Lobbying in Canada after R. v. Carson
A decision this significant is bound to generate plenty of commentary. For another perspective, please visit our Canadian Appeals Monitor blog, where our colleagues Awanish Sinha and Ryan MacIsaac have published their insights on R. v. Carson.
It is a crime, punishable by up to five years in prison, to:
- Have, or pretend to have, influence with the Government of Canada or a provincial government; and
- agree to use that influence, in exchange for something of value, in connection with any matter of business that the government could facilitate.
The foregoing constitutes the offence of “influence peddling” under s. 121(1)(d) of the Criminal Code. So said a majority of the Supreme Court of Canada in R. v. Carson, 2018 SCC 12, released last week.
But, if it is criminal to agree to use one’s influence to try to get a government to do something, then what about lobbying — a perfectly legal activity that is regulated by the federal Lobbying Act and by comparable legislation in every province?
Carson leaves this question unanswered. Unlike the majority of the Court of Appeal for Ontario (2017 ONCA 142, at paras. 37-46, per Pardu J.A.), neither Karakatsanis J., for a majority of the Supreme Court of Canada, nor Côté J., in dissent, so much as mentioned lobbying in their respective reasons. Lobbyists, and the private entities that employ them, are left to read between the lines.
Here is how we would do so.
Lobbyists must be careful to sell communication, not influence
After Carson, it is more important than ever for those who engage in federal or provincial lobbying to refrain from suggesting that they have any particular sway with the government or its officials. Rather, lobbyists should focus their pitches on their skills as communicators.
The Lobbying Act envisions the lobbyist’s role as enabling the client to communicate effectively with public office holders, not to exercise the lobbyist’s own influence over those public office holders. It is the client, not the lobbyist, who ultimately persuades the government to act (or refrain from acting) as the client hopes it will.
By hewing carefully to this conception of lobbying, those who are paid to communicate with public office holders should avoid the reach of s. 121(1)(d) of the Criminal Code. After Carson, there will be few limits on that provision’s scope, but the Lobbying Act will be one of them, as discussed below. Until courts clarify precisely where communication ends and influence begins, lobbyists should be clear that they are selling the former, not the latter.
For those who actually have “influence” with the federal government or that of a province, as that term is used in s. 121(1)(d) of the Criminal Code, the Supreme Court of Canada’s decision in Carson makes any paid lobbying a riskier proposition than it ever has been. Still, as the Supreme Court of Canada held some 35 years ago, “influence” requires more than an ability to open doors or arrange meetings; it entails the power to affect government decisions. After Carson, lobbyists should take care not to claim “influence” they do not have — and those with actual “influence” should take care not to lobby at all.
Business “relate[s]” to the government whenever the government could be involved
The question in Carson was whether an individual — namely, Bruce Carson, a former senior advisor to Prime Minister Stephen Harper — could be convicted of influence peddling, even if the government had not been directly involved in the “matter of business” in connection with which he had agreed to exercise his influence. In Mr. Carson’s case, Mr. Carson had agreed to speak to federal officials, Cabinet ministers, and staffers on behalf of a private company seeking to sell point-of-use water treatment systems to First Nations. At the time of the agreement, the federal government’s policy was to let First Nations decide for themselves whether to procure water treatment systems, and which to buy. In other words, the “matter of business” in relation to which Mr. Carson had agreed to exercise his influence did not actually depend on action by the government. For this reason, he had been acquitted at trial.
The Court of Appeal for Ontario, in a 2-1 decision, held that Mr. Carson’s acquittal should be set aside and a conviction entered. Eight judges of the Supreme Court of Canada agreed. It did not matter, for either majority, that the government did not actually have a role in the business transactions at issue. It was enough that the government could have been involved. Katakatsanis J. held that, since it “could have changed its mode of operations, modified its funding structure or terms and conditions, or created new pilot projects in a manner favorable to” Mr. Carson’s client, the business of purchasing water treatment systems was “a matter of business relating to the government” for the purposes of s. 121(1)(d) of the Criminal Code. Mr. Carson was therefore guilty of influence peddling.
Lobbyists should not “hav[e] or pretend to have influence”
The Court’s broad reading of s. 121(1)(d) of the Criminal Code means that a wider range of agreements to exercise influence with the government may be punished as influence peddling. But what, precisely, is “influence”? As the Court has interpreted that term in the past, “having influence” likely describes individuals who, by operation of the Lobbying Act, ought not to be lobbying in the first place.
