ETHI Committee Meeting

     I would like to call this meeting to order.

    I extend to everyone a warm welcome.

    Colleagues, this meeting has been called to receive the annual report of the Commissioner of Lobbying for the fiscal year ended March 31, 2010. That report has been tabled in Parliament. To deal with it, we have us with us today the Commissioner of Lobbying, Karen Shepherd. She's accompanied by the deputy commissioner, René Leblanc, and senior counsel Bruce Bergen. On behalf of the committee, I want to welcome you Ms. Shepherd, Mr. Leblanc, Mr. Bergen.

    First we're going to hear the opening comments from the commissioner. The floor is yours.

     Thank you, Mr. Chair and members of the committee.

    I am pleased to be here today to discuss my 2009-2010 annual report as well as the recent amendments to the Designated Public Office Holder Regulations.

    I am accompanied by Mr. René Leblanc, the Deputy Commissioner of Lobbying, and by Mr. Bruce Bergen, my senior legal counsel.

    This past year has been one of great activity for my office. I have improved the overall management of the office by realigning all the corporate functions under a single executive. Further improvements have been made to the Registry of Lobbyists to make it simpler and easier to use for registrants who disclose their lobbying activities. It is also easier for those who are searching the registry to obtain information on the activities of registered lobbyists.

    I have targeted my outreach in education efforts toward lobbyists, public office holders, parliamentarians, and various stakeholders to inform them about the requirements of the Lobbying Act and the lobbyists' code of conduct.

    Finally, we continue to make progress in streamlining our approach to compliance, so I can keep pace with the growing volume of enforcement activities.

    At my last appearance I indicated my registration team was engaged in a backlog blitz to eliminate what was left of the transitional pending registrations.

    I am pleased to report that my team's efforts are showing great results. The number of pending registrations is at about one hundred and turnaround times continue to improve.

    This is the best situation we have been in since the coming into force of the legislation in 2008.

    In addition, we have implemented a new telephone management system to improve our ability to respond to inquiries on a timely basis. Work has also commenced on developing service standards for our response times for both approving registrations and responding to inquiries from lobbyists and the public.

    As you may know, I recently tabled an amended annual report for 2009-10. At my last appearance I indicated that the number of registered lobbyists had stabilized at around 3,500. However, as a result of a coding error, the statistical reports failed to include new in-house lobbyists in the number of registered lobbyists from July 2008. The number of registered lobbyists is actually closer to 5,000.

    Having said this, let me assure you that all registered lobbyists were properly captured by the registry and the information pertaining to their lobbying activities was always available for public consultation through the registry. The statistical reports have since been corrected and my office continues to conduct rigorous quality assurance testing of the registry to ensure it produces accurate statistics.

     In the last year, in terms of my education and outreach mandate, I met with senior officials of the 20 most lobbied federal institutions to inform them and discuss the application of the act. I also commenced a second round of meetings at the ministerial level.

    I continue to believe that by informing lobbyists, public office holders and the public about the Lobbying Act, greater compliance is achieved.

    For this reason, since April, I expanded my education program to reach out to people in various regions of the country, including lobbyists' groups, public office holders and academia.

    On the compliance side, in 2009-10 my office verified the activities of nearly 300 individuals, corporations, and organizations after learning that they may have been engaged in lobbying activities. We found that 90% of them were properly registered. Most of the remaining 10% were not performing registrable lobbying activities as described in the act.

    Over 400 monthly communication reports have been verified and confirmed by designated public office holders. Only a small percentage of them contained errors, many of them clerical in nature and others resulting from a misunderstanding of the requirements.

    This past year I initiated 16 administrative reviews to look into alleged breaches of the Lobbying Act or the lobbyists’ code of conduct. On the ongoing caseload, ten administrative review reports were submitted to me for consideration. I initiated three investigations.

    The act requires that I refer files to the police when I have reasonable grounds to believe that there has been a breach of the act. Four files were referred to the Royal Canadian Mounted Police.

    The challenge for my office is to complete as many reviews and investigations as we open during the year.

    As I said at my last committee appearance, and for the benefit of new members, the Lobbying Act instructs me to conduct investigations in private. Therefore, I cannot comment on specific cases, nor will I confirm or deny that I am looking into a file.

    Let me now turn to the recent amendments of the Designated Public Office Holder Regulations. For the purposes of the Lobbying Act, federal public office holders are virtually any employee of the federal government, whether elected or appointed.

    In July 2008 the act introduced a subcategory of designated public office holders, which includes officials responsible for high-level decision-making in government. On September 20 of this year, this subcategory was expanded, through regulations, to include members of Parliament, senators, and the staff working in the office of the leader of the opposition in both the House and the Senate who have been appointed pursuant to subsection 128(1) of the Public Service Employment Act.

    Members of Parliament have always been public office holders under the Lobbying Act. If lobbyists needed to register to talk to you prior to your becoming a designated public office holder, they are still required to do so. Conversely, those who, prior to September 20, did not need to register when they met with you are no more required to register now if the circumstances are the same.

    I would like to take this opportunity to say that under the Lobbying Act, compliance does not always require a registration. For example, corporations and organizations may conduct some lobbying activities and are still not be required to file a registration under the Lobbying Act if they do not meet the “significant amount of duties” test. This test has long established 20% of the duties of a lobbyist as the threshold for in-house registration.

    It is important to remember that volunteers and private citizens are not required to register their lobbying activities because they are not paid to do so.

     In addition, members of other levels of government and members of an aboriginal government or an Indian band council do not have to register when communicating with federal public office holders.

    Finally, certain communications, such as requests for information and oral or written submissions to parliamentary committees, are exempt from registration.

    So what does it mean to be a designated public office holder?

    When a registered lobbyist has an oral, arranged communication about a registerable subject matter with a designated public office holder, most of these communications must be disclosed by filing a monthly communication report. The registry has been designed to process large quantities of transactions, so the additional volume of monthly communication reports is not expected to be a problem.

    As I previously indicated, the act gives the commissioner the ability to confirm the accuracy of monthly communication reports. As designated public office holders, you may therefore be approached by my office to confirm such reports. Although there is no requirement on your part to keep records of your communications with lobbyists, I encourage you to do so as a best practice.

