:
Thank you very much for this opportunity to testify on one of the most important democratic good government laws that exists in any country, including in Canada, namely the Conflict of Interest Act. I welcome this opportunity, slightly overdue, for this five-year review of the act.
First, just to anticipate questions that I usually get when I appear before a committee, and so we don't have to spend time answering them later, I'm here as a representative of the Government Ethics Coalition. It's a coalition made up of just a bit more than 30 organizations from across the country. The total membership of the organizations is over three million Canadians. We've been working together as a coalition now for more than a decade pushing for changes both to ethics rules and lobbying rules. As some of you will likely remember, I was here almost exactly a year ago testifying on the Lobbying Act.
As with the Lobbying Act, I see that the committee and the government has a simple choice. We're recommending 30 changes to the act. You will not have received my brief. Essentially I took a bit longer with the brief because I wanted to review the Ethics Commissioner's report, which was not short. I just got the brief in to the clerk yesterday, but you will receive it soon. You'll see that I and the coalition address in the brief not just the act but also the MP's code and the senator's code and also related laws like the Lobbying Act because they are all interrelated in terms of setting standards and enforcement systems to ensure democratic ethical good government.
The simple choice in terms of the committee making recommendations and the government making changes is either to make what the coalition sets out as 30 much needed changes to the act and the codes and another 14 changes to the related laws, or leave loopholes open and enforcement weak and ineffective, which essentially allows for unethical decision-making and unethical relations mainly with lobbyists by everyone involved in federal politics. Even the Ethics Commissioner, who has been mostly, from our perspective, an ineffective lapdog for the past five and a half years, has made 75 recommendations for changes to the act, most of them to strengthen the act, a few to weaken it.
I think there's a general consensus that the act is a bad joke. The act and the MP and senator ethics rules are so full of loopholes they should really be called the “almost impossible to be in a conflict of interest rules”. Even worse, the rules don't apply to some cabinet appointees, some ministerial staff and advisers, nor do they apply to the staff and the advisers of MPs and senators. So there are lots of people in federal politics who have no ethics rules that they have to follow at all.
The Ethics Commissioner's recommendations, 75 of them, didn't even address the two biggest loopholes in the act. Because of these huge loopholes, which also exist in the MP's code and senator's code, the act and the codes do not apply to 99% of the decisions and actions of the people covered by the act and codes. You currently have a law and codes that only apply to 1% of what people do who are covered by those codes. I'll talk about that a bit further.
The ethics rules that federal politicians have imposed on public servants through the values and ethics code of the Treasury Board and the conflict of interest policy do not contain most of the loopholes and flaws that are in the rules for politicians and their staff and cabinet appointees, so they're much stronger. Also, the has set an accountability guide for ministers that does not contain these loopholes. The MP's code and the senator's code have principles and purpose sections that are unenforceable, but if they were made enforceable most of the loopholes and flaws would be actually closed and we'd have meaningful ethical standards that would apply to 100% of what people do, not 1%.
An overall easy fix to the act and the codes would be just to take these rules from the public servants' codes, which politicians have imposed on them, and impose them on yourselves. Make these enforceable rules. In other words, the standards are already there, and they're in print; they're just not enforceable and not applicable to everybody.
There are also many enforcement problems. The cases of dozens of cabinet ministers and MPs being let off the hook with no penalty since 2007, along with many others who have escaped accountability for unethical behaviour in the past decades, show just how much the federal ethics rules and enforcement system are an ongoing bad joke. In the past 20 years, about 50 cabinet ministers have violated federal ethics rules, and only two have been penalized in any way: they were kicked out of cabinet. That's not a great enforcement record.
The Ethics Commissioner is a major part of the problem with ethics enforcement. Since 2007, she has rejected at least 80 complaints filed with her without issuing a public ruling. There could be more, because she didn't even disclose the total number of complaints she received in 2008-09 or in 2010-11. There is a total of 100 situations that she mentions in her annual reports, and she has issued 17 rulings, but that means there are 83 secret rulings at least. We don't even know how much she might have covered up, and there's good reason to suspect that she has covered up some cases, as she has repeatedly interpreted and applied the act and codes in very narrow, bizarre, and legally incorrect ways since 2007 and has let dozens of people off the hook.