Section 121(1)(d) provides, in part, that:
Every one commits an offence who …
having or pretending to have influence with the government or with a minister of the government or an official, directly or indirectly demands, accepts or offers or agrees to accept, for themselves or another person, a reward, advantage or benefit of any kind as consideration for cooperation, assistance, exercise of influence or an act or omission in connection with …
the transaction of business with or any matter of business relating to the government.
There was no dispute, in Carson, that Mr. Carson had influence with the government, or that he had demanded a benefit as consideration for using his Rolodex. As a consequence, the courts did not need to consider what it means to “hav[e] or pretend to have influence with the government or with a minister of the government or an official”. Yet, it will likely be this statutory language that, in future cases, distinguishes legitimate lobbyists from criminal influence peddlers.
More than three decades ago, in R. v. Giguère,  2 S.C.R. 448, the Supreme Court of Canada considered what it means to have or pretend to have influence with the government:
Section 110(1)(d) [now s. 121(1)(d)], although including people outside government, must be limited to those who have, or pretend to have, a significant nexus with government. Someone outside government who has no more “clout” than to be able to arrange a meeting with a government official has at best a tangential connection with government. That is not the type of person whose actions s. 110 is trying to control. In my view, a person having influence with government is a person who could affect, for example, a decision by government to award a contract, and correspondingly a person who pretends to have influence is a person who pretends he could affect such a government decision.
Someone with “a significant nexus with the government”, who “could affect … a decision by government to award a contract” is arguably prevented from lobbying federally by both the Lobbying Act and the Lobbyists’ Code of Conduct. Section 10.11(1) of the Lobbying Actprevents former “designated public office holders” from becoming lobbyists within five years of their departure from public office. Rules 6, 7, 8, and 9 of the Code of Conduct, meanwhile, prohibit lobbyists from placing public office holders in real or apparent conflicts of interest. Rule 8 specifically prevents a lobbyist from “lobby[ing] a public office holder with whom [the lobbyist] share[s] a relationship that could reasonably be seen to create a sense of obligation”.
An individual who “share[s] a relationship” with a public office holder “that could reasonably be seen to create a sense of obligation” would seem to have “a significant nexus with government” and thus the sort of “influence” caught by s. 121(1)(d) of the Criminal Code, as described by the Court in Giguère. What is illegal is dealing in that influence, which stands to undermine government integrity (or the appearance of government integrity) by placing (or appearing to place) private interests in conflict with the public interest in the context of government decision-making: see Democracy Watch v. Campbell, 2009 FCA 79,  2 F.C.R.139, at para. 52.
In this way, the Lobbying Act and the Lobbyists’ Code of Conduct arguably erect guardrails to keep federal lobbyists from straying into influence-peddling territory. Scrupulous compliance with the Lobbying Act and the Code of Conduct should keep those with “influence” out of federal lobbying altogether.
But what about provincial lobbyists? Carson, when read alongside Giguère, suggests that the best way to minimize criminal exposure is: (a) to comply with provincial restrictions on who may lobby that parallel those set out in the federal Lobbying Act and Lobbyists’ Code of Conduct; or (b) if no such provincial restrictions apply, to comply with the federal restrictions as though they applied to provincial lobbying.
The bottom line is that all lobbyists, provincial and federal, must not trade on their “influence” as the Court defined the term in Giguère. According to Carson, s. 121(1)(d) of the Criminal Code prohibits anyone “having … influence” from agreeing to provide even “cooperation” or “assistance” with any matter of business that the government could facilitate. And, as Dickson J. (as he then was) held in Giguère, someone who has “influence” with a government, and who accepts or demands a benefit merely for “opening doors or arranging meetings”, may be convicted of a criminal offence. By contrast, someone who does not truly have “influence” with the government, and who is able only to open doors or arrange meetings, may do so without inviting criminal sanction, so long as she or he does not pretend to have “influence”. Simply put, if one has influence with the government, whether federal or provincial, one cannot be paid to use it, expressly or otherwise.
One might hope that, if a provincial lobbyist who had complied with all provincial lobbying requirements were ever charged criminally under s. 121(1)(d) of the Criminal Code, a court would find a route to acquit by interpreting “influence” at least as narrowly as the Supreme Court of Canada did in Giguère. Unfortunately, after Carson and the Court’s broad reading of “any matter of business relating to the government” in the same Criminal Code provision, this may not be a safe bet.
There is potential overlap between influence peddling and lobbying
As Pardu J.A. noted for the majority of the Court of Appeal:
There is considerable overlap between the conduct targeted by the [Lobbying Act] and that targeted by s. 121(1)(d) [of the Criminal Code]. Read literally, almost identical conduct which, on its face, is made criminal by s. 121(1)(d) is sanctioned and regulated by the Act.
