Letter to ETHI on the publication of the Lobbyists' Code of Conduct in the Canada Gazette

May 26, 2023

Sent by email

Mr. John Brassard, M.P.
Chair, Standing Committee on Access to Information, Privacy and Ethics (ETHI)
House of Commons
Ottawa, ON K1A 0A6

RE: Lobbyists’ Code of Conduct publication in the Canada Gazette

Dear Mr. Brassard:

I am writing to confirm that the Lobbyists’ Code of Conduct will be published in the Canada Gazette tomorrow, May 27, 2023 (in keeping with Canada Gazette practice, the Code has been made publicly available earlier today on its website). I am also writing to follow up on the letter from the Standing Committee on Access to Information, Privacy and Ethics of March 20, 2023 which conveyed the Committee’s recommendations with respect to the new edition of the Code.

As noted in the Committee’s letter, these recommendations were based on the testimony and written submissions provided by stakeholders in connection with Committee hearings held on February 14 and 17, 2023. As also noted, these recommendations took into consideration my testimony to the Committee on February 3, 2023, as well as my letter of March 3, 2023, in which I addressed certain issues raised by stakeholders who appeared before the Committee.

I have carefully read and considered the Committee’s recommendations related to the rules on gifts and hospitality and sense of obligation following political work. I will address each in this letter.

Gift and hospitality limits

Low-value

With respect to hospitality, the Committee recommended eliminating the $40 low-value limit for each instance of hospitality and, instead, allowing lobbyists to offer reasonable food and beverage for consumption at in-person receptions or events. To that end, the Committee recommended replacing the term “low-value” in the rule on hospitality with the word “reasonable”.

The Committee stated in its letter of March 20, 2023, that clarity is essential to ensuring that the Code achieves its goal of fostering transparent and ethical lobbying and I agree. For this reason, I have not adopted the recommendation to replace “low-value” with “reasonable” hospitality. In my view, to adopt this recommendation would have replaced a clear standard with an imprecise standard that none of the witnesses who appeared before the Committee offered to define.

As I stated during my appearance before the Committee on February 3, 2023, I believe that $40 is a reasonable limit for both gifts and hospitality provided to officials that clearly demarcates the point at which a gift or instance of hospitality could reasonably be seen to create a sense of obligation. As I also stated, the $40 limit for hospitality, which took account of recent average meal costs in restaurants and the impact of inflation on prices over the last two years, aligns with the hospitality standards for working meetings and receptions that apply to hospitality provided by federal public servants.

In addition, the $40 low-value limit for gifts and hospitality furthers one of the purposes of the federal lobbying regime – which recognizes that free and open access to government is in the public interest – by leveling the playing field for those with limited financial resources.

Annual limit

The Committee recommended increasing the annual limit for gifts and hospitality to $200.

After carefully considering this recommendation, I have updated the Code to replace the $80 annual limit for gifts and the $80 annual limit for hospitality with one annual limit of $200 for the combined value of allowed gifts and/or hospitality that a lobbyist may provide to an official in the same calendar year.

In other words, provided that each gift or instance of hospitality complies with the low-value limit, which continues to be set at $40, a lobbyist may provide any combination of gifts or hospitality to a given official up to an annual maximum amount of $200.

In addition to providing greater clarity, this update provides flexibility to lobbyists to manage their gift and hospitality expenditures. In practice, this means that a lobbyist could allocate the annual amount exclusively to providing either low-value instances of hospitality or low-value tokens of appreciation / promotional items or to providing any combination thereof.

Finally, it is important to note, that even with the $40 low-value limit and the $200 annual limit for gifts and hospitality, officials remain subject to their own separate ethical regimes, some of which set out acceptability criteria for gifts, including hospitality. Consequently, it is possible that these regimes may prevent officials from accepting gifts or hospitality that are allowed under the Code.

Rule on gifts

The Committee recommended that certain types of gifts, including gifts of reasonable value given as expressions of cultural tradition or sponsored travel, be automatically exempted from both the low-value and annual limits where such gifts serve a legitimate purpose.

Expressions of Indigenous cultural tradition and practice

I concur with the Committee that gifts given as expressions of Indigenous cultural tradition and practice be excluded from the application of the gift rule.

The definition of “gift” set out in the Code has therefore been updated to specifically exclude gifts given as “customary expressions of a lobbyist’s Indigenous cultural tradition or practice”. As a result of this clarification, such a lobbyist will not be required to apply for an exemption from the Commissioner in order to provide gifts of this nature to officials.