    The Lobbying Act introduced a five-year prohibition from lobbying for designated public office holders once they leave office. This prohibition now applies to you. As a result, you will not be able to work as a consultant lobbyist nor be employed to lobby on behalf of a not-for-profit organization when you leave office. However, the act allows you to be employed as an in-house lobbyist by a corporation, but only if lobbying does not constitute a significant part of your duties.

    The Lobbying Act provides me with the power to grant exemptions to the five-year prohibition if granting an exemption would not be contrary to the spirit of the Lobbying Act. To date, I have received sixteen applications and have only granted three based on exceptional circumstances.

    In closing, I would like to touch briefly on the issue of rule 8 of the lobbyists' code of conduct. Rule 8 pertains to placing a public office holder in a conflict of interest. In August I supplemented my November 2009 guidance about rule 8 with some clarifications about the risk of creating a real or apparent conflict of interest when lobbyists get involved in political activities.

    Political and lobbying activities are both legal and legitimate. However, it is when the two intersect that the appearance of a conflict of interest may be created, if not a real one.

    My advice is not intended as a prohibition for lobbyists who wish to engage in political activities, but rather that they should be mindful of the public perception that political activities may create when subsequently performing lobbying activities.

    Mr. Chair, this concludes my remarks. Thank you for your attention.

    I would now welcome your questions.

    Thank you very much, Ms. Shepherd.

    We're now going to go to the first round, seven minutes each.

    Mr. Easter.

    Thank you, Mr. Chair.

    I might mention, in beginning, that I hope we can deal later with the motion I tabled with the committee, prior to this meeting being over. I gave notice at the last meeting.

    On the changes to the Lobbying Act affecting MPs, basically it does get somewhat complicated. And we're all affected by that because sometimes we don't know who's a real lobbyist and who's not. So we're trying to determine in our own office what records to keep on people as they come in. So this specific question relates to that area. If it is a known lobbyist and they just happen to pick up the phone and call you for a three-minute conversation on a question, does that have to be recorded?

    If the individual calls you and is lucky enough to just get you right away on the phone....

    Well, some of them do, through channels.

    Then the way I would answer that is this. Are you a designated public office holder? Yes. Are they communicating with you about a registerable activity? Yes. But was is arranged? The answer would be no.

    So according to the regulations, that particular communication would not need to be recorded in the monthly report. What the lobbyist would need to be determining is whether they needed to file an initial registration.

     Okay. That's helpful.

    You may in fact have denied my questioning in another area with your statement that you can't comment on specific cases. In this particular case, it really relates to Rahim Jaffer and Patrick Glemaud in terms of their possible violations of the Lobbying Act. My question is whether you can tell us, when will you report on that? What departments are involved in your investigation?

    The reason I ask that question is this quote from the Toronto Star on July 21: “And Lobbying Commissioner Karen Shepherd is following up on requests from the Liberals to examine whether Jaffer breached lobbying laws, a spokesperson for Shepherd has said.”

    So it is in the public domain that you are indeed following up on the requests. So when do you plan to report, what departments are involved, and are they cooperating?

    Mr. Chair, it is in the public domain that I am looking into it. I think one of the witnesses actually said we had spoken to them. But in terms of commenting any further, the act does require that I conduct it in private. So I can't comment further.

    Can you comment on whether the government departments or individuals within government are cooperating with either this investigation or others? Are you getting full cooperation from departments?

    I can answer that in general terms. To date, I've had cooperation from anyone in terms of conducting any of my administrative reviews or investigations.

    Not specifically on any given case then, but you note in your report that no charges have been laid yet under this act. But if you determine that there have been violations of the Lobbying Act in a general sense, what steps would you take? Do you issue a statement on the extent of an investigation? Do you refer it to the RCMP? What is the process there?

    If in conducting an administrative review, which is my fact-finding exercise or investigation, I have reasonable grounds to believe that a breach of the act has occurred, then I must refer the matter to a peace officer. As I indicated in my last annual report, I referred four matters to the Royal Canadian Mounted Police. Since then, I have referred one other.

    You mentioned that also on page 70. You mention those four on page 17 of your annual report. You are saying now there are four others.

    No, there's one other.

    I mean one other. Can you give us a sense of what those investigations are about or what happens next, or both?

    The four of the five that I have sent over dealt with unregistered lobbying, and one dealt with a false and misleading statement.

    The next step after I send something over to the RCMP is that I need to suspend looking into the matter. The act requires that I suspend. Once I hear back from the RCMP, then I will determine next steps in terms of whether to continue, for example, with the investigation. The act requires that if I am conducting an investigation, upon completion I must table a report in both houses.

    Thank you.

    You also wrote in your annual report that your office initiated three full investigations into possible contraventions of the Lobbying Act. Is this in the same area relative to those four?

    Yes.

    Okay.

    In the final analysis, then, you refer it to the RCMP, they come back to you, and then you determine whether you investigate further and then report to the House. I'm just trying to figure out the process here. Have I got that correct?

     That's correct.

    Okay.

    You also noted in your annual report that the number of registered lobbyists fell this year. Do you believe that drop to be temporary? Do you believe it to be a result of maybe more difficult restrictions? What do you attribute that drop to?

    Go ahead.

    As I said in my annual report, there's been a drop in the number of lobbyists for a couple of reasons. Some lobbyists have indicated that because of the additional reporting requirements, they have decided to rationalize their approach in terms of the number of people actually communicating with the government. It's one way to try to make sure they are in compliance with the monthly reporting, for example. Others, corporations and organizations, have re-evaluated the “significant part of the duties” tests to determine whether they are hitting the threshold. If they are not, some have chosen not to register.

    Thanks, Mr. Chair.

    Thanks very much, Mr. Easter.

    Before we go to Madam Freeman, I just want to state that the chair disagrees with the statement by the witness that she cannot discuss these cases. The rights of Parliament are very clear. We do have the right to obtain the particulars of cases. The test, of course, to be used by Parliament and parliamentary committees is whether it's in the public interest to do so. It would probably not be in the public interest to discuss at a public meeting the details of cases presently being investigated by the lobbying commissioner. Certainly the right is very much with us, and it's a decision to be made by the committee if they want to pursue it and go in camera. Again, you have an overriding public interest that has to be maintained at all times.

    Madam Freeman.

    I'm going to jump at the opportunity, Mr. Chairman.

