:
Thank you very much, Mr. Chair.
I would like to begin by thanking the committee for inviting me to appear today.
It has been a year and a half since my last appearance. This afternoon, the members of your committee and I will finally have the opportunity to exchange information and views.
The motion deals with issues of conflict of interest as they pertain to pandemic spending.
I have been the Conflict of Interest and Ethics Commissioner since January 2018. I applied for the position because I believed in it and wanted to play a role in helping improve the confidence Canadians have in their elected officials and public sector leaders. I still believe in it, even more so now that I have a full appreciation of the role and its potential.
[English]
Our mandate is twofold. Many members are new, so I will take the occasion to give you a brief overview.
We assist the House of Commons in managing the Conflict of Interest Code for Members of the House of Commons, which was adopted in 2004. We also do essentially the same work in relation to the Conflict of Interest Act, which dates back to 2007.
The purpose of the act is to set clear rules around conflicts of interest and post-employment activities for public office holders who may be either ministers, parliamentary secretaries, members of their staff or Governor in Council appointees. There are currently about 2,400 public office holders, of whom 1,300 are reporting public office holders, which means they have additional, more stringent obligations. Of those 1,300, 700 are staff members in ministers' offices.
The pandemic has had and will continue to have an impact on the work of our office because of the two high-profile investigations related to the Canada student service grant. As well, it has had an impact, as we will discuss in a few minutes, through the issue involving Mr. MacNaughton, which of course has generated some work as well. It was pandemic related. In relation to that file, I ended up making an order against nine senior officials involved in the matter, basically prohibiting them from talking to Mr. MacNaughton for the next year.
The workload of our office has increased very significantly in the past year, but it's not mostly because of these things; it's because of a significant rise in the number of exempt staff. There's been an increase of 65% over the last year in relation to people who work in ministers' offices. This is in addition to the 98 new members who were elected. These were new members compared to the legislature at the last general election. I think it's fair to say that new ministerial staff and new members require more support because they have to quickly familiarize themselves with a complex set of rules and provide a lot of information to us.
Upon appointment, under the act, all public office holders are provided information about their obligations, and a compliance process is undertaken. Essentially it's the same thing as you've done under the code. When they have completed the initial process, we analyze this information. We also make sure there is an annual review that takes place with each reporting public office holder each year. Throughout their term, public office holders must be vigilant about any recusals, any gifts of $200 or more or any material change to their situation, which they have to report to us in very short order.
Our role is not only to advise, to confirm exceptions or to explain requirements but also to engage in oversight activities to ensure compliance with the provisions set out in the act and the code as well. Our role is to guide members and senior officials individually, independently, thoroughly and consistently. That's where the lion's share of the office's resources is directed.
There was an important reduction in the advice given by our office in the first part of this fiscal year because of the shock caused to everyone's activities by the sudden onset of the pandemic. That's my diagnosis, at least. It has since picked up. I'm pleased to say that we anticipate a marked increase year over year. People come to us and seek advice. That's the way it should be. While I'm not hesitant to use the enforcement powers provided in the act, I believe compliance based on understanding one's obligations is always best.
For example, in the middle of the pandemic, in November, earlier this month, we organized an educational teleconference on the duty to recuse, because I sensed there may be a need for it. It's very important to be able to identify situations where one should recuse oneself. We had more registrants than we could accommodate on our Zoom licence. We had over 200 people who registered for this one-hour session on recusals.
I intend to do more in the future on subjects [Inaudible—Editor] return areas where it really matters that you understand your obligations.
Insofar as the pandemic is concerned, I've mentioned three related investigations, two of which have yet to be completed. We also had a few dozen requests for advice that have a link back to the pandemic. This is quite marginal.
In terms of post-employment—and we will talk about the MacNaughton file—there is a part of the act that applies. It's very short. It's 10 sections and it sets out basically that when you are a former public office holder, you have obligations, some of which are forever and some of which are limited for a period of one or two years after you've left.
I always invite people to read these provisions as they become public office holders, because they should prepare mentally to abide by them once they leave. However, it's very seldom that former officials seek advice from us.
They are prohibited from doing a number of things. I'm not here to give you an exhaustive list, because I don't have the time, but I think it's important to situate the MacNaughton matter to understand that Mr. MacNaughton, being a reporting public office holder, had left a while ago and basically engaged in some activities for which there were requirements in part 3 of the act, which he did not follow. He did violate certain aspects of his post-employment obligations and acknowledged, with the benefit of hindsight, that certain communications and meetings, to the extent that they could have furthered the interests of his new employer, Palantir Technologies, were contrary to section 33.