Sponsored travel

I considered the concern brought forward by the Committee that the gift rule would prohibit registered lobbyists from providing sponsored travel to officials that they lobby or expect to lobby even in circumstances in which such sponsored travel could be seen to serve a legitimate purpose.

I am not persuaded, however, that automatically exempting sponsored travel from the gift rule would be consistent with the fundamental objectives and expectations set out in the Code, including that lobbyists avoid placing officials in conflict of interest situations and that they do not lobby officials who could reasonably be seen to have a sense of obligation towards them.

Given the significant costs of sponsored travel, which typically include transportation as well as meal and accommodation costs, providing such travel to an official (and possibly to their guest(s)) could reasonably be seen to create a sense of obligation on the part of that official, even where such sponsored travel would otherwise serve a legitimate purpose.

In my view, it would also be inconsistent to prohibit a lobbyist from providing a token of appreciation or promotional item to an official valued at more than $40, but to allow them to provide sponsored travel worth thousands of dollars.

For these reasons, sponsored travel continues to qualify as a “gift” within the meaning of the Code and, for clarity, has been explicitly identified in the list of examples provided in the definition of this term.

That said, the gift rule does not prevent lobbyists from providing sponsored travel to officials they do not lobby or expect to lobby, nor does it prevent parliamentarians from accepting sponsored travel. Rather, this rule has been carefully crafted to preclude lobbyists from providing gifts (other than low value tokens of appreciation and promotional items) to officials they lobby or expect to lobby. In practice, this means that lobbyists will not be allowed to lobby officials to whom they have provided sponsored travel.

I recognize that there may be legitimate circumstances where it could be appropriate to grant an exemption when gifts and hospitality provided to officials relate to their official powers, duties and functions. I have therefore updated the section of the Code authorizing the Commissioner to grant exemptions to the application of the gift and hospitality rules to allow the Commissioner to take into consideration whether the gift or hospitality relates to the exercise of a power, duty or function by an official in deciding whether to grant an exemption.

It is worth nothing that, in granting an exemption to the gift rule, the Commissioner may also impose conditions, including a cooling-off period during which a lobbyist may not lobby the official. The Code further specifies that failure to comply with any conditions imposed by the Commissioner in granting an exemption constitutes non-compliance with the rule to which the exemption relates.

Rule on hospitality

The Committee recommended that specific language be added to further clarify how the rule on hospitality will be applied and, more particularly, to confirm that lobbyists will not have to track the value of hospitality consumed by officials attending receptions and events in order to be able to demonstrate that they have respected the low-value and annual limits set out in the Code.

As I outlined in my March 2023 letter to the Committee, the version of the Code that I referred to the Committee in November 2022 sets out a formula for calculating “low-value” in relation to an instance of allowed hospitality that in no way requires lobbyists to track how much food and/or beverage is consumed by an official.

According to this formula, low-value for an instance of hospitality is determined on a per-person basis by dividing the total cost of the food and/or beverage to be provided at an in-person gathering by the number of all individuals reasonably expected to attend the gathering.

In order to make it abundantly clear that lobbyists are not required to track how much food or beverage any given official consumes at such gatherings, I have retained this formula for calculating low-value and added language to further clarify that low-value for hospitality “is not determined by the quantity of food and beverage consumed by an official, and there is no requirement to track what an official consumes while attending a gathering”.

Where a lobbyist may choose to track attendance would be to demonstrate that an official who was invited to attend a gathering did not in fact attend. The lobbyist could subsequently provide that same official with the unallocated value of the annual limit.

Rule on sense of obligation following political work

The Committee recommended that the terms “strategic, high-profile and important” as well as the terms “frequent and/or extensive interactions”, “full-time” and ”near-full-time” be defined to ensure that lobbyists subject to the Code have a clear understanding of the cooling-off periods that apply in respect of political work done for the benefit of an official.

The Committee also expressed its view that it may be appropriate to clarify in the definition of “political work” that engaging in significant political fundraising – even where such fundraising does not involve frequent or extensive interaction with an official or is not done on a full- or near-full-time basis – qualifies as “political work” for the purposes of the rule and would be subject to a cooling-off period.

Refining the definition of political work

As noted in the Committee’s recommendations, I indicated in my March 2023 letter that I would consider defining the terms “strategic, high-profile and important” used in relation to the 24- month cooling-off period.