    Ms. Shepherd is here to tell us about her activities, and we find ourselves in the same situation as the one Ms. Dawson, the Conflict of Interest and Ethics Commissioner, was so critical of. On July 22, 2010, she called for greater freedom to discuss the investigations themselves. They are public investigations, but everything is kept secret. We are parliamentarians, after all; we can get more information. I do not see why these people have to withhold information.

    As a matter of fact, as part of Ms. Shepherd's mandate, in her annual report, she quite clearly states that her goal remains to ensure that the act is administered in a way that supports greater transparency and high ethical standards in lobbying activities. That's precisely what her colleague, the Conflict of Interest and Ethics Commissioner, Mary Dawson, was so critical of; she said the requirement to keep everything secret did not support transparency and that a better balance should be struck.

    I would like to ask Ms. Shepherd if she feels the same need for greater freedom to discuss her investigations. What prevents her from discussing them with us here today?

    I think that conducting investigations in private is important for my report. The reason is that if I have to send the RCMP, I have to protect the integrity of the investigation it will conduct. To me, what's important is that it be clear in the act.

    When I have concluded an investigation, I have to submit a report to Parliament, with all of my findings.

    We are familiar with that stage. Once you have finished, you report to Parliament; we know that. We don't want to know the details of your investigation, but we would at least like to know...

    You know, there are so many complaints about lobbying these days. I don't know whether you follow the debates in the House of Commons, but we speak out against this kind of conflict all the time. People looking for government contracts who are not registered, they are like lobbyists, they are lobbying. It's a question of what kind. This kind of thing comes up all the time in the House of Commons.

    You are here as the commissioner responsible for administering this act and you are silent because you are not allowed to tell us anything. There is a problem. Do you have any answer?

    Would like to answer, Mr. Bergen?

    I can help the commissioner answer, if you like. One difference is that offences under the Lobbying Act are truly offences that entail criminal sanctions. So if the commissioner does an administrative review and finds reasonable grounds for believing that an offence has been committed by the individual in question, she has to refer the matter to the RCMP. In that case, if it is not done in private, that can put the RCMP in a difficult situation, if they want to investigate. That's one of the differences between the Lobbying Act and the Conflict of Interest Act, which Ms. Dawson is responsible for administering.

    We could go in camera, if you want, Mr. Chairman.

     Well, if you want to make that motion, Madame Freeman, I don't know where you're going. I'm not sure exactly where you're heading. Did you want to talk about it in much detail? Perhaps you could describe to us where you're going.

    Every time a commissioner appears... I went through the same thing with the Standing Committee on Justice and Human Rights. We had the RCMP, CSIS, etc. Now I am here at the Standing Committee on Access to Information, Privacy and Ethics, and the commissioners cannot talk. As parliamentarians, we represent the public. We need to know what is going on in various departments, in various places, and every time, those responsible for giving us information, be it within the RCMP or elsewhere, are mute, silent, and not allowed to disclose anything at all.

    For some, like the RCMP and the intelligence service, it's a matter of national security. In this case, it may be in case there is any investigation. But ultimately, as parliamentarians, we never get any information other than the number of complaints, reviews or investigations referred to the RCMP, for example, and that is all. It's very sparse information.

    I take it you are making a motion to go in camera. Is that so moved?

    Yes. I move that we proceed in camera.

    Madame Freeman has made a motion that the meeting suspend for a minute and proceed in camera.

    (Motion agreed to)

    [Proceedings continue in camera]

    [Public proceedings resume]

     Mr. Siksay, please, for seven minutes.

    Thank you, Chair.

    I appreciate that you are here today, Commissioner, and with your colleagues.

    Commissioner, in your remarks this afternoon you said that back in July 2008 there was a subcategory of designated public officials introduced in the act, and then you noted that on September 20 of this year that was expanded. In 2008, was that due to a legislative change, an actual piece of legislation that changed the act?

    The designated public office holder category is defined in the act in terms of the prime minister, ministers, ministers of state and their staff, and then bureaucracy, assistant deputy ministers and above; also comparable rank, which I have defined in an interpretation bulletin. But there were also, at the time that the act passed through regulations, an additional 11 positions passed. The expansion on the 20th was an expansion through regulation.

    Okay. So there were regulations involved previous to this most recent time?

    Yes, in July 2008.

    Thank you.

    This afternoon you also said you were showing great results and the number of pending registrations is at about 100 and that the turnaround time is continuing to improve. Does that conflict with what you said in the annual report, where you announced that the backlog was completely gone and that it had been completely eliminated? So is it now up to 100 pending registrations?

    Prior to the act coming into force, we had roughly about what seemed to be a normal workload of around 300. When the Lobbying Act came into force, there was a significant backlog in terms of more than, I think, 1,000 registrations that we had to process because there was no transition period in 2008. In indicating that the backlog had been removed, we got back to around that 300 level, but what we've been looking at is trying to actually work on getting that number down and get the registrations up onto the system. So we've been improving that. We're now at roughly 100.

    So your service standard for an inventory of applications to process is 100? Is it lower than that?

    That's one of the things that, to be honest, we're trying to determine. When we were looking at the registration system this year, one of the improvements we're working on, trying to get better at, is in terms of predicting results. If you've seen the annual report this past year and so on, we've been talking about transactions, and that was important in terms of seeing how the registry could actually accommodate the number of changes that were occurring with the monthly reports.

    This year what I've asked the director to work on is looking more at results so that we can actually figure out how many days it's taking us to process a registration and improve those service standards, because it also helps for lobbyists and so on as well to have an expectation of how long it should take.

    So how long does it take right now?

    I don't have a clear answer for you right now. That's what we're trying to determine. Our goal is that something shouldn't be, hopefully, taking us longer than three days. So that's what we're working on.

    Can people do it themselves on the website, or do they have to make contact with somebody in your office? How does that get accomplished?

    One of the things we've spent a lot of time and effort on with registration is making it as easy as possible for lobbyists to register online. What happens when a registration is filed is that there are advisers that go through it to make sure that the registration is complete before approving it and putting it up onto the system. So the lobbyists will certify that everything in there is correct, which they are obligated to do, and then we do the verification for completion before it's actually put up onto the system.

    Now, in the annual report you talk about a decrease in the number of registered lobbyists. Is that observation affected by your comments this afternoon saying that there was an error in the statistical information that has been provided? Does that affect that section or that analysis of the annual report?

    No, it doesn't, actually. I felt it was important to retable it, especially with the act up for review and in terms of transparency, to have the actual number of registered lobbyists properly accounted for. But in terms of the reasons why it is still down, they're still valid.

