An order in council is a particular kind of subordinate legislation issued by the Governor in Council indicating that the Cabinet has taken a particular decision. An order in council appointment must be tabled in the House of Commons and the appointment may be reviewed — but not revoked — by a committee of the House. Thus, an order in council appointment of a member to the Board of Directors of the CBC or the CRTC may be examined by the House of Commons Standing Committee on Canadian Heritage.

The Privy Council Office provides further information on the terms and conditions of employment for full time Governor in Council appointees. Here the information is somewhat more detailed than that found in the enabling legislation:

II. APPOINTMENT, TENURE AND RELATED MATTERS

Appointments are made by the Governor in Council, that is by the Governor General on the advice of the Queen's Privy Council as represented by Cabinet, through an Order in Council which normally specifies the term and tenure of the appointment. The salary on appointment is either included in a schedule to the appointing Order in Council or in a schedule to a separate Order in Council for a class of positions in an organization. An individual's salary is protected as personal information, in accordance with provisions of the Privacy Act.

Appointments are for either a fixed term or an indeterminate period and their tenure is either "during good behaviour" or "during pleasure". Appointees who hold office during good behaviour may be removed by the Governor in Council for cause. Appointees who hold office during pleasure may be replaced or removed at the discretion of the Governor in Council.

When a term is specified in an Order in Council, the appointment ends at its expiration, unless there is a legislative provision to the contrary. The appointee may be reappointed to the same position, but since appointments are made at the discretion of the Governor in Council, renewal is not automatic. In some cases, statutory provisions prohibit the reappointment of an appointee to the same position.

Where no term is specified, appointees continue in office until they resign, are appointed to another position, are replaced or are removed from office. The Public Service Staff Relations Act, which normally governs employer/employee relations in the public service, does not apply to "a person appointed by the Governor in Council under an Act of Parliament to a statutory position described in that Act". As a result, appointees are not subject to collective bargaining or grievance arbitration.

When a Governor in Council appointee resigns, the letter of resignation should be sent to the agency head, the responsible minister or the Clerk of the Privy Council, as applicable.¹⁰

Can Parliament Change the Process?

Because an order in council is subordinate legislation, it can be easily superseded by a later order. Therefore, an order in council appointment may not necessarily run its entire anticipated life. Indeed, this very eventuality is specifically contemplated in some of the enabling legislation. For example, the Canadian Radio-television and Telecommunications Commission Act states that the member appointed to a position "may be removed at any time by the Governor in Council".¹¹

Moreover, under the British doctrine of parliamentary sovereignty which Canada inherited, Parliament can make or unmake any law it sees fit, provided it has the constitutional jurisdiction to do so. Therefore, assuming this jurisdictional competence, Parliament has the ability to enact, repeal or modify legislation concerning the appointment of members of boards of cultural organizations and agencies. Indeed, as the boards and commissions themselves are creatures of statutes and thus liable to change, their very structure, composition and existence could be altered by Parliament.

B. What the Committee Heard

The House of Commons Standing Committee on Canadian Heritage heard from a number of witnesses on the issue of the composition of boards of directors of cultural agencies and organizations. The starting point of the discussions was provided by Mr. Michael Wernick, Assistant Deputy Minister, Cultural Development, Department of Canadian Heritage, who had this to say about the membership of the boards of the CBC and CRTC:

It's the government in any case that chooses the board of directors of the CBC, who are there for some kind of public oversight; that chooses the CEO of the CBC and all the members of the CRTC. So ultimately these are people who the government has chosen to supervise the system.¹²

However, numerous witnesses appeared before the Committee to express concerns with this particular appointment process.

Several witnesses spoke to the need for a more open, transparent and objective method of appointing board members. For example, speaking of appointments to the CRTC, Mr. Arnold Amber, Director, Newspaper Guild of Canada, said:

I think the process whereby Governor in Council, the government, appoints somebody to be the CEO of this corporation, and people are selected for the CRTC in various ways that one doesn't quite understand — certainly there is not an open method of selection — must come to an end.