Upon further reflection, I have decided that defining these broad terms was not the best approach to clarifying this rule or the application of the 24-month cooling-off period. Instead, I determined that clarity would be more effectively enhanced by continuing to specify the types of political roles performed by a lobbyist, with examples, for the benefit of an official or their political party that result in a 24-month cooling-off period.

To that end, the Code removes the terms “strategic, high-profile and important work” and replaces them with “leadership or senior political roles”. These roles, when performed for the official or their political party, are subject to a cooling-off period of 24 months, unless a reduction is granted by the Commissioner. As with the version of the Code referred to the Committee in November 2022, examples include, among others, serving as a designated spokesperson or campaign manager, serving in a senior position on a leadership or election campaign or serving on the executive of an electoral district association.

With respect to the terms “frequent and/or extensive interaction” and “full-time or near-full-time basis”, the Code now quantifies, rather than separately define them.

In particular, political roles, functions or tasks:

• involving frequent and/or extensive interaction with an official have been quantified as those involving “around or more than either 3 times or 8 hours per week worked”
• performed on a full-time or near-full-time basis for an official or their political party have been quantified as those performed “around or more than 24 hours per week worked”

Lobbyists who engage in political roles, functions or tasks that meet these quantitative criteria are subject to a cooling-off period of 12 months unless a reduction is granted by the Commissioner.

Significant political fundraising

For the same reasons expressed in my March 2023 letter to the Committee, I continue to be of the view that the scenario in which a lobbyist engages in significant fundraising efforts for the benefit of an official, but does not either frequently or extensively interact with that official in doing so or engage in such fundraising efforts on a full- or near-full-time basis could have been addressed by the general rule on sense of obligation.

Nonetheless, the definition of “political work” has been expanded to include circumstances in which a lobbyist engages in “fundraising that could reasonably be seen to be significant to the official”, which can result in a cooling-off period.

This additional category of political work requires that the significance of a lobbyist’s fundraising to an official be evaluated on an objective standard based on all of the relevant circumstances. In practice, this evaluation would include such things as the importance of a lobbyists’ efforts in fundraising or the financial impacts of such fundraising.

Lobbyists who engage in such fundraising are subject to a cooling-off period of 12 months or less as determined by the Commissioner on a case-by-case basis. Accordingly, the Code has also been updated to explicitly authorize the Commissioner to determine a cooling-off period for lobbyists who engage in fundraising that could reasonably be seen to be significant to an official. In making such a determination, the Commissioner has the authority to take into account the same non-exhaustive list of considerations that the Commissioner is authorized to consider in granting any reductions to the 24- and 12-month cooling-off periods.

Taken together, the Code’s rule restricting lobbying following political work and the rule on sense of obligation address the various scenarios involving political fundraising:

• a lobbyist who organizes political fundraising in a leadership or senior political role is subject to a 24-month cooling-off period, subject to any reduction granted by the Commissioner;
• a lobbyist who engages in political fundraising involving frequent or extensive interaction with an official or performed on a full- or near-full-time basis is subject to a 12-month cooling-off period, subject to any reduction granted by the Commissioner;
• a lobbyist who engages in political fundraising that could reasonably be seen to be significant to the official, even if such political fundraising does not involve frequent/extensive interaction with an official or is not performed on a full- or near-full-time basis, is subject to a cooling-off period of 12 months or less, as determined by the Commissioner based on the relevant circumstances; and
• any other circumstances involving partisan activities not covered by the rule restricting lobbying following political work could be addressed by the rule on sense of obligation to the extent that the partisan activity could reasonably be seen to create a sense of obligation on the part of the official for whom it was carried out. An example to that effect has been added to the definition of sense of obligation.

I would like to take this opportunity to thank the Committee for its recommendations to further clarify and improve the Code.

I am confident that the Code, which will come into force on July 1, 2023, will meet its objective of fostering transparent and ethical lobbying.

In closing, I would remind the Committee that amendments to the Lobbying Act and its regulations are long overdue. I stand ready to assist the Committee with that important work.

Yours sincerely,
Nancy Bélanger

cc. Vice-chairs: Iqra Khalid, René Villemure

Members: Parm Bains, Michael Barrett, Hon. Greg Fergus, Jacques Gourde, Matthew Green, Lisa Hepfner, Damien C. Kurek, Ya'ara Saks

Clerk of the Committee