[Translation]
I bring up the issue of investigations because I know you understand that I have the authority to conduct investigations, whether under the act or the code. Usually this is as a result of a complaint made by a member of Parliament. I can also initiate investigations on my own initiative when information provides me with reasonable grounds to believe that a contravention has occurred.
I will skip a few parts, because I see that I may have already exceeded my time.
In terms of Mr. MacNaughton's file, rather than continuing to investigate a case where there was a clear issue and a number of contraventions, I decided instead to issue an order to prevent the recurrence of these events. As a result, nine public office holders were prohibited from having official dealings with Mr. MacNaughton. This ensured that the situation would not happen again. The order is available on our public registry.
Since I have been in office, for almost three years, our goal has been to complete the investigation reports within one year, barring extraordinary complications. Since my appointment, we have been able to meet this objective and have completed 18 reports under either the act or the code.
Interest varies depending on the person involved or the seriousness of the offences. This serves as an important educational component—
:
I think it's important in terms of objectivity, as you said, and in terms of expertise. It's a task that requires a certain expertise, and that expertise is acquired over many years.
It's good to have someone who does only that. It's good to have someone who is non-partisan, so he's going to treat every issue the same, whether it's a member of party x or party y—it doesn't matter when it comes to seeking the truth.
It is also important in terms of the public credibility of the whole process of dealing with conflicts of interest. It has to be someone who has peace of mind, who is appointed for seven years and who has tenure, so they cannot be easily removed. They must decide whether or not someone has breached the provisions of the act or the code, as that person often holds a very important position, such as the Prime Minister or a Deputy Minister.
For all these reasons, I think it is good to have an officer of Parliament in this area. In the past, as you may know, until 2007, there were predecessors, but they didn't have the same formal independence, legal independence in fact.
:
I will take my two and a half minutes.
I think it's very interesting that my Liberal colleagues are very much trying to get Mr. Dion to tell us that we should not do our investigations because of course it's their MPs who are under investigation. It's an old standard.
You said you're interested in the testimony. I would refer you to the testimony on July 22 of Mr. Bill Morneau. There were two fascinating points. One, I asked him if he'd ever read the Conflict of Interest Act, and he seemed very surprised. He said he'd been given a bunch of documents when he was first elected, so I'm surprised that there was no follow-up with him on conflict of interest. That was the point where he told the public, and you became aware of it for the first time, that he had received $40,000 in travel.
You have cleared Mr. Morneau. I understand that—well, actually, I don't understand that—but that's your decision, and I accept your decision. It's not so much that it's a gift but that it's the creation of a relationship with the Kielburgers.
On April 10, 2020—and I wrote to you on November 17 about this—Craig Kielburger wrote directly to Bill Morneau, asked about his family, wrote in a very familiar tone and 11 days later had a $12-million contract. I find that to be extraordinary.
Would you not agree that these kinds of relations, with people are being flown around and feted and gifted.... Mr. Morneau may have forgotten that it was $40,000, but it created a relationship that could have influenced his decision. I think that in light of section 7, the obligation not to show preferential treatment, that's an extraordinary amount of money to have been granted in a very short space of time.
:
Good afternoon, Mr. Chair. This is the first time we have had an opportunity to meet. Committee members,
bonjour.
I am very pleased to appear before you today to discuss the administration and enforcement of the Lobbying Act over the past several months.
As the Commissioner of Lobbying, I am accountable to Parliament. My mandate includes three areas of activity.
[Translation]
First, I must establish and maintain a registry of lobbyists. As the main tool for enabling transparency of lobbying activities, the registry provides Canadians with information about who is communicating with public officials and about what subjects.
On any given day, there are about 6,200 active lobbyists registered. Since February 2020, of the over 6,000 posted registrations, 1,757 were new. Since then, lobbyists have also provided details with respect to more than 21,000 arranged and oral communications.
When compared with the same period in 2018-19, it's clear that more communications are occurring in 2020. While health was the top subject registered and communicated in February, March and April 2020, economic development became the top subject in May and has remained so ever since.
To make it easier for Canadians to identify and track lobbying activities directly related to the pandemic, the office created an easy to access search feature of registrations for that topic. There are currently 640 such registrations.
Second, my mandate includes raising awareness of the Lobbying Act and the Lobbyists' Code of Conduct with lobbyists, public office holders and other stakeholders.