If we are talking about an industry ... that has billions of dollars, the regulatory body, the CRTC, must be selected in an open manner. I recommend that you read our brief. We go to great lengths in discussing governance, the way governance should be set up for the CRTC, and the way governance should be set up for Radio Canada. It's the least we owe the Canadian people to say that to defend your culture in this country, the regulatory body will be selected by an open method. We also owe it to them to say that in this country, for your national public broadcaster, the people who run and make policy will be selected in an open fashion as well.¹³

Similarly, Mr. Ian Morrison, spokesperson, FRIENDS of Canadian Broadcasting, said that appointments to the CBC board do not "have to be done out of the Prime Minister's Office without consultation."¹⁴ Rather:

FRIENDS recommends that the Committee consider an arm's-length appointment process for members of the CBC Board of Directors, drawn from the advice of eminent Canadians, such as, for example, Officers and Companions of the Order of Canada. We note that such an arm's-length process could guide an appointment process under the authority of the Privy Council.

With an appropriately skilled Board in place, FRIENDS recommends that the Board of Directors itself, rather than the Governor-in-Council, have the authority to hire and fire the President and CEO, akin to the powers of private sector Boards. Alternatively, the Governor-in-Council could appoint the President on the recommendation of the CBC's Board.¹⁵

Mr. Digby Peers told the Committee that he would like to see the methodology of the appointment process:

... revisited, so those people who are up for appointment or in the stream for a possible appointment to the board of directors of the Canadian Broadcasting Corporation have a new set of criteria and a new set of guidelines and can look in the mirror and say to themselves, "I would make a good director of the Canadian Broadcasting Corporation" — because we're almost always disappointed by the board of directors of the CBC.¹⁶

A possible difficulty with the present method of appointing directors is the perception that a director's allegiance may be compromised:

Because directors owe their allegiance to the government, their capacity to operate with independence is limited. It means that even those directors who are by all accounts competent for the job still arrive in the job hindered in their capacity to be perceived as carrying out their responsibilities without at least the perception of bias. That is, the very same people, appointed in another way, might make substantially better contributions.¹⁷

Several witnesses spoke of a perception of partiality on the part of the CBC and CRTC and that their boards were biased in favour of broadcasters and the broadcasting industry. For example, Mr. Arthur Simmonds, National Representative, Communications, Energy and Paperworkers Union, expressed the view that the "CRTC as it is currently constituted is an unmitigated failure, except in the eyes of a very small group of broadcast licence owners."¹⁸ He further stated that:

I don't think that we need to reinvent the wheel, but I think that we need to take a look at how the CRTC functions and whether or not it can.... I guess what we're saying is that we believe that the CRTC is just too close to the broadcasters.¹⁹

Another view suggested that board memberships are too closely aligned to the governing party of the day:

Right now, notwithstanding the comments of my colleague and friend, the process is a closed one. Certainly, members of the Liberal caucus are invited to submit their advice, and no doubt, upstairs their advice is given what would be called "due consideration". But look at the results right now. In fact, just to take a shot at another political party, one that you're recently affiliated with, 12 years ago the board of directors at CBC was entirely, at one point, people affiliated with the Progressive Conservative Party. That is not the case today. The board of directors of the CBC, from our research, is entirely affiliated with the Liberal Party of Canada. That is not in the public interest, for a number of reasons. One reason is that we want the public broadcaster to be at arm's-length from government, and if the supporters of the governing party are the only people around its board, it pushes down to management the defence of the journalists and the creative people from political interference.

