Archived - Archived information - Revised Lobbyists' Code of Conduct - Background paper

October 2014

Table of contents

• Message from the Commissioner
• Introduction
• Changes
  • Scope
  • New Principle about Respect for Democratic Institutions
  • Rule 8 on Improper Influence Amended
    • Preferential access
    • Political activities
    • Gifts
  • Clarifying the Role of the Responsible Officer
  • A Balanced Code with a Revised Introduction
• Next Steps
• Appendix 1 – Revised Lobbyists’ Code of Conduct for consultation (2014)
• Appendix 2 – Lobbyists’ Code of Conduct (1997)

Message from the Commissioner

The purpose of the Lobbying Act (the Act) is to ensure that federal lobbying activities are conducted in a transparent manner. In that context, the Lobbyists' Code of Conduct (the Code) provides a set of principles and rules which outline the behaviour expected of lobbyists to ensure they conduct themselves according to the highest ethical standards. As Commissioner of Lobbying, it is my responsibility to administer both the Act and the Code. In March 2009, I indicated to the House of Commons Standing Committee on Access to Information, Privacy and Ethics that I would consider reviewing the Code. In September 2013, I decided that it was time to determine whether the Code should be amended. A public consultation was thus launched to solicit views to help me make that determination. In May 2014, I published a report containing an analysis of the consultation, and I indicated that while the Code is working well, there were opportunities for improvement.

I have revised the Code, based on the comments I heard and my own experience in administering it. I am pleased to provide a revised Code for consultation. The purpose of this paper is to provide rationale and background for the changes I have made to the Code. I would like to highlight a few changes.

A key change to the revised Code is related to its scope. The scope of the Code has been changed to match that of the Act. It has been limited to cover interactions between lobbyists and federal public office holders. Therefore, all rules that relate to the client/lobbyist relationship have been removed. I have added a new principle to stress the need for lobbyists to act in a manner that does not diminish public confidence and trust in government. Other amendments are intended to clarify the notion of conflict of interest, specifically, the old Rule 8. To achieve greater clarity, I have complemented this rule with additional, more specific rules about preferential access, political activities and gifts.

These new rules are consistent with the 2009 Federal Court of Appeal decision in Democracy Watch v. Barry Campbell and the Attorney General of Canada (Office of the Registrar of Lobbyists)^{Note de bas de page 1}. I have clarified the role of the responsible officer in organizations and corporations. Finally, the introduction to the Code was revised, in part to clarify who is subject to the Code, as well as the consequences for breaches.

In my view, the revised Code strikes a balance between offering the clarity that lobbyists need, with the brevity that all parties want. The Code continues to maintain a balance between principles and rules, and is consistent with the 2009 Federal Court of Appeal decision. I believe the revised Code will further reinforce the already strong foundation of Canada’s lobbying regime. I look forward to hearing all comments from interested stakeholders.

Karen E. Shepherd
Commissioner of Lobbying

Introduction

The requirement to develop a code of conduct for lobbyists was introduced in amendments to the Lobbyists Registration Act, passed in 1996. This authority was originally provided to the former Ethics Counsellor, who published the first federal Lobbyists’ Code of Conduct in the Canada Gazette on February 8, 1997, following extensive public consultations. The Code came into effect on March 1, 1997, and is comprised of three overarching principles and a set of eight rules addressing transparency, confidentiality and conflict of interest.

The Ethics Counsellor indicated he would only initiate an investigation if there was an alleged breach of the rules.^{Note de bas de page 2} In 2006, the Registrar of Lobbyists, who was then responsible for the Code, decided that allegations of breaches of the principles as well as the rules could trigger investigations. In 2008, I maintained this position in a notice posted on my website.

Breaches of the Lobbyists’ Code of Conduct (the Code) are not subject to fines or jail terms. At the end of an investigation of an alleged breach of the Code, the Lobbying Act requires that the Commissioner table a Report of the findings, conclusions and reasons for those conclusions, in both Houses of Parliament.