     Have you done any specific analysis of that? You make some assumptions or some comments on that, but do we really know that it's the economic downturn? Could it be that people are going some other route, that people have gotten frustrated and given up, that they've decided internally to reduce the amount of time to under 20%? Do we know anything about that, really, or are these observations just off the top of our head?

    It's been in doing the outreach activities. So for example, as I indicated, one of the outreach activities I did was to the chamber of commerce. During that discussion it validated one of the things I'd been hearing, which is the fact that companies were deciding to rationalize in terms of how many people were actually speaking to government. It's sort of the same thing if you think about media. You usually don't have the whole office or building speaking; you limit it to one or two people. They were finding that with the monthly communication reports and wanting to stay in compliance they were limiting the number of people actually speaking.

    In the annual report you talk about 239 individuals, corporations, and organizations that were subjected to compliance verification. How were those 239 selected? How does that process work?

    One of the things that I instituted in the office was what we call a media monitoring. So on a daily basis we're checking just to see references of lobbying. And in further verification, one of the initial checks is to determine whether the individuals or corporations are registered. If they are registered, it's great, and as I've noted, 90% of them are. If they're not, further validation is done through other publicly determined sources to determine, upon further research, if they are mostly volunteers or if they're actually lobbying the provincial governments and not the federal government.

    The 239 was, and maybe I'm wrong about this, roughly 10% of the total number of active registrants. Is that a target number, or did it just happen to be from your media monitoring that you came up with the number 239?

    Yes--it's not a target.

    Okay. I just wanted to ask about workload. With all the new folks, the 400 designated public office holders who have been added, does this add to your workload?

    In terms of the monthly communication reports, those go right up onto the system. We verify, and the system can handle the additional communication entries that are expected with the members of Parliament and senators now being included. In terms of the compliance side, I'm still expecting that we'll be able to do the same percentage of sampling. The other requirement for the act would be the requests for exemption, but given the number of public office holders, there have only been, as I said, 16 requests for exemption. At this point, I'm not seeing an issue there.

    Thank you.

    Thank you very much, Mr. Siksay.

    Mr. Albrecht, seven minutes.

    Thank you, Mr. Chair.

    Thank you for being here today, Commissioner.

    I think there still is in a lot of our minds a fair bit of confusion. It's a very complex act and so on. And in addition to that, you comment on page 4 of your report today about the recent amendments of the designated public office holder regulations. Further down on that page, you indicate that the changes occurred on September 20 of this year, and you say the subcategory was expanded through regulation to include members of Parliament, senators, and the staff working in the office of the leader of the opposition in both the House and the Senate.

    Then in the next paragraph, you go on to say that members of Parliament have always been public office holders under the Lobbying Act. Then, further, on the next page, page 6, you go on to say in the fourth paragraph down: “The Lobbying Act introduced a five-year prohibition from lobbying for designated public office holders once they leave office.”

    Then you go on to say that this prohibition now applies to you. So in some ways, I'm getting a confusing method. On page 5 you said that as MPs we've always been designated public office holders, yet you talk about an expansion on September 20. You talk about how we're now subject to something we weren't before, so I'm confused. Help me.

     I'll do my best.

    The Lobbying Act covers an individual who is paid to communicate with a public office holder on a registrable activity. A public office holder has always included all members of Parliament, government institutions, or those working in government institutions, GIC appointments, etc.

    The difference is that when the Lobbying Act came into force, a subcategory was created of those public office holders to represent the high-level decision-makers. In creating that monthly report, for example, it showed not only who the lobbyist was lobbying in terms of initial registration, but who they were communicating with on a monthly basis, which is the reason, I understand, that Parliament added the designated public office holder category.

     Members of Parliament were not previously included in that subcategory of designated public office holders, but on September 20, through regulation, the government included members of Parliament into the designated public office holder category.

    So a designated public office holder is different from a public office holder.

    It's a subcategory of the public office holder. If the universe was public office holders, that is everyone--

    All of us. Only the designated ones--

    --then there was a subcategory of designated public office holders.

    In addition to having an additional reporting requirement of having to file a monthly communication if they had an oral arranged meeting with that individual, the other thing that was done through the act was that anybody in that designated public office holder category was subject to a five-year prohibition on lobbying activities.

    Correct. And we are also subject to that now.

    You are now, as of September 20.

    I think the bottom line is it would seem logical that with the September change it would increase the number of registrations on the part of lobbyists to public office holders. I guess my question is, how has the September change created an increase in workload for your office?

    Secondly, as a public office holder who's now under the same rules that designated public office holders were previously, do you have recommendations for me as a member of Parliament? You said in your statement that it's not really required but it's best practice. What kind of record-keeping should we do? Do you have a template, for example, that may give some commonality across the offices of members Parliament so that we're following the same format?

    Regarding your first question, in terms of workload, I'm not expecting to see a difference in initial registrations being filed, because that requirement for filing has been there. I do expect to see an increase in communication reports, but the system can handle that. Because those go automatically onto the system, there's no additional verification of those by the office. As to the sample reporting that we do on a monthly basis, I'm expecting that we can continue to do the same percentage of verifications.

    In terms of your second question, what I found in doing the outreach activities with the 20 most lobbied government institutions was that there was a variety of methods being used to keep track of records. It depended on the departments or what seemed to be working. Some departments had created templates; others were choosing to use their calendars. Your calendar is probably one of the easiest methods of recording who you're meeting with, and then you can put in the subject matter.

    When conducting verifications, during a monthly verification I'm not asking to verify anything more than the lobbyist is asked to report on. For example, if they were coming to speak to you and the subject matter is health, there would be more details in the initial registration.

    It wouldn't be up to me, as a member of Parliament, to keep a record of what the actual conversation was; it's only a matter of who was there and what the general subject matter was.

     All I would be coming to you to verify is what is in the monthly communication.

    Now, the difference could be if I were conducting an administrative review or an investigation. In that case, I would probably be asking for more details. But in terms of verifying the monthly communication, I don't ask for anything more than what the lobbyist is asked to report on.

    Okay.

    Do I still have some time?

    No, you have five seconds left.

    That concludes the first round, colleagues. We're going to go to the second round of seven minutes.

    Ms. Bennett.

    Before you start, I plan to go to about 5:20, and then we'll deal with Mr. Easter's motion.