A lot of the Ethics Commissioner's recommendations don't really have to be implemented. All that has to happen is for her to reverse her bizarre rulings and start enforcing the act and codes properly, legally, correctly, and in the spirit of the act and the codes. The real intent is to prohibit anyone from making a decision or undertaking any action if they're in any type of conflict of interest, real, potential, or apparent.
However, because of these loopholes and flaws, because the government has ignored recommendations over the past five years from the Ethics Commissioner and from others, including the Oliphant commission, and because the Ethics Commissioner shows no signs that she will reverse any of her bizarre rulings, there are 30 changes needed to the act and the codes, and another 14 changes, to actually clean up federal politics after the more than 145 years since Canada became a country.
There are no valid excuses for failing to close the loopholes and strengthen enforcement. It's really just a choice. If you as a committee don't recommend closing these loopholes and strengthening enforcement, you'll essentially be confirming that you think unethical decision-making and unethical relations by everyone in federal politics is just fine.
You face the same choice that past committees have faced. None of the committees has made the recommendations, and governments haven't made the changes, even though both the Chrétien and the Harper governments promised ethical decision-making and relations in federal politics. This is the 10th time that I've testified in the past 20 years. I'm hoping finally that it will have some effect and that we will finally get these changes that will make corruption effectively illegal.
We should be trying to match not just the standards that the Supreme Court of Canada has set out in several rulings but also those of the UN, the OECD, the World Bank, and the IMF. Every international institution says that if you don't have a democratic good government in which unethical decisions and relations are prohibited, you do not have democracy.
Therefore, I appeal to you to think about yourselves, to look in the mirror or look at your kids and your grandkids, and to think about whether you want to tell them in the future that you had an opportunity to push to close loopholes to end unethical decisions and relations in federal politics but that you did nothing.
Hopefully you will do something, as you did with the Lobbying Act. I think the committee made a good try. The minister rejected most of them. There were some loopholes the committee didn't address, but it was definitely a step forward, and hopefully the minister will respond more favourably in the future.
I will turn to the recommendations of the coalition.
First, as I mentioned already, ensure that everyone is covered by ethics rules. Some people are not, currently, but everyone should be, including the MPs' and senators' staff and advisers. We need to extend the codes to cover them.
Second, enact a general ethics integrity rule, essentially an anti-avoidance rule, such that if someone tried to exploit a technical loophole, they would not be able to but would still be found to be guilty for not maintaining high ethical standards and acting in a way that shows integrity. This rule already exists for public servants, so apply it to everybody else.
Third, enact an honesty in politics rule that everyone is required to comply with at all times. This rule already exists for public servants. It's also set out in the accountability guide for ministers and in the MPs' code in the principles section, so just apply it to everybody and make it enforceable. To paraphrase Gandhi, a lie for a lie will make the whole world dumb. As long as we allow lying in federal politics, we're going to continue turning off most voters. It's the number one hot button issue that Canadians want accountability for. Again, it's already in the rules; just make the rule enforceable.
Fourth, enact a rule prohibiting everyone from being in an apparent or foreseeable potential conflict of interest. Again, this rule already exists for all public servants, except the most senior people, who are covered by the act. This rule is in place for B.C. politicians in their act. It's also, again, set out in the principles in the accountability guide for ministers, in the MPs' code, and in the senators' code. Just make it enforceable. There has to be an apparent conflict of interest standard in force.
The huge loophole that exists in the act and in the MPs' and senators' codes is that you cannot be in a conflict of interest if you are dealing with a matter of general application. Ninety-nine per cent of what you do involves matters of general application. This loophole has to be eliminated, or the act and the codes will continue to apply to only 1% of what federal politicians, their staff, cabinet appointees, and advisers do. There's no reason to have that law if it's only going to apply to 1%.
:
Thank you. I'm going to be a little bit more general in my comments.