The principles and rules of the Code have not changed since its introduction in 1997. However, in Democracy Watch v. Barry Campbell et al., the Federal Court of Appeal (FCA) ruled that the September 2002 Guidelines issued by the former Ethics Counsellor regarding Rule 8 of the Lobbyists' Code of Conduct were unreasonable. The decision required a broader interpretation of the concept of conflict of interest, and directed me to revise the Guidance accordingly, which I did in November 2009. In August 2010, I clarified the application of Rule 8 specifically to political activities.

Considering the views heard during the consultation, and my own experience, I have revised the Lobbyists’ Code of Conduct. The Code must continue to provide assurance to Canadians that lobbying is conducted in accordance with the highest ethical standards. This is essential to ensuring that Canadians have confidence in the integrity, objectivity and impartiality of government decision-making.

Changes

Scope

The main objective of the Lobbying Act is to provide transparency to the communications that take place between lobbyists and federal public office holders. The public consultation held in the fall of 2013 revealed a general consensus that the scope of the Code should be similar to that of the Act. Interactions between lobbyists and their clients are business relationships that fall outside of the scope of the Act. I therefore removed the following rules that relate to client/lobbyist relationships:

• 4. Confidential information

  Lobbyists shall not divulge confidential information unless they have obtained the informed consent of their client, employer or organization, or disclosure is required by law.

• 5. Insider information

  Lobbyists shall not use any confidential or other insider information obtained in the course of their lobbying activities to the disadvantage of their client, employer or organization.

• 6. Competing interests

  Lobbyists shall not represent conflicting or competing interests without the informed consent of those whose interests are involved.

• 7. Disclosure

  Consultant lobbyists shall advise public office holders that they have informed their clients of any actual, potential or apparent conflict of interest, and obtained the informed consent of each client concerned before proceeding or continuing with the undertaking.

I replaced Rule 4 with a new rule that relates to confidential information belonging to public institutions. If lobbyists come in contact with such confidential information, they must neither use nor disclose this information without the appropriate authority to do so. This new rule supports the expectation that lobbyists should avoid acting in a manner that diminishes public confidence in federal institutions.

• 5. A lobbyist shall neither use nor disclose confidential information received from a public office holder, without the consent of the originating authority.

I also amended the principle relating to integrity and honesty to remove the reference to clients, employers, the public and other lobbyists as these interactions are outside of the scope of the Act.

The interactions between clients of lobbyists and public office holders should also not be governed by the Code, unless clients are lobbyists themselves. The only behaviour of clients that is currently contemplated in the Act relates to the prohibition on the payment of contingency fees.

New principle about respect for democratic institutions

Lobbying is a legitimate activity. It is potentially an important source of information that can support government in making sound public policy decisions. However, it must be conducted in a transparent manner and in accordance with the highest ethical standards. In that context, lobbyists should represent the interests of their clients and employers while respecting democratic institutions. As many pointed out during the 2013 consultation, public office holders have a duty to put the public interest first. Although lobbyists do not share this duty, they should not act in a manner that diminishes public confidence in public institutions and government decision-making. A fourth principle has thus been added to the Code:

• Respect for democratic institutions

  Lobbyists should respect democratic institutions. They should act in a manner that does not diminish public confidence and trust in government.

Rule 8 on improper influence amended

The 2009 decision by the Federal Court of Appeal in the case of Democracy Watch v. Barry Campbell stated that avoiding a conflict of interest when lobbying is critical to ensuring legitimacy. In particular, Justice Pelletier stressed the following points.

• [52] Improper influence has to be assessed in the context of conflict of interest, where the issue is divided loyalties. Since a public office holder has, by definition, a public duty, one can only place a public office holder in a conflict of interest by creating a competing private interest. That private interest, which claims or could claim the public office holder's loyalty, is the improper influence to which the Rule refers.
• [53] ... A lobbyist's stock in trade is his or her ability to gain access to decision makers, so as to attempt to influence them directly by persuasion and facts. Where the lobbyist's effectiveness depends upon the decision maker's personal sense of obligation to the lobbyist, or on some other private interest created or facilitated by the lobbyist, the line between legitimate lobbying and illegitimate lobbying has been crossed. The conduct proscribed by Rule 8 is the cultivation of such a sense of personal obligation, or the creation of such private interests.^{Note de bas de page 3}

I have essentially maintained the wording of Rule 8, as it relates to the notion of improper influence. However, for clarity, I have added the words “real or apparent” to reflect the decision of the Federal Court of Appeal. Justice Pelletier put forth that a conflict of interest exists when actions by a lobbyist create a tension between the private interests and the public duties of a public official.