Since Mr. Carson had not complied with the Lobbying Act, Pardu J.A. found it unnecessary “to consider the effect of compliance with the Act on the scope of criminality defined by s. 121(1)(d) of the Criminal Code”. She did, however, suggest that:
If the purpose of the s. 121(1)(d) prohibition is to bar the non-transparent exercise of influence, …. [i]t may be in some cases that the transparency afforded by compliance with the reporting requirements of the Lobbying Act will mitigate the evils to which s. 121(1)(d) is directed.
According to Pardu J.A., then, the mischief towards which s. 121(1)(d) is directed is “the non-transparent exercise of influence”, i.e., the same mischief targeted by the Lobbying Act. This provides a basis for reading the two statutes — as well as comparable provincial lobbying legislation — in harmony with one another.
Unfortunately, the Supreme Court of Canada did not endorse this approach. According to Karakatsanis J., the evil that s. 121(1)(d) of the Criminal Code aims to prevent is not the “non-transparent exercise of influence”, but rather the exercise of influence itself. In her words, “[g]overnment integrity and the appearance of government integrity are undermined when people are paid to persuade government to facilitate transactions to one party’s advantage”.
This statement is difficult to square with federal and provincial laws that regulate lobbying. In the preamble to Lobbying Act, Parliament itself has declared that “lobbying public office holders is a legitimate activity”. The Act goes on to define “lobbying” to include “communicat[ing] with a public office holder in respect of”, among other things, “the development or amendment of any policy or program of the Government of Canada”, and “the awarding of any grant, contribution or other financial benefit by or on behalf of” the federal Crown. Provincial legislation defines lobbying in similar terms.
Lobbyists who are paid to undertake these activities may, in certain circumstances, be said to be “paid to persuade government to facilitate transactions to one party’s advantage” — namely, their client’s. Does this necessarily “undermine” both “government integrity and the appearance of government integrity”, in Karakatsanis J.’s words? Surely not if, as the Lobbying Act puts it, “lobbying … is a legitimate activity”.
The Supreme Court of Canada’s decision in Carson thus puts lobbyists — and their lawyers — on notice, if perhaps unintentionally. The purpose of s. 121(1)(d) of the Criminal Code, according to the majority, is to protect government integrity. That integrity, the Court says, is undermined by paid persuasion. Until the courts have another occasion to consider precisely how this aligns with federal and provincial lobbying legislation, professionals who are paid to communicate with public office holders should proceed with caution. Such caution demands, at a minimum, scrupulous compliance with federal and provincial lobbying legislation.
Conduct that complies with the Lobbying Act should be safe from criminal prosecution
The Court of Appeal majority was correct that s. 121(1)(d) of the Criminal Code can work harmoniously with the registration requirements of the Lobbying Act. But the reason is not necessarily that, as Pardu J.A. put it, s. 121(1)(d) is directed at “the non-transparent exercise of influence”. Rather, it is because lobbying activities that comply with the Lobbying Act and the Lobbyists’ Code of Conduct are unlikely to be considered exercises of “influence”, as that term is used in s. 121(1)(d). As noted above, lobbyists who have such influence cannot lobby in compliance with the Act and the Code of Conduct. If they lobby anyway, they may be caught by s. 121(1)(d).
It follows that conduct that complies with the Lobbying Act and the Lobbyists’ Code of Conduct should be safe from criminal prosecution. This makes sense. As the Supreme Court of Canada held in Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168, 2012 SCC 68,  3 S.C.R. 489, at para. 37, “Parliament is presumed to intend ‘harmony, coherence, and consistency between statutes dealing with the same subject matter’”. Conduct that is regulated by one federal statute will not be found to be criminalized by another.
This is yet another reason for provincial lobbyists to use the federal lobbying rules as a guide in avoiding the reach of s. 121(1)(d) of the Criminal Code — particularly in provinces whose own restrictions on who may lobby do not mirror those in the Lobbying Act and the Lobbyists’ Code of Conduct. Though courts will not necessarily presume “harmony, coherence, and consistency” between federal and provincial statutes, provincial lobbying practices that respect the federal restrictions on who may lobby will likely benefit from similar protection by extension.
Lobbyists who merely pretend to have influence may technically be able to comply with the Lobbying Act and the Code of Conduct, or analogous provincial restrictions, and yet be caught by s. 121(1)(d). It is to avoid this situation that those who communicate with public office holders ought to be crystal clear about what they can and cannot offer their clients, lest they slip between the cracks left by the Court in Carson.
Adam Goldenberg and Jessica Firestone are members of the McCarthy Tétrault’s Government Law team.