I would just point out that this is not something Friends of Canadian Broadcasting has thought up and is beginning to advocate. I'd like to quote to you a recommendation from Pierre Juneau, Peter Herrndorf, and Professor Catherine Murray of the mandate review committee of 1996, where they gave a lot of good advice about reforming the appointments process. They said this about the CBC:

"Finally, we believe that Board members with a strong political background can provide some clear benefits. We want to stress, however, that the integrity of the Board and the independence of the Corporation would be enhanced if directors with known political affiliations represented the full political spectrum and not just the governing party. We note that this pattern has been followed by successive British governments and has, in our view, helped to preserve the BBC's independence and prestige."²⁰

The Canadian Media Guild and The Newspaper Guild of Canada share this view that the board of directors of the CBC has a political affiliation. In their written submissions to the Committee they assert that:

Most CBC Board members, like other Crown corporation appointees, have been drawn from the ranks of those politically connected to the government. Sometimes they arrive with appropriate expertise. All too often they do not.²¹

Yet another witness suggested that broadcasting regulatory boards would benefit from a more diverse membership:

We ask that the committee establish guidelines directing the broadcast and cable industry toward a composition of their boards of directors, senior decision-makers, and advisory boards that reflects the cultural diversity of their local community.²²

Several witnesses also provided the Committee with suggestions for change to the appointment process. Ms. Megan Williams, National Director, Canadian Conference of the Arts, suggested that the board of directors of the CBC should be able to review applications and hire their own president.²³ She stated that:

We would also like to see the Broadcast[ing] Act amended so that the CBC board of directors would be able to choose its own president. We think that the board is sometimes compromised by not being able to select its own president.

Let me be clear. The chair of the CBC board is appointed by the Prime Minister, as is the president. It's the president I'm talking about, not the chair, and it's because I believe the public broadcaster has an important status and has to be at some distance from government. The board appointments are always very high-profile people with a lot of knowledge, and if I were a member of that board, I would want to be responsible for choosing the president who suited our board.

That board is just as likely to find a suitable president as the Prime Minister's Office is, and would be less conflicted about political agendas when they did so. I think having a president who was not conflicted by political agendas would be very important for our public broadcaster. ²⁴

Another suggestion would see candidates for appointment to the board of directors for the CBC interviewed for the position by the House of Commons Standing Committee on Canadian Heritage. The Committee would then forward a list of candidates to Cabinet, which would continue to make the appointments.²⁵ Ms. Lise Lareau, President, Canadian Media Guild, appeared before the Committee to further develop this proposal:

The Act should stipulate that applicants to the board of directors of CBC would have to all be interviewed openly by you, the heritage committee, and the committee would ultimately forward a list of candidates to the cabinet. I consider this really to be a Canadian compromise on what is now in place in, say, the U.K. model, in which it's even more public than that. More importantly, the board of directors itself would have the power to select the president, something it doesn't have now.²⁶

It is worth noting that both Australia and the United Kingdom have recently revisited the method of appointing directors to the board of directors of their public broadcasting corporations. With this in mind, the next sections examine their conclusions.

C. The Appointment Process in Australia

Many of the issues raised before the House of Commons Standing Committee on Canadian Heritage mirror those raised in a 2001 review of the appointment process in Australia. In a document entitled Above Board? Methods of appointment to the ABC Board, the Senate Environment, Communications, Information Technology and the Arts Reference Committee report stated:

Certainly, based on the submissions received by the Committee, there is a strong public perception that the Board has been politicised, and to a lesser extent, that its membership is not suitably representative. The Chair considers that this perception in itself, leads to the inevitable conclusion that the Board is not representative, and therefore this undermines public confidence in the Board and its efforts to uphold its legal obligations. It further raises questions for the way the Executive appoints members to other Boards and the role the Parliament should have in overseeing these appointments. ...

The overwhelming view of the submissions received by the inquiry was that the ABC has become politicised, has lost its independence, and accordingly, has lost the confidence of the public.²⁷

The general method of appointment to the Australian Broadcasting Corporation (ABC) board as set out in the current Australian Broadcasting Corporation Act 1983 is similar to that of the CBC. The Chair, Deputy Chair and directors are appointed by the Governor General, and the Managing Director is appointed by the board.²⁸ The Act does provide for a staff-elected director; that is, one of the director's seats is reserved for a member from and elected by the ABC employee group.²⁹ With respect to the appointed directors, it was recommended that:

... the method of Board appointments be altered to embrace a system characterised by the principles of merit and transparency, in order to deal with the widespread public perception that appointments to the ABC Board are made on the basis of political affiliation rather than on merit alone.³⁰