    Thank you.

    Commissioner, with regard to the change in the regulations, September 20, were you consulted before those regulations were brought in?

    As it so happens, one of the ministers in the most lobbied departments was Minister Day. In my meeting with him during the outreach activities—it was just after the House had passed the motion to include parliamentary secretaries, and the government had indicated it would be including all members of Parliament...and senators, I believe--I took the opportunity to indicate that if it was simply an expansion of the definition, my system could accommodate it.

    Do you know what problem that was trying to solve?

    No more than what was discussed in the House.

    Were you having trouble doing your investigations before this regulation change?

    Well, the regulation changes only serve to make members of Parliament designated public office holders. As I've indicated, I've not had any problems in terms of doing any investigations.

    So if you hadn't before had any problems having members of Parliament confirm an investigation, or--

    I've not had any problems with administering the act.

    So somehow the changes came out of the blue, without any real problem having been identified by you.

    The problem was not identified by me, no.

    Okay.

    In the annual report it says there were almost 28,000 transactions and that you've sent 87 letters to public office holders to verify the accuracy of 429 communication entries. Is that a normal percentage of the transactions? Is this a spot check, or are these the ones that look a little odd?

    Well, first of all, in terms of the number of transactions, that includes all transactions occurring within the system in terms of updates to registrations, communication entries. With the 87 letters, or the percentage, it's roughly 5% of communication entries that we verify; the average per month is about 625. What I'm getting at, I guess, is that they are two different numbers.

    The transactions are everything that's happening in the system: updates, registrations, communication entries.

    On those 429 communication entries, there must be lots more than that. How many are there, and what percentage have you had to verify the accuracy?

    Could I ask what specific page you're referring to?

    There are roughly 625 communication entries per month of meetings with designated public office holders. I think, on page 5, it shows where there has been a couple of periods of spikes, but on average it's roughly 625 communication entries per month.

    And out of 429, you found 60 errors?

    Yes, mostly over-reporting.

    But that's 14%. Even if it's technical, it means that people don't understand it very well. I mean, 14% seems very high in terms of errors.

     What I found is that there's been over-reporting, for example, in reporting meetings with individuals who are not designated public office holders.

    In doing the verification, we actually did a couple of mass e-mails to lobbyists to inform them of the errors and of what actually constitutes a designated public office holder. But what I'm finding....

    It sounds as if there needs to be some training.

    That's what we're doing. The outreach is for explaining that to individuals. But I'm also finding, from some lobbyists, when they recount stories, that they would rather over-report, which does not constitute a breach of the act, than maybe err on the side of not reporting and be found to be in breach.

    Thank you very much, Ms. Bennett.

    We'll go to Ms. Davidson for five minutes.

    Thank you very much, Mr. Chair.

    Commissioner, thank you very much for being here with us again today. Certainly I think there's a fair amount of confusion, as you've gathered as we've asked questions around the table.

    Is this document that was handed out to us part of an education document?

    Yes. That deck is a smaller version of some of the other decks you will see on the website. The site's tailored a little bit more for members of the committee in terms of what I thought would be pertinent information. But yes, I would consider that an educational tool.

    Okay.

    Is there any plan to do any type of education process with the new designated people?

    Yes, actually.

    As you know, I wrote to all members of Parliament and included “Ten Things You Should Know About Lobbying”. I've also written to all of the political leaders and offered to meet with caucuses, if interested. Actually, I have a couple of meetings being set up at the Senate level and at the House of Commons level. So I welcome the opportunity to come to speak with you more.

    I think it's something that's going to be definitely necessary.

    Dr. Bennett talks about the 14%, which does seem to be pretty high, but some of it sounds as if it's from being overzealous. People do not want to get caught being in contravention, so they're swinging the other way.

    Right, and one of the things I found in doing the outreach is that designated public officer holders are sort of going through it as well, and have decided, in some cases, to contact the lobbyist to sort of say that it wasn't oral and arranged, and they are having it removed from the system.

    So the meeting must be oral and arranged. It has to meet those two criteria before its reportable.

    Yes.

    Okay.

    What kind of advice would you give to each of us for record-keeping? We talked generally about needing to know what the general situation is if it's a health issue. But if you come back to me six months from now and ask if I met with X, Y, and Z and what the conversation was about, I won't have a clue what it was about unless I have better record-keeping than I have today.

    It's a question of why I'd be coming to you. On the monthly report, it's strictly to verify the information the lobbyist is required to report on. So in your case, it would be the name, the member of Parliament, the date, and the subject matter, such as health. That's all I'd be coming to verify with you on a monthly communication report.

    If I were doing an administrative review or an investigation, I may ask you at that point if there is any written documentation, or I would ask you to provide me with further analysis. But that's a different sort of thing. When I'm talking to departments, it's about the record-keeping they need to do to put key things on a file.

    Is there a time limit on any of this, or is it open-ended when it comes to the time you could come back and ask questions?

    There used to be a time limitation of two years for me to look into a matter. That even included referrals to the Royal Canadian Mounted Police and their laying charges; that all had to be done within a two-year period.

    What Parliament did in passing the Lobbying Act was expand that time period from five years from the time I become aware of the incident to not more than ten years after the actual event occurred. When I'm talking to departments, ten years is the number....

     It does create some fairly significant record-keeping challenges, I would think, so we need to do that.

    There's one thing I wanted to ask you about. In your report you said that the Lobbying Act provides you with the power to grant exemptions to the five-year prohibition if granting such an exemption would not be contrary to the spirit of the Lobbying Act. To date you've received 16 applications and have granted only three, based on exceptional circumstances. What would be an exceptional circumstance, and why would you grant exemptions?

    For the three exemptions that I have granted to date, two of them were for very short periods of time, and in the other case the person had done it on an interim basis. The employer was not going to gain unfair advantage. In the last case, the individual had been an assistant deputy minister who left prior to that five-year grace period that was given to assistant deputy ministers.

    I'm done. Thank you.

    Thank you very much, Ms. Davidson.

    Madam Freeman, vous avez cinq minutes.

    Thank you.

    Ms. Shepherd, I have to tell you, to begin with, that in looking for information, I dealt with one of your staff. I think his name was René Leblanc. He was extremely professional and conscientious. I would like to acknowledge the outstanding work of your deputy.