We're talking today about the Conflict of Interest Act applying to ministers, parliamentary secretaries, ministerial staff, ministerial advisers, deputy ministers, and other Governor in Council appointees. There is, as you know, also a code for members that would also apply to ministers simultaneously, but we're dealing just with the Conflict of Interest Act today.
In a general sense I would say that most of my work on this has been in a comparative context. I can say that in terms of conflict of interest legislation and codes that apply in countries that we normally compare ourselves to, the code that we have sort of looks like everybody else's in the sense that we have rules against similar things, and we have rules encouraging similar things. Our legislation has a lengthy section on what happens when you make the transition from public life to private life. There are different rules about cooling-off periods and what you're not allowed to do and whom you're not allowed to work for. It looks in a general sense like what the U.S. does, what Australia does, what the U.K. does, what we do in the provinces.
What you see in terms of differences between the legislation is there might be differences in punishments for failure to comply. There might be different reporting requirements. There might be different lengths of time in terms of cooling-off periods. But essentially the thrust of it is relatively similar. We deal with switching sides. We deal with the inappropriate use of information. We communicate that it's wrong to use the information you got in your public office once you come out to the private sector. All of those major things are there.
I wouldn't say that if we compare ours to other similar pieces of legislation, there's any glaring omission. There's not some huge area I can see that other jurisdictions deal with that we don't. In the other direction, I would say there's nothing really we're doing that we're the innovators for, that others aren't doing right. Our legislation seems to be relatively consistent with a group of countries that we normally compare ourselves to.
But there are differences in terms of the pieces of legislation in the area, if you look at them. It seems to me that regardless of how the code is worded and exactly how it's structured and that sort of thing, generally these things have similar objectives. Sometimes you see a legislature move to create this kind of code because they want to be consistent with other legislatures, because they want to make sure they're covering this off. Oftentimes these things come about when there's a specific trigger event or problem, that sort of immediate thing you want to show you're responding to.
But whatever it is, generally a code of ethics comes forward as a piece of communication. It's a tool to communicate. It's a tool to communicate standards to the people who are under the code. In this case it's something to communicate ethical standards and expectations to public office holders. It's also a tool to communicate to the public.
What people hope when we create these codes is that the people who are working under the code, the people who have to abide by the code, get a sense of what they're supposed to do. That's first and foremost. When we have this piece of legislation come into place, I'm guessing that the people who come under the piece of legislation want to be able to look to it and figure out what they're supposed to do, because what you don't want to do is find out you're on the wrong side of it. What you want it to do is create a common set of assumptions and understandings about what's acceptable and what's not. You want to have a clear idea of how you're supposed to be compliant with this thing, because most people are going to look at it and just not want to have any problems come from it. They want the instructions to be clear so they can do what they have to do, disclose what they have to disclose, and move on with their lives.
If you don't have a code like this, the information that we have from other jurisdictions seems to suggest that MPs and public office holders will have very different assumptions about what's ethical and what's not. If you can imagine not having a code at all and you went around to every MP and asked what they thought was an acceptable value of a gift to accept, or what they thought was acceptable in terms of disclosing assets, liabilities, that kind of thing, they would have very different ideas about those things. That means if you don't have a code, everybody is doing something different. If you have a code and everybody understands it and it's enforced reasonably well, then it means everybody is working under the same set of assumptions. Everyone is toeing the same line in terms of what we expect.
If everybody understands what's expected of them and everyone can sort of agree that it's reasonable, then probably over a period of time you will get a culture of acceptance of what the code is about. You're more likely to get compliance that way, because people get it. They think it's reasonable. People see that's what everybody else is doing, so they want to do the same thing so they're not the exception to the rule. It's much easier to get voluntary compliance if it comes across as reasonable and if everybody understands it. That doesn't necessarily mean the penalties have to be terrible. You should understand what's expected of you. That's the communication to public office holders, MPs, etc.