To clarify the manner in which the Code addresses conflict of interest, I have added four new rules relating to the areas of preferential access, political activities and gifts.

Preferential access

As stated in the Federal Court of Appeal’s decision, lobbying is legitimate when lobbyists attempt to influence public office holders to make decisions based on persuasion and facts. Lobbying a public office holder who is a relative, friend or someone with whom the lobbyist has financial or business dealings creates a conflict of interest, because of the tension that exists between the public office holder’s private interest and their public duty. Two new rules have been added to specifically prevent such situations:

• 7. A consultant lobbyist shall not arrange for another person a meeting with a public office holder who is a relative or friend of the lobbyist or has financial or business dealings with the lobbyist.
• 8. A lobbyist shall not lobby a public office holder who is a relative or friend of the lobbyist or has financial or business dealings with the lobbyist. A lobbyist shall also not lobby other public office holders who work within that public office holder’s area of responsibility.

Political activities

Political activities are defined in the Public Service Employment Act as:

• (a) carrying on any activity in support of, within or in opposition to a political party;
• (b) carrying on any activity in support of or in opposition to a candidate before or during an election period; or
• (c) seeking nomination as or being a candidate in an election before or during the election period.

The approach I have adopted for lobbyists is consistent with this broad definition contained in the Public Service Employment Act that applies to public servants. When lobbyists carry out political activities in support of a candidate, they must consider the risk of creating a sense of obligation on the candidate’s part. This obligation would create a tension between the candidate’s private interest (i.e., getting elected) and their public duty (if elected), if that individual were to lobby them. Lobbying other public office holders who fall within the area of responsibility of that public office holder (i.e., a government department if the public office holder in question is Minister of that department) may also give risk to a conflict of interest. The new rule thus prohibits lobbyists from lobbying public office holders when they have performed such political activities for them, as well as other public office holders within their area of responsibility.

• 9. A lobbyist shall not lobby a public office holder if political activities undertaken by the lobbyist prior to or at the same time as the lobbying activities create a sense of obligation which might bring into question the public office holder’s primary duty to uphold the public interest. A lobbyist shall also not lobby other public office holders who work within that public office holder’s area of responsibility.

The Canadian Charter of Rights and Freedoms provides Canadians with “freedom of thought, belief, opinion and expression” and any restriction to these rights should be “only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.” Therefore, for individuals who lobby public office holders, placing limits on their subsequent lobbying is warranted, when political activities create a conflict of interest for the public office holder. This is consistent with the Federal Court of Appeal’s decision.

It should be noted that certain political activities, if undertaken by a lobbyist, may not lead to a conflict of interest situation for the public office holder. In my guidance issued in 2010, I indicated that: “voting in an election, placing a sign on a lawn, purchasing a ticket to a fundraising event such as a barbeque or golf tournament, or donating money to an election campaign within the limits established in the Canada Elections Act” are examples of political activities that are allowable as they carry little or no risk of creating a conflict of interest. I also indicated in 2011 that participating on a political panel and expressing one’s views is a political activity. Unless a public office holder asks the individual to appear as a spokesperson, there is little to no risk of creating a conflict of interest.^{Note de bas de page 4}

Other activities may be more risky and I urged lobbyists to exercise caution when undertaking them. For example, an individual who wants to lobby or is lobbying an elected official should not serve on the board of directors of his or her electoral district association, or organize a fundraising activity for their benefit. It is also risky to chair the election campaign of a candidate if lobbying of that individual is contemplated. The new rule relating to political activities clarifies the risk such activities might raise, and is consistent with the 2009 decision of the Federal Court of Appeal.