    I will ask my questions. I know that you have to work with the Conflict of Interest and Ethics Commissioner, Mary Dawson, on a very frequent basis, because there is a lot of overlap between ethics and lobbying. In September, when Ms. Dawson tabled her report, she recommended that the values and ethics code for the public service, which applies to members of the House of Commons, be tightened by adding barriers between MPs and the lobbyists they might meet at political fundraisers.

    Do you agree with Ms. Dawson? And what should be done, in your opinion?

    First, I would like to mention that I am often called upon to work with Ms. Dawson. However, we have two separate mandates. So we do not work together. We may work on the same cases, she from the minister's standpoint, and I from the lobbyist's.

    After tabling her report, she suggested that the rules governing values and ethics in the House of Commons should be strengthened by adding barriers between MPs and the lobbyists they might meet at political fundraisers. That is what Ms. Dawson said when she tabled her report. So that was her opinion.

    I would like to know if you share that opinion.

    Lobbyists have to comply with the act, but they also have to follow the Lobbyists' Code of Conduct. Rule 8 deals with conflicts of interest.

    Allow me to express myself in English.

    Of course. I know it is quite an intense meeting.

     Rule 8 indicates that a lobbyist shall not place a public office holder in a conflict of interest by taking on any activities that would cause or suggest improper influence.

    There was a court case, which was Democracy Watch v. Barry Campbell. And in the court case it said the previous guidance that had been given on the rule was unreasonable. They declared that basically it wasn't just a real conflict of interest but a potential conflict of interest.

     So I have issued guidance that a lobbyist needs to be mindful of in terms of advancing the private interest of the public office holder and causing a tension with the public office holder's duty to serve the public good and the private interest. I have indicated that something like organizing a fundraising event for a public office holder is advancing, arguably, the interest of a public office holder. If the individual was then to be lobbying, there would be the potential for a conflict there. So I would see a fundraising event as being very much something a lobbyist would have to be mindful of in terms of participation.

    Madame Freeman.

    Unless I am mistaken, you share Ms. Dawson's opinion that the ethical rules for members of the House of Commons should be strengthened by putting actual barriers between MPs and lobbyists at fundraising events?

    She is interested in the minister's side of things. But I can honestly say that in principle, yes, because if the public office holder asks a lobbyist to organize something, I will be looking at it from the other angle, and I will tell the lobbyist that he did participate.

    Okay, thank you. So you share her opinion in a way.

    Merci, Madame Freeman.

    We're going to go to Mr. Calandra for five minutes and then we will deal with Mr. Easter's motion before adjournment.

    Mr. Calandra.

    Thank you, Mr. Chair.

    Thank you. You've answered a lot of the questions I've had up to this point.

    I'm wondering about the industry itself. How has the industry itself responded to this? Are they also participating in educating themselves with respect to the new rules? Are they being cooperative? I know it's a bit of a change for them. If I'm not mistaken, you were a branch of Industry Canada before, so how has the industry itself reacted to this?

    Actually, it's a timely question in some respects. As I indicated in my annual report, I met with a number of lobbyists and found there was a desire by the lobbyists, especially those who were registered, to want to comply with the legislation. This year, to be honest, I opened up 16 administrative reviews, and 44% of them were actually voluntary disclosures of lobbyists coming forward and wanting to put something.... Well, they're recognizing, I guess, the act.

    When I say it's timely, I've just come back from doing a number of outreach activities with Mr. Bergen, and we had noticed in one of the sessions that the lobbyists had actually put “here's how you can be compliant with the legislation” and had walked through a number of the interpretation bulletins we had put up on the system and were educating other lobbyists. So there is that type of education going on. In the last month I've met with the Government Relations Institute of Canada, and I just came from meeting on Wednesday with the parliamentary public affairs group and association.

    I don't know if you've even asked, and I know it's not your mandate, whether the provinces or other jurisdictions have similar laws in place. And are there any changes that you could suggest? I know you've been at this now for a bit. Are there any changes you could suggest that would improve on what we have already?

    I'm also wondering about your referrals. Once you start an investigation, and when you do refer, what is the level of participation, for instance, you are getting from the RCMP or the law enforcement agencies with respect to the speed at which they work with you?

     On that last question on the Royal Canadian Mounted Police, I've been finding the cooperation to be very positive, and there's been interest in terms of coming back to the office to ask questions on the cases and files. They've also been very complimentary about the work that the investigators are doing in terms of sending over very detailed and comprehensive files, so I would say it's positive in that aspect.

    Your first question, again, was in terms of the...?

    It was on the other jurisdictions, and if there are specific--

    There are seven provinces that have lobbying legislation, and they vary. Some have lobbyists' codes of conduct, for example. When we talk about the significant amount of time, it's been interpreted in some jurisdictions through interpretation bulletins. Some legislations actually have it in their legislation. Some of my colleagues at the provincial level have the ability to administer monetary penalties, which is something that I don't have. If I see a breach of the act, I can refer it to Parliament. If I've done an investigation on a breach of the code, I table a report to Parliament.

    That's one of the things for when the act is up for review. One of the things I've been working on over the last five years--because it will be a five-year review--is to bring up a number of issues that I think Parliament and the committee will want to explore.

    With respect to some of the new rules that we've brought in and the increased traffic to members of Parliament and senators, and even working with the office of the leader of the opposition, are you seeing easier cooperation and a fuller understanding from everybody, particularly the OLO and members of Parliament?

    In terms of the recent changes that I think you are talking about, it hasn't been quite a month yet of seeing how many communications entries have actually started coming in in terms of meetings with members of Parliament and senators. How that's changed in terms of cooperation is something I wouldn't mind addressing the next time I'm back in front of the committee, but I'm expecting members to be cooperative.

    Thank you very much, Mr. Calandra.

    That concludes the time.

    On behalf of all members of the committee, I want to thank you very much, Mrs. Shepherd, for your appearance. I'm going to ask you if you have any closing comments or remarks you want to make, and then we will go to Mr. Easter's motion. You don't have to stay around if you do not want to.

    Do you have any closing comments you want to make to the committee?

    I have no additional comments. It's always a pleasure to come before committee. As I said before, it's coming to speak to the boss, so to speak, so I welcome the comments and the feedback.

    Again, we want to thank you for all your work and for your appearance here today.

    We are now going to proceed with Mr. Easter's motion.

    Go ahead, Madame Freeman.

    When will Ms. Shepherd be coming back and providing us with the information we requested?