As for communication to the public, normally when these things are passed, whether as legislation or as part of the Standing Orders or whatever, legislators want members of the public to think that things are being run ethically. In the Canadian context, we don't want people at home to think that everything that happens on Parliament Hill is corrupt, and every time an MP meets with a lobbyist there's something miserable going on. We use these things to tell the voters that we're mindful of ethical standards all the time, and that there's a right way and a wrong way to do things, and that we're doing things the right way.
Finally, usually these codes have some sort of mechanism of compliance and penalty if you do something wrong, which is another way of communicating to the public that we take ethics seriously and that people who violate these rules will be punished.
Sometimes there can be a problem in the sense that the objectives of the code can come to be at odds with one another. In trying to encourage ethical behaviour, in trying to encourage compliance, in the process of trying to expose any kind of wrongdoing that's happening and punishing someone, all of which are totally defensible goals, sometimes the transparency can encourage the public to think there is actually a lot of wrongdoing when in fact there is not. If the media really have a lot to focus on and there are a number of investigations, and a number of times somebody is penalized $500 because they didn't disclose on time, then there's lots of fodder to start saying that all these things are going wrong and ethics is really a problem, when that might not be the case. It might not be that behaviour has really changed much at all; it's just that this is how the code works and it's exposing things.
In order to avoid that kind of a problem, I would say that we want to have the right balance between rules and principles. Generally the codes will fall on a kind of rules versus principles continuum in the sense that some codes—and you'll see these in the corporate world too—are very principle oriented. The language is very aspirational. The code talks about what we want and what you should do: MPs should uphold the highest ethical standards; it's all about what you should do and how you should look and what it means to be ethical. That's generally what the principles look like.
The rules tend to focus on what it means to be doing something wrong: the code prohibits this; you'll be penalized $500 if you do this. The language tends to be sort of negative, because that's the way rules and laws are. You focus on the things you're not supposed to do, and then you outline the penalties for doing them.
I think you want to get the right balance between those two things so that the principles are there, but then at the same time the rules are there to give some sort of clarity to the principles so that MPs and other people under the code know what they're supposed to do.
I read Commissioner Dawson's report as well. I can see that she has made a number of recommendations, many of which are very specific on the basis of her years of experience with the code and problems that she has run into. It seems to me that in some cases there are discrepancies between her mandate and the objectives of the code on one hand and her ability to get information and see what's really going on on the other hand. I think she is trying to close those gaps in some cases. She spends a lot of time talking about the idea of gifts and advantages and how MPs and ministers are supposed to deal with those.
In terms of closing loopholes, in terms of lowering the threshold for disclosure of a gift to $30 instead of $200, you can do a lot of that. Every time you review this code, every five years, you can probably come up with another huge list of things that you can penalize, or that you can address, or that you can create a mechanism to do something about.
You can do that over and over and over again, but it's not going to stop. Every time you review, there is going to be another area of behaviour that will come to your attention that you can make rules about. You can't do it exhaustively. If you focus too much on the rules and not so much on the principles, it doesn't encourage MPs and other people to use the kind of common sense approach which would probably eliminate a lot of these problems.
I would hope to see that whatever goes forward would be a balance between rules and principles, so you don't go too far off in one direction.
:
I apologize, but my French would have to be better; and so I am going to reply to you in English.
[English]
One thing the Ethics Commissioner has recommended, and I'll say generally that we agree with all of the Ethics Commissioner's recommendations and you'll see the ones that the coalition takes exception to in the brief. Essentially, it's worded very clearly saying to not do what the Ethics Commissioner has recommended. There are only a few of them. One is in the disclosure of assets. The Ethics Commissioner is saying to weaken that for some types of public office holders, and in fact, disclosure of assets should be increased.
There are a couple of assets that are actually exempt now. They do not have to be divested from. They are investment vehicles, like mutual funds, where you are investing in companies. You don't have to divest from those even though you would know that you own shares in companies.
She's saying not to increase the divestment standards and actually reduce the divestment standards for certain public office holders covered by the act. It should go the other way. The disclosure of assets should be reduced from $10,000 to $1,000 and the divestment requirements should actually be increased.