It was suggested during the consultation that a time limit could be applied, after which political activities would cease to be a factor in terms of creating a conflict of interest. Some have suggested that a five-year cooling-off period similar to the one included in the Lobbying Act for former designated public office holders would be appropriate. I concur that such a time limit on political activities would be consistent with the spirit of the Act. I will consider including a time limit in new Guidance, which will be made public when the new Code comes into effect.

Gifts

In the past, I have indicated that “the provision of a gift, an amount of money, a service, or property without an obligation to repay" may give rise to a competing obligation for a public office holder, and create a real or apparent conflict of interest. In my opinion, further clarification is still required with regards to what constitutes an acceptable gift from lobbyists to public office holders.

I concur with comments received during the recent consultation which indicated that guidance to lobbyists would be appropriately placed in the Lobbyists’ Code of Conduct. Various legislation and values and ethics codes address the issue of gifts to public officials, whether appointed or elected, and most include allowances for expressions of courtesy or protocol. In general, gifts that might reasonably be seen as an attempt to influence public office holders in the exercise of public duties are prohibited. It follows that a reciprocal prohibition be applied to lobbyists in this area. To that end, I have added the following rule:

• 10. A lobbyist shall not provide or promise a gift, hospitality or other benefit that a public office holder is not allowed to accept.

Clarifying the role of the responsible officer

The Code that was introduced in 1997 requires lobbyists to “indicate to their client, employer or organization their obligations under the Lobbying Act, and their obligation to adhere to the Lobbyists' Code of Conduct.” For corporations and organizations, the Lobbying Act places the responsibility to comply solely on the responsible officer, who is the most senior paid employee of the corporation or organization. The Act requires responsible officers to carry out specific registration activities whether or not they themselves are listed as in-house lobbyists in the registration for which they are responsible. Section 7 requires that they:

• determine whether the “significant part of duties” registration threshold has been met by their corporation or organization;
• when required, file the organization or corporation’s registration, disclosing required information, including a list of in-house lobbyists;
• ensure that the information submitted in a registration is kept up to date; and
• file monthly communication reports when an in-house lobbyist has an oral and arranged communication with a designated public office holder.

In addition, every employee listed in a registration is subject to the Lobbyists' Code of Conduct.

To bring the Code in line with the Act, I added a rule that clarifies the role of responsible officers. This rule will facilitate compliance with both the Act and the Code.

• 4. The responsible officer (the most senior paid employee) of an organization or corporation shall inform employees who lobby on the organization’s or corporation’s behalf of the responsible officer’s obligations under the Lobbying Act and the obligations of the employees under the Lobbyists' Code of Conduct.

A balanced code with a revised introduction

During the 2013 consultation, several participants stated that the Code should maintain a proper balance between principles and rules. I believe that the revised Code is balanced in this regard. It was important to me to maintain the Code’s succinct and easy to read format.

I also wanted to clarify who is subject to the Code. It is important that lobbyists, public office holders and Canadians understand that the Code applies to all individuals who are required to file a registration and all individuals who are required to be listed in a registration for corporations and organizations. This remains true whether or not a registration has actually been filed, and this clarification has been included in the introduction of the Code.

It was recommended during the recent consultation that the sanctions for breaching the Code be made explicit in the Code itself. I added this information to the introduction. I also made it explicit that anyone can lodge a complaint with my Office about a suspected breach of the Code.

Next steps

This document is intended to be distributed widely. I am interested in hearing views and comments of all interested stakeholders. The consultation period will run from October 16, 2014 to December 19, 2014. Comments can be submitted to consultation@ocl-cal.gc.ca and will be posted on my Office’s website.

As is required by the Lobbying Act, I will refer the final Code to the House of Commons Standing Committee on Access to Information, Privacy and Ethics, prior to publishing it in the Canada Gazette.

Until such time as the new Code is in effect, the Lobbyists’ Code of Conduct introduced in 1997 remains in place.