The Australian Senate committee investigating the appointment process identified several key principles that should form the foundation of a system of appointments:

The report further stated that "[t]ransparency in particular is considered to be the most important characteristic, with the view that secrecy should be very much the exception rather than the rule."³²Moreover, the report recommended that formal selection criteria be developed by an independent agency as a first step in this new appointment process.³³

The report also had specific recommendations as to the development of a field of candidates for board positions:

By far the greatest support is for public advertisements calling for applications to Board positions. This mirrors the procedure for public service vacancies, and is also an element of the Nolan Rules [used in the United Kingdom for appointments to public bodies]. It is also the most transparent and fair: it enables anyone with an interest in serving on the Board to apply, without limiting the capacity of any group to encourage skilled people to apply as well.

The Chair endorses this view and recommends accordingly.³⁴

The study then reviewed a number of ways in which final appointments might be made, including appointment by the Minister assisted by the department appointment by an independent body, the Parliament and direct election. After assessing each of these methods, the report recommended that

It was further recommended that the board itself elect its Chair and Deputy Chair from its membership as "a concrete and visible measure of the Board's independence".³⁶ At present, the Australian Broadcasting Corporation Act 1983 provides that the Chair and Deputy Chair are appointed by the Governor General.³⁷

D. The Appointment Process in the United Kingdom

The Australian report, in turn, was built upon the foundations laid by a study done in the United Kingdom examining the process of appointing directors to public bodies, a group that includes the British Broadcasting Corporation (BBC).

The BBC is a corporation that was established and continues to operate under a succession of royal charters. The current charter, dated 1 May 1996 and continuing until 31 December 2006,³⁸ provides that the Corporation shall be overseen by a board of 12 governors appointed by the Governor in Council.³⁹ Regional representation is ensured by the requirement that national governors for each of Scotland, Wales and Northern Ireland are included among the 12 governors.⁴⁰ The Director General of the Corporation (equivalent to the President of the CBC) is appointed by the governors.⁴¹ However, this basic appointment criteria must be set against an overarching framework of appointments to public bodies in general.

Specific appointment criteria were created in 1995 in response to great difficulties in the U.K. public body appointment process. The U.K. Committee on Standards for Public Life, which was chaired by Lord Nolan, developed a model which has since come to be termed the "Nolan Rules" for making senior appointments to public sector organizations.⁴² These rules have come to be seen to represent international best practice. They focus on a code of practice, seven principles of public life, and a procedural model administered by a Commissioner for Public Appointments. The Code of Practice for Ministerial Appointments to Public Bodies⁴³ sets out detailed information designed to regulate, monitor and report on ministerial appointments to specific bodies, including the British Broadcasting Corporation. The Code of Practice:

sets out the regulatory framework for the public appointments process and is based upon seven principles as recommended by the Committee on Standards in Public Life. It aims to provide departments with a clear and concise guide to the steps they must follow in order to ensure a fair, open and transparent appointments process that produces a quality outcome and can command public confidence.⁴⁴

The seven principles of public life that underpin the Code of Practice and are designed to ensure appointment on merit and quality of outcome⁴⁵ are:

Ministerial responsibility: The ultimate responsibility for appointments is with ministers.

Merit: All public appointments should be governed by the overriding principle of selection based on merit, by the well-informed choice of individuals who through their abilities, experience and qualities match the need of the public body in question.

Independent scrutiny: No appointment will take place without first being scrutinised by an independent panel or by a group including membership independent of the department filling the post.

Equal opportunities: Departments should sustain programmes to deliver equal opportunities principles.

Probity: Board members of public bodies must be committed to the principles and values of public service and perform their duties with integrity.

Openness and transparency: The principles of open government must be applied to the appointments process, its working must be transparent and information provided about the appointments made.