    No, that would be entirely up to the committee. It would be brought up at the steering committee; they schedule a meeting, and that would be up to the committee.

    Mr. Easter, you were the mover of this motion. I'll give you first opportunity to speak. I'd ask for Mr. Easter and any other interventions to be as brief as possible.

     The motion is that the committee requests that Nigel Wright provide it with copies of any agreements with Onex Corporation for him to return from temporary leave to the corporation.

    I'd like to talk a little on that section of the motion first, Mr. Chair. It has been in the public domain that Mr. Wright would be returning to Onex within 18 to 24 months, so it seems to be a temporary leave. I think it's interesting that today we talked with the lobbying commissioner, just in the last discussion, about real conflicts of interest or potential conflicts of interest. I think when you're looking at Mr. Wright, who is going to be chief of staff to the Prime Minister, one of the most powerful positions in the land, with access to all the information within the realms of government, that he's only really on a temporary leave.

    When we look at ourselves and what Ms. Shepherd put in the Lobbying Act, just to quote from that: “As a result, you”--meaning us--“will not be able to work as a consultant lobbyist nor be employed to lobby on behalf of a not-for-profit organization when you leave office.” That's the restriction on us. Yet Mr. Wright is going to be in the most powerful position in the land. He's only on temporary leave, and there is certainly a perceived conflict of interest.

    The other part of the motion is that the committee also requests that Nigel Wright provide copies of any recusal conditions that he has agreed to abide by as chief of staff to the Prime Minister to ensure that he is not in conflict of interest, and that the information be provided to the committee within five days.

    Mr. Chair, I just want to put on the record why we see a perceived conflict of interest here and why we do need the documents to see how this individual is going to be able to do his job.

    He is personally a director of Hawker Beechcraft. He is connected through Onex to a number of other corporations: the Center for Diagnostic Imaging, Emergency Medical Services, Husky Injection Molding Systems, ResCare, Skilled Healthcare Group, Spirit AeroSystems, Allison Transmission, Carestream Health, The Warranty Group, Tube City IMS, RSI Home Products, and Tropicana Las Vegas. Now that's a tremendously wide-ranging group of companies that has a lot of influence.

    So in our estimation, if Mr. Wright is going to be able to prevent that potential conflict of interest, then he would have to recuse himself, on the surface, it looks like, from the following departments: Industry, Health, Finance, Treasury Board, Defence, International Trade, Canada Revenue Agency, DFAIT, Public Works, and Transport Canada.

    On the surface it looks as if there are real problems here. So we're moving this motion because we do believe that we need the documentation to show the arrangement with Onex Corporation on his temporary leave and certainly copies of the recusal conditions he has agreed to abide by as chief of staff to the Prime Minister so he is not in a conflict of interest.

    Thank you, Mr. Easter.

    Mr. Calandra.

     Obviously we read the motion, and we know that Mr. Wright, of course, is a very accomplished Canadian from Burlington, who has accomplished extraordinary things for Canada and is now prepared to come to serve his country in another format as chief of staff to the Prime Minister. I would hope that in the past some of the previous chiefs of staff to prime ministers also had some of the astounding credentials of Mr. Wright. I am unaware of our having brought their particular agreements before committee.

    I note that the Standing Committee on Government Operations and Estimates was seized with investigating, for a time, an elected member of Parliament who was potentially lobbying. I will reference the motion adopted:

    I recall, if I'm not mistaken, that the member of Parliament for Scarborough—Guildwood and another member, who I can't remember, gave very long dissertations as to why the particular study was out of order.

    The member of Parliament himself suggested that he had actually approached the Conflict of Interest and Ethics Commissioner and had sought her advice with respect to the contractual obligations he had with this company and that, as a result, he did not feel he needed to turn over the particular contract because he'd actually received the approval of the Ethics Commissioner at the time.

    Let me see if I can quote from that meeting. The latter appeared at committee on Thursday, May 27, where he quoted from a response by Sun & Partners, but he did not provide the documentation the committee had actually asked him to provide because he'd gone to the Ethics Commissioner and she had provided—

    Do you want to just deal with the motion?

    I want to point out that this committee is not going to get into the qualifications of Mr. Wright. That was determined by the Prime Minister and the selection process. The motion is specific. If you have something on the specific motion, perhaps we'll ask you to conclude.

     Thank you, Mr. Chair.

    I note that we had talked to the government operations and estimate committee, and part of their representation from the Liberal members at the time was that it actually should go in front of the procedure and House affairs committee.

    I know that when Ms. Dawson was in front of the procedure and House affairs committee, she said:

    I would suggest, Mr. Chair, that we know Mr. Wright has actually spoken with the Conflict of Interest Commissioner, and she has reviewed everything—similar to Mr. Lee—and has given her approval of the terms by which Mr. Wright will be working as the chief of staff to the Prime Minister. And they will work closely together, as we do.

    I don't think we need to talk about this. We don't need to bring this forward. But if we do, I'd perhaps provide a friendly amendment that if in this instance we deem it to be important, we consider calling Derek Lee back before this committee and we investigate the terms of his contract with silent partners. It's clear to me that the Liberals have changed their mind with respect to that.

    I wonder if Mr. Easter would accept that as a friendly amendment.

    An hon. member: I'm sure he will.

    Mr. Paul Calandra: And I'm sure he will, given his support of the motion.

    Mr. Calandra, I'm going to rule that amendment out of order. It really does not relate to the motion.

    If you want to move a separate motion, you can do so at your own pleasure, but that would not relate to the motion that's before us.

    Mr. Siksay.

    Thank you, Mr. Chair.

     I just want to say that I'm supporting Mr. Easter's motion. I think this is a very particular and important case, somebody who is working in a very sensitive and important office in the country, who we know, as Mr. Easter has outlined, has had extensive and continuing business interests. That is of concern to Canadians. I think this is an opportunity for transparency.

    Given the list that Mr. Easter read out, Mr. Wright might not have to recuse himself from decisions about the menu in the parliamentary restaurant. It sure seems like it's a pretty extensive list, otherwise, of necessary recusals.

     I think it's very important that we look into this. I will be supporting the motion.

    We'll hear from Mr. Poilievre, then we'll put the question, colleagues, and then we can call it a day.

    Mr. Poilievre.

     Yes. Thank you very much, Mr. Chair.