Since the beginning of the pandemic, to assist those who are new to the registration process, our client services team provided assistance. As the government announced funding programs related to COVID-19, we published guidelines to ensure continued compliance from lobbyists.
We also gave presentations to lobbyists and public office holders on the lobbying regime. This means that more than 300 individuals now know more about the requirements of the act and the code.
The office's website remains the main tool to reach lobbyists and the public. A new website was launched in April 2020.
[English]
Third, I enforce the act and code.
Allegations of non-compliance with the act and the code are dealt with in two steps. First, a preliminary assessment is undertaken to evaluate the nature of the alleged contravention, obtain initial information and determine whether the subject matter falls within my jurisdiction. Following this assessment, and when necessary to ensure compliance with the act or the code, an investigation is commenced.
When I complete an investigation under the code of conduct, I table a report to Parliament. When I have reasonable grounds to believe an offence under the act has been committed, I must refer the matter to a peace officer, most often someone in the RCMP.
Offences under the Lobbying Act include failing to register, failing to file a monthly communication report, providing inaccurate information and lobbying while subject to the five-year prohibition.
Since April 2020, I have opened 16 preliminary assessments, and I currently have five ongoing investigations. Also since April, I have referred three investigation files to the RCMP. As of today, there are 11 files with the RCMP.
When such a referral is made, I must suspend my investigation until the matters have been dealt with. Only once this has occurred can I complete my investigation and report to Parliament.
The act is clear that I must conduct my investigations in private. That means that I cannot comment. These matters may become criminal investigations, and I cannot jeopardize them.
Although I'm unable to comment on cases, I'd like to highlight certain aspects of the act as it relates to some of the issues that the committee is studying.
Under the Lobbying Act, communications in relation to the awarding of a contract is a registerable activity, but only for consultant lobbyists, not for in-house lobbyists.
As well, for in-house lobbyists, the act requires the most senior paid officer of the organization or corporation to file a registration when the collective lobbying activities of the organization or corporation represent “a significant part of the duties of one employee”. The “significant part of the duties” threshold has been established at 20% or more of overall duties. When this threshold is met, the senior officer has two months to register these activities.
When it comes to the five-year ban on lobbying for former designated public office holders, the act prohibits these former officials from lobbying as a consultant or as an in-house lobbyist for an organization. However, if a former designated public office holder is employed by a corporation, this individual is entitled to lobby as long as the communications do not amount to a significant part of his or her work.
Like any other allegations of non-compliance, these elements are all assessed when conducting a preliminary assessment or an investigation.
[Translation]
As I have stated to the committee in the past, the significant part of the duties threshold should be removed from the Lobbying Act, and this will be one of my recommendations should the Lobbying Act be reviewed.
I would also recommend the elimination of discrepancies related to in-house lobbyists regardless of whether they are employed by a corporation or organization. I believe that this would increase fairness and clarity in ensuring that both corporations and organizations are subject to the same requirements.
Finally, with respect to the impact of the pandemic on the results achieved by my office. I have been impressed by the team's ability to work together and continue to deliver excellence during a time of heightened stress and insecurity.
Not only did the employees of my office adjust quickly to a new way of working and find ways to support each other virtually, but they also continued to ensure the delivery of all aspects of the mandate. For this I am very grateful to each and every member of my staff.
Mr. Chair and committee members, thank you, and I welcome your questions.
:
Right. In the case of the Kielburger group, the group was trying to develop two programs. One was the entrepreneurship program with Minister Bill Morneau, which was $12 million, and the Canada student services grant, eventually for $900 million. That's a lot of money.
We talked about this issue. They classified themselves as volunteers, which I think is kind of difficult to figure out, given their structure, but you said—and I found it really interesting—that if someone is getting paid by somebody, it may meet the threshold. That's interesting.
I would ask you if you've looked at the contracts that were signed between the Government of Canada and the holding company that was set up, because the Kielburgers in testimony said, again and again, that 100% of the money was going for young people. They were not taking a dime. They made that very clear, but the contract showed easily a 15% administration fee for their organization. They have many staff, and all their organizations are intertwined, but also the Government of Canada was going to pay $560,000 in rent. That's half a million dollars. We know that the Kielburgers had multiple real estate holdings in the City of Toronto that they were trying to hold on to.
Hypothetically, if people are getting paid for their real estate, if they're getting paid for their staff in one of their organizations, if $50-plus million is being funnelled through an organization, somebody's getting paid. Is it possible that this could meet the threshold for someone getting paid and needing to register?