Proportionality: The appointments procedures need to be subject to the principle of proportionality, that is they should be appropriate for the nature of the post and the size and weight of its responsibilities.⁴⁶

The Appointment Procedure

The appointment procedure is a detailed process and includes a requirement that role and person specifications be produced for "each and every appointment as member, chair or deputy chair of a public body."⁴⁷ These specifications cannot be assumed to remain unchanged and must be revisited for each subsequent appointment to the same body.⁴⁸ Subject to a satisfactory performance review,⁴⁹ reappointment is possible;⁵⁰ however, "the maximum period in office must not exceed 10 years on the same board."⁵¹

In order to "ensure a demonstrably fair and open process" and as "diversity is an essential element on public bodies", vacant positions on the boards of public bodies must be broadly advertised to reach a wide range of potential candidates.⁵² In addition, anyone — including government Ministers and officials — may suggest names of potential candidates; however, regardless of the way in which a candidate is brought forward, all applicants must go through the same formal application process, including completing an application form. ⁵³

The selection stage of the appointment process concerns the identification and selection of appointees. To maintain the principles of appointment on merit and equal opportunity and diversity, independent assessors are involved at this stage.⁵⁴ The independent assessor reviews the earlier stages of the process and must be directly involved in shortlisting and interviewing candidates. Appointments to significant public bodies such as the British Broadcasting Corporation warrant the involvement of an advisory or scrutiny panel which oversees the key stages of the appointment process. The panel membership includes "an official from the department, a representative of the public body or other interested group, as appropriate, but must include at least one independent assessor."⁵⁵

Applicants for appointment to public bodies must answer a standard question on political activity. This question is designed to allow for the monitoring of political activity of candidates for public appointment "in so far as it is already in the public domain"⁵⁶, such as whether the candidate has ever held or sought public office. The question does not seek personal or private information or voter preference. The political activity question is reproduced here as Appendix 16.

All shortlisted candidates must have been satisfactorily assessed against the publicized selection criteria. The final decision on appointment lies with the Minister responsible. However:

... the overriding principle remains appointment on merit and no candidate can be recommended to ministers unless they have been judged as suitable against the established selection criteria;

ministers will wish to balance boards in terms of diversity as well as skills and experience; consequently, departments may recommend that ministers appoint any candidate who has fully met the selection criteria in order to assist in achieving a desired balance on a board's membership;

under no circumstances, however, should a candidate who has been judged unsuitable for an appointment be recommended in order to achieve that balance on a board.⁵⁷

The Code of Practice contains additional criteria for auditing compliance with the Code,⁵⁸ as well as a complaints procedure,⁵⁹ and procedures for compiling annual statistics and information on appointments.⁶⁰

Recent U.K. Legislative Initiatives
and the Appointment Process

It is worth noting that the United Kingdom has recently introduced legislation with the aim of substantially reforming the communications sector, including broadcasting. The new United Kingdom Communications Bill was introduced in the House of Commons in November 2002.⁶¹ Notably, the new legislation proposes transferring regulatory responsibilities from five bodies or office holders in the communications sector to a newly created body, OFCOM (Office of Communications). The five agencies ceding regulatory control are:

1. The Broadcasting Standards Commission, a non-departmental public body which has statutory responsibilities for standards and fairness in broadcasting. It has three main tasks, as established by the Broadcasting Act 1996. These are to produce codes of conduct relating to standards and fairness; to consider and adjudicate on complaints; and to monitor, research and report on standards and fairness in broadcasting;

2. The Director General of Telecommunications, who is responsible for running the Office of Telecommunications (Oftel) — the U.K. telecommunications regulator. Oftel is a non-ministerial government department. The Director General is responsible under the Telecommunications Act 1984 for administering and enforcing the licences that regulate telecoms operators. His duties include those of ensuring that adequate telecommunications services are provided throughout the U.K.; of promoting the interests of consumers; and of maintaining effective competition;

3. The Independent Television Commission, the statutory body which licences and regulates independent television services in the U.K., including cable and satellite. Operating under powers derived from the Broadcasting Acts 1990 and 1996, their responsibilities include setting and maintaining the standards for programmes, economic regulation, public service obligations, research, advertising and technical quality;

4. The Radio Authority, which is the statutory body responsible for regulation and licencing of independent radio broadcasting in the U.K., that is to say all non-BBC radio services. Operating under powers derived from the Broadcasting Acts 1990 and 1996, their responsibilities include frequency planning, the awarding of licences, the regulation of programming and radio advertising, and the supervision of the radio ownership system; and