    I appreciate the opposition's role here in scrutinizing the government. I think they would appreciate as well that we're all best served when we attract highly qualified people to serve in personnel roles, leadership. We have here, by Mr. Easter's own description, someone who has a breadth and depth of experience that is possibly unmatched by any potential candidate for this job. We think that he's very well suited for it, not in spite of but because of this breadth and depth of experience. Certainly Mr. Wright has been hailed by anybody who knows him and by some extremely credible Canadian champions of business achievement as one of the great leaders in his field. Mr. Easter's listing of his professional background serves not to contradict but rather to confirm those endorsements.

    That said, the opposition is seeking to scrutinize him, and that's fine. I would only ask that we do so in a fair and reasonable manner and that we give him a chance to explain his arrangements and how they will impact on his future and justify how he plans to conduct himself in the Prime Minister's Office, and that he answer questions by members of this committee, of which I know he is more than capable.

    As such, I would seek that we reorder the sequence of demands that we're seeking of Mr. Wright in the following way. I would simply suggest that we call him, first, to appear before the committee and that we call him before November 8, at which time he becomes a staff member and therefore would not be eligible to appear before committee, given that the convention of Parliament provides that staff members do not speak in these settings but rather ministers speak on behalf of their entire ministries. But if we do call him before November 8, when he takes office, there will be no breach of that longstanding convention.

    As such, I would propose what I genuinely believe is a friendly amendment, which is that we call Mr. Wright to appear before the committee before November 8 and that this committee make the time available for him to appear between now and then to answer any and all questions about his past, present, and future work. That amendment would replace the wording of the existing motion, though it does not change in any way the essential goal, I believe, that my colleague Mr. Easter seeks to achieve. The way I see it is that Mr. Easter and the opposition are seeking to have questions answered about his past, present, and future work. They can ask any of those questions of Mr. Wright when he's here. If they are not satiated by the answers they receive, more demands can be issued at that time. This motion could very easily be reintroduced in its present wording the very next day, and we could proceed on the basis of the existing wording at that time.

     Surely, Mr. Chair, no harm could be caused from simply hearing from the man before we ask him to turn over what could essentially be documentation that could be either unnecessary or unfair to seek. Again, we could hear from him. The opposition members could very easily, at that point in time, conclude that they have not been satisfied and that they seek more. At that time, a motion could be put forward to secure more.

    I believe that this committee seeks to operate with a fair-minded temperament. The way to do that would be to simply ask the gentleman to come here and speak for himself and defend himself in a public setting before he becomes a staffer. Let's see what he has to say.

    The opposition might be pleasantly surprised by what they see. I think they will be. I think they'll find him to be highly qualified for the position and also to be a man of tremendous and unimpeachable integrity.

    I will propose that amendment, Mr. Chair, and I look forward to having it voted upon.

    It's relevant.

    I'm going to ask Mr. Easter for his comments on that. Before I do so, I just want to make it absolutely clear that this committee is the access to information, privacy and ethics committee. It's not to deal with Mr. Wright's qualifications or how he got the job or his ability to do the job. The only issue, if he does come before the committee, will be the issue of real or perceived conflict of interest. It's not like the congressional hearings they have in the States. That's not our job.

    Mr. Easter, do you have any thoughts on this?

    Yes, Mr. Chair.

     I would be strongly opposed to the amendment. At some point in time we might want to hear from Mr. Wright, but at the moment, what we need, which the motion is very specific about, is the agreement with Onex on whether it is really a temporary leave of absence and the copy of the recusal conditions that would, I think, spell out for us whether there is a perceived conflict of interest.

    Nobody is arguing the fact that this man is not qualified. But what's in the public domain at the moment in fact,is the untendered contract for $16 billion worth of aircraft, which one of the companies Mr. Wright is connected with is connected to. The contract's not signed yet. He's going to be here for the signing of that contract. How is he going to deal with those things?

    The other point I want to make very clear, Mr. Chairman, is that we do not concede the right to hear from Mr. Wright after he is staff in the Prime Minister's Office. Mr. Poilievre tried to make the argument that there has been a precedent set here. No, there has not been. There is another committee looking at that issue now. In fact, we had the chief of staff to the current Prime Minister before this committee at one point in time, until the government changed its approach, which we believe is against the rights of Parliament. We've turned it over to another committee to investigate that matter.

    I would oppose the amendment on the basis that it changes the intent. What we're looking at here is documentation in the first instance so that we can make a determination from there on whether we ought to call Mr. Wright at a later time, either before or after he is staff in the Prime Minister's Office.

    You have your name down, Mr. Calandra. Do you want to speak? Then we'll call the question.

    Thank you, Mr. Chair.

    Again, what we've asking here is for Mr. Wright to provide some documentation that he worked closely with the Conflict of Interest and Ethics Commissioner. The fact is, Mr. Chair, with respect to this current motion, we know that he sought and he followed, and will continue to seek and follow, the direction of the Conflict of Interest and Ethics Commissioner. We know that Mr. Wright will respect all of the rules that are in place to ensure that there is no conflict of interest or even the appearance of conflict of interest.

    Relating back to the previous discussion with respect to the Liberal member of Parliament for Scarborough—Rouge River, Mr. Lee, the Liberals, at that point, were suggesting that since the Liberal member for Scarborough—Rouge River had gone to the Conflict of Interest and Ethics Commissioner first and had sought her advice with respect to his contract with Sun & Partners and the fact that he had been listed on their website as being a lobbyist and was somebody who was going to provide information on how to get and award contracts with the Government of Canada and so on and so forth--as I read into the record a bit earlier--he was not required to then turn over any of the documentation that he had given to the Conflict of Interest and Ethics Commissioner and he was not required to turn over the contract that he had with Sun & Partners.

    It strikes me that the Standing Committee on Government Operations and Estimates has already ruled on this particular type of request. Now we're a couple of months later and again we see the Liberals flip-flopping with respect to how they perceive government to work. We don't want to talk about all of the other many flip-flops that we get from them, but on this particular notice we know that--

    Is it a point of order?

    I am sorry, I have another commitment, and I would like to ask that the meeting be adjourned because it is past 5:30. I have to go, I am very sorry. Can we deal with this next week?

    I will take that as a motion to adjourn that was made by Madam Freeman. That's not debatable.

    (Motion agreed to)

    The Chair: The motion is carried and therefore the meeting is adjourned.