Appendix 1 – Revised Lobbyists’ Code of Conduct for consultation (2014)

Introduction

The Commissioner has the authority, under the Lobbying Act, to develop and administer a Lobbyists’ Code of Conduct (the Code). The first version of the Code came into effect on March 1, 1997. Following extensive public consultations, the Commissioner of Lobbying amended the Code. The revised Code was referred to the House of Commons Standing Committee on Access to Information, Privacy and Ethics on (date tbd), before being published in the Canada Gazette. This version of the Code came into force on (date tbd).

The purpose of the Code is to assure the Canadian public that lobbying of public office holders is done ethically and with the highest standards with a view to enhancing public confidence and trust in the integrity, objectivity and impartiality of government decision-making. In this regard, the Code complements the registration requirements of the Lobbying Act, which came into force on July 2, 2008.

The term "public office holder" as defined in the Lobbying Act includes Senators and Members of the House of Commons and their staff, officers and employees of federal departments and agencies, all governor-in council appointees, and members of the Canadian Armed Forces and the Royal Canadian Mounted Police.

The Code applies when a registration is required under the Lobbying Act, whether or not a registration has actually been filed. Specifically, the Code applies to individuals who are required to register or be listed in a registration under sections 5 or 7 of the Lobbying Act.

The preamble of the Lobbyists' Code of Conduct states its purposes and situates the Code in a broader context. The preamble is followed by a body of overarching principles and a set of specific rules. The principles set out the goals and objectives to be attained, while the accompanying rules provide more detailed requirements for behaviour related to the principles in applied situations. Lobbyists, when engaging in lobbying activities, shall meet the standards set out in the principles and rules of the Code.

Under the Lobbying Act, the Commissioner shall open an investigation when the Commissioner has reason to believe one is necessary to ensure compliance with the Act or the Code. The Commissioner of Lobbying has the authority to enforce the Lobbyists' Code of Conduct if there is an alleged breach of either a principle or a rule of the Code. The Code is a non-statutory instrument, and carries no fines or jail terms. Anyone suspecting non-compliance with the Code should forward information to the Commissioner. Investigations are conducted in accordance with the Lobbying Act and respecting the principles of natural justice. At the end of the investigation, the Commissioner shall table a Report in both Houses of Parliament, detailing the findings and conclusions and reasons for these conclusions.

Preamble

The Lobbyists' Code of Conduct is founded on four concepts stated in the Lobbying Act:

• Free and open access to government is an important matter of public interest;
• Lobbying public office holders is a legitimate activity;
• It is desirable that public office holders and the public be able to know who is engaged in lobbying activities; and
• A system for the registration of paid lobbyists should not impede free and open access to government.

The Lobbyists’ Code of Conduct is an important instrument for promoting public trust in the integrity of government decision-making. The trust that Canadians place in public office holders to make decisions in the public interest is vital to a free and democratic society.

Public office holders, when they deal with the public and with lobbyists, are required to adhere to the standards set out for them in their own codes of conduct. For their part, lobbyists communicating with public office holders must also abide by standards of conduct, which are set out below.

Together, these codes play an important role in increasing public confidence in the integrity of government decision-making.

Principles

Integrity and honesty

Lobbyists should conduct with integrity and honesty all relations with public office holders.

Openness

Lobbyists should be open and frank about their lobbying activities.

Professionalism

Lobbyists should observe the highest professional and ethical standards. In particular, lobbyists should conform fully with not only the letter but the spirit of the Lobbyists' Code of Conduct as well as with all the relevant laws, including the Lobbying Act and its regulations.

Respect for democratic institutions

Lobbyists should respect democratic institutions. They should act in a manner that does not diminish public confidence and trust in government.

Rules

Transparency

Identity and purpose

1. A lobbyist shall, when communicating with a public office holder, disclose the identity of the person, organization or corporation on whose behalf the communication is made and the nature of the relationship with that person, organization or corporation, as well as the reasons for the approach.

Accurate information

2. A lobbyist shall provide information that is accurate and factual to public office holders in order to avoid misleading public office holders.

Disclosure of obligations

3. A consultant lobbyist shall inform each client of their obligations as a lobbyist under the Lobbying Act and the Lobbyists' Code of Conduct.