5. The Secretary of State, who has a regulatory role in respect of the allocation, maintenance and supervision of non-military radio spectrum in the U.K.. This role is exercised through the Radiocommunications Agency, an executive agency of the Department of Trade and Industry.⁶²

Thus it appears that the present format and composition of the BBC Board of Governors would remain unchanged by the new legislation. The manner of appointment to the board, governed as it is by the procedural model administered by the Commissioner for Public Appointments, would also remain unchanged.

E. Proposed Solutions

Appointments

The Committee heard witness testimony that raised many of the same concerns as those expressed in the recent United Kingdom and Australian studies into appointments to public bodies. Indeed, transparency, accountability and an arm's-length relationship with the government were of paramount concern. Therefore, the Committee believes that it is both appropriate and necessary that criteria and guidelines be developed for nominations to the CRTC and the CBC. For example, in the interests of fuller accountability and arm's-length from government, nominations to the CBC Board should be made by a number of sources, and the CBC President should be hired by and be responsible to the Board. Accordingly:

Furthermore, the Committee heard witness testimony concerning the number of CRTC commissioners. Numerous witnesses suggested that the current composition of 13 full-time commissioners, including 6 regional commissioners who live in their representative regions, has created problems in decision-making. Some contend that the regional commissioners tend to focus their decisions on their own regions and not view the system through a national lens, resulting in fragmented policies that place national interests at odds with those of the regions. Moreover, decisions made by hearing panels composed of ever-shifting memberships leads to confusing and complicated rulings. Such a system makes consistency and rationality difficult to predict, to the detriment of the industry and the Canadian public in general. It was suggested that a smaller, more-focused Commission would be more capable of efficient and effective decision-making and keep a national focus on the issues. Thus, it was suggested that there be a reduction in the number of commissioners and that regional commissioners be abolished, but that Commission membership be drawn from across the country to develop national policies. Therefore:

The Committee recognizes that a review of the CRTC's structure and functioning will be required prior to the implementation of this recommendation. This matter is discussed in Chapter 19.

Conflicts of Interest

A continuing problem is the perceived close relationship between the Commission and the industries that it regulates. Some critics worry that a revolving door exists which allows those serving on the Commission to come from industry or law firms that deal with the Commission and then go back to industry after their terms are over. Supporters of the current situation argue, however, that appointees are inevitably drawn from a relatively small pool of people who have highly specialized knowledge and experience. The vast majority of potential candidates will be people who have had some experience in industry. Indeed, knowing the players and being able to see issues from the vantage points of those who are actually delivering broadcasting and communication services to Canadians can have great advantages. Still, the perception remains that the Commission is rife with potential conflicts of interest.

Although it is noteworthy that Professor Schultz, in a report prepared for the Committee, found little evidence that a problem exists, it is prudent to ensure that some "firebreaks" are in place. Professor Schultz also notes that while Cabinet ministers are prohibited from contacting Commissioners about issues that are before the Commission, similar rules do not apply to those representing industry. Another nagging problem is that while commissioners and former staff members are prohibited from being employed by regulated companies for a year after they have left the Commission, this freeze is fraught with difficulty. Having to remain "on the shelf' for a year may discourage well-qualified people from taking appointments because their re-entry will have caused too much difficulty and loss of income.

On the other hand, critics argue that one year is not enough to ensure that a conflict of interest or unfair advantage does not take place. The Committee therefore wishes to make a strong statement about the need for the CRTC to maintain an arm's-length relationship with those whom it regulates. Furthermore, the Committee reaffirms the importance of ensuring that an arm's-length relationship is maintained between the CRTC and the broadcasting industry. The provisions of the government's Conflict of Interest Code for Public Office Holders, the Lobbyists Registration Act and Lobbyists Code of Conduct should be seen as minimum legal and ethical standards.

The Committee would also like to see the appearance of neutrality strengthened and enhanced. Accordingly:

Endnotes