The other big one is where she is saying to make the conflict of interest screens that she currently uses legal. They are currently illegal. My position is that the Ethics Commissioner is violating the act by using conflict of interest screens. What she is doing with public office holders is saying, “Tell me the area in which you're in a conflict, and then we'll set up a screen and you will not have to disclose your recusals for every decision-making process that you recuse yourself from.” She's saying the screen means that you don't have to disclose recusals, but the act says that recusals have to be disclosed. The screen is not anywhere in the act. It's not legal. I think it's an illegal scheme that's hiding recusals.
There are two loopholes that she doesn't address, the big ones. She's not saying to eliminate the general application loophole. I could call it the Nigel Wright loophole, but it applies to everybody.
If you read Nigel Wright's conflict of interest screen, for example, it says that he will recuse himself from all matters, but he's not going to notify the public when, to do with his financial holdings, except matters of general application. About 99% of what he deals with and what every cabinet minister, MP and senator deals with, are matters of general application. For example, there isn't a Royal Bank act; there's a Bank Act, and it's a matter of general application. This loophole which the Ethics Commissioner does not address means that the act doesn't apply to 99% of what all of you do, which makes it pretty useless. It's almost impossible to be in a conflict of interest. The finance minister can own $1 million in shares in every bank and still make the changes to the Bank Act because you cannot be in a conflict of interest when you're dealing with a matter of general application. If that loophole is not eliminated, it doesn't really matter what else you do in terms of the conflict of interest rules.
The gift rules and things like that are separate. The conflict of interest rules do not apply to 99% of what you do.
The rules in the U.S., for instance, are similar in terms of the overall objectives of what they're trying to do. They have a different approach in the sense that they get virtually an entirely new public service when there is a new president, so the applicability of the rules is different.
One thing I can remember the U.S. does a little more clearly than we do has to do with the offer of outside employment. For instance, if you're currently working in the government in the United States and you get an offer of employment, you have to keep the ethics office informed of this until you close it down, until you actually give a definitive no.
I can see different instances where that might be a little bit of overkill and there would not necessarily be a need to know that a particular person might be considering a job somewhere else, but in some cases, it would be useful to know, especially in the context of a political appointment. You serve at the pleasure of the minister and you could go at any time, and you have an outside offer that's lingering and that could be attached to something going on in the minister's office. There is some reason the organization wants you to work for them. In our system we have to disclose offers of employment, but in the United States they actually have to keep the ethics officer informed until a firm no is given and the offer is no longer on the table.
It's something to consider. Whether you think it's better or worse, it's more information, more disclosure, but it does, perhaps, facilitate more communication between public office holders and the commissioner.
:
I'd like to continue on that theme, Ms. Turnbull.
Those of us sitting at this end of the table may not necessarily agree with that last statement. You, as one of our constituents, might say that you don't make your decision based on what's written in the newspaper. Unfortunately, for many of us around this table, we stress a lot about our reputations and about the value we place on them and the integrity that we uphold.
When I look across the House, I see people of integrity in all parties. I don't look across and see corrupt folks. Unfortunately, I'm not sure that's how the newspapers present what happens in Parliament, oftentimes. I believe there needs to be the same protection for politicians that somebody in the medical community might expect or that somebody within certain professions might expect when false allegations come forward.
My concern is that as a politician, the only thing I have that I can take to the people.... I have to fight for my job every four years. I have to re-apply for it. If an activity has been alleged and it is entirely untrue, it may impact upon my ability to continue with my job.
In the case of the medical community, there are significant amounts of protection to ensure that professional credentials are protected until such time as there's a determination as to whether the allegation is true or not.
I wonder whether you have some thoughts with respect to how we might protect people of integrity against whom false allegations have been brought. How might the office undertake its responsibility to maintain integrity and ensure that this happens, but also, as Mr. Conacher has talked about, ensure transparency for the general population as well?
We're caught in a conflict. We want to be transparent with all this process, but we also have to think about protecting the reputations of people whose entire livelihood depends upon their reputations.