4. The responsible officer (the most senior paid employee) of an organization or corporation shall inform employees who lobby on the organization’s or corporation’s behalf of the responsible officer’s obligations under Lobbying Act and the obligations of the employees under the Lobbyists’ Code of Conduct.

Confidential information

5. A lobbyist shall not use nor disclose confidential information received from a public office holder, without the consent of the originating authority.

Conflict of Interest

6. A lobbyist shall not place public office holders in a real or apparent conflict of interest by proposing or undertaking any action that would constitute an improper influence on a public office holder.

In particular:

• Preferential access

  7. A consultant lobbyist shall not arrange for another person a meeting with a public office holder who is a relative or friend of the lobbyist or has financial or business dealings with the lobbyist.

  8. A lobbyist shall not lobby a public office holder who is a relative or friend of the lobbyist or has financial or business dealings with the lobbyist. A lobbyist shall also not lobby other public office holders who work within that public office holder’s area of responsibility.

• Political activities

  9. A lobbyist shall not lobby a public office holder if political activities undertaken by the lobbyist prior to or at the same time as the lobbying activities create a sense of obligation which might bring into question the public office holder’s primary duty to uphold the public interest. A lobbyist shall also not lobby other public office holders who work within that public office holder’s area of responsibility.

• Gifts

  10. A lobbyist shall not provide or promise a gift, hospitality or other benefit that a public office holder is not allowed to accept.

Appendix 2 – Lobbyists’ Code of Conduct (1997)

Preamble

The Lobbyists' Code of Conduct is founded on four concepts stated in the Lobbying Act:

• Free and open access to government is an important matter of public interest;
• Lobbying public office holders is a legitimate activity;
• It is desirable that public office holders and the public be able to know who is engaged in lobbying activities; and,
• A system for the registration of paid lobbyists should not impede free and open access to government.

The Lobbyists' Code of Conduct is an important initiative for promoting public trust in the integrity of government decision-making. The trust that Canadians place in public office holders to make decisions in the public interest is vital to a free and democratic society.

To this end, public office holders, when they deal with the public and with lobbyists, are required to honour the standards set out for them in their own codes of conduct. For their part, lobbyists communicating with public office holders must also abide by standards of conduct, which are set out below.

Together, these codes play an important role in safeguarding the public interest in the integrity of government decision-making.

Principles

Integrity and honesty

Lobbyists should conduct with integrity and honesty all relations with public office holders, clients, employers, the public and other lobbyists.

Openness

Lobbyists should, at all times, be open and frank about their lobbying activities, while respecting confidentiality.

Professionalism

Lobbyists should observe the highest professional and ethical standards. In particular, lobbyists should conform fully with not only the letter but the spirit of the Lobbyists' Code of Conduct as well as all the relevant laws, including the Lobbying Act and its regulations.

Rules

Transparency

1. Identity and purpose

Lobbyists shall, when making a representation to a public office holder, disclose the identity of the person or organization on whose behalf the representation is made, as well as the reasons for the approach.

2. Accurate information

Lobbyists shall provide information that is accurate and factual to public office holders. Moreover, lobbyists shall not knowingly mislead anyone and shall use proper care to avoid doing so inadvertently.

3. Disclosure of obligations

Lobbyists shall indicate to their client, employer or organization their obligations under the Lobbying Act, and their obligation to adhere to the Lobbyists' Code of Conduct.

Confidentiality

4. Confidential information

Lobbyists shall not divulge confidential information unless they have obtained the informed consent of their client, employer or organization, or disclosure is required by law.

5. Insider information

Lobbyists shall not use any confidential or other insider information obtained in the course of their lobbying activities to the disadvantage of their client, employer or organization.

Conflict of interest

6. Competing interests

Lobbyists shall not represent conflicting or competing interests without the informed consent of those whose interests are involved.

7. Disclosure

Consultant lobbyists shall advise public office holders that they have informed their clients of any actual, potential or apparent conflict of interest, and obtained the informed consent of each client concerned before proceeding or continuing with the undertaking.

8. Improper influence

Lobbyists shall not place public office holders in a conflict of interest by proposing or undertaking any action that would constitute an improper influence on a public office holder.