Lobbying Commissioner recommends significant changes to Canada’s federal lobbyist registration rules
Lobbying is at an all-time high in Canada. Last month, Canada’s federal Commissioner of Lobbying testified before the House of Commons Standing Committee on Access to Information, Privacy and Ethics. She reported that there were 6,435 active federal lobbyists in March 2021, the most ever in a single month; that there had been a 54-percent increase in monthly communications reports filed compared with the previous fiscal year; and that the number of new lobbyist registrations had increased by 41-percent. This increased activity, in the Commissioner’s view, highlights the need for Parliament to update Canada’s lobbying laws.
The Commissioner’s appearance before the Standing Committee followed her report on preliminary recommendations to improve the Lobbying Act (the “Act”) and Lobbyists Registration Regulations published earlier this year. The report, in turn, followed the Commissioner’s testimony in March 2020 to the same Standing Committee, in which the Commissioner argued for reform and hinted at what her recommendations might be. We wrote about her March 2020 committee testimony here.
In her 2021 report, the Commissioner drew on her office’s experience in enforcing the Lobbying Act, the conclusions of the 2012 statutory review of the Act, and a jurisdictional analysis of provincial, territorial, and municipal lobbying regimes. The Commissioner made 11 recommendations aimed at enhancing transparency, fairness, clarity, and efficiency in the federal lobbying regime. Below, we explore the Commissioner’s key recommendations, which could affect your organization or business.
This political law update is intended as general guidance only. If you have specific questions or concerns, please contact one of the authors. We would be pleased to assist you.
The Commissioner’s key recommendations
Strengthen the five-year prohibition on lobbying by former designated public office holders
Currently, the five-year lobbying prohibition does not allow a former “designated public office holder” (“DPOH”, defined in section 2 of the Act) to work as a consultant lobbyist or to lobby on behalf of an organization. However, a former DPOH can lobby on behalf of a corporation as long as their federal lobbying activities do not amount to a “significant part” (i.e., 20-percent or more) of their paid duties.
The Commissioner has recommended applying the five-year prohibition on lobbying equally to all former DPOHs, including to in-house lobbyists. This would prohibit former DPOHs from engaging in any lobbying activities for five years following the last day of their employment in government.
Require all of a corporation or organization’s in-house lobbyists and directors to register, no matter how much time they spend lobbying
Currently, the Act has different reporting requirements for in-house lobbyists depending on whether the lobbyist works on behalf of a corporation or organization. Organizations are obliged to disclose names of all employees that engage in lobbying activities on behalf of the organization, whereas corporations are only required to register senior officers who lobby on behalf of the corporation and employees whose federal lobbying activities constitute at least 20-percent of their paid duties. The Commissioner has proposed that all in-house lobbyists be required to be listed on a corporate or organizational registration, no matter the amount of time spent lobbying, and regardless of whether they lobby for a corporation or organization.
The Commissioner has also recommended that corporations and organizations be required to disclose all entities that have a direct interest in the outcome of their lobbying activities. Presently, subsidiaries and parent corporations for corporations, and only memberships for organizations, must be disclosed.
Additionally, if the Commissioner’s recommendations are adopted, corporations and organizations could have to take greater care in tracking their board members’ lobbying activities. Currently, non-employee members of boards of directors who engage in paid lobbying on behalf of a corporation or organization are considered consultant lobbyists and must register on their own behalf, separately from the corporation’s or organization’s registrations. The Commissioner’s recommendation is to treat board members as employees of the corporation or organization, such that they would be considered in-house lobbyists under the Act. Doing this would require the responsible officer (the most senior paid employee of the corporation or organization) to capture board members’ lobbying activities in the corporation or organization’s registration. According to the Commissioner, implementing this recommendation would provide a “complete picture” of all lobbying done on behalf of the corporation or organization through a more streamlined process.
Eliminate the “20-percent rule”
As noted above, corporations and organizations are currently required to register lobbying activities of their employees when an employee’s lobbying duties constitute a “significant part of their duties” (i.e., 20-percent or more of their paid duties) or if the employee’s activities, together with the activities of all other employees of the corporation or organization, would constitute a “significant part of their duties” if performed by only one employee.
The Commissioner has recommended eliminating the “significant part of duties” threshold and replacing it with an obligation to register lobbying activities by default. The Commissioner recommends a limited exemption to this default registration obligation for smaller corporations and organizations that have fewer than six in-house lobbyists, whose personnel collectively devote eight hours or less to federal lobbying in a given three-month period, and none of whose primary purposes is to represent the interests of the organization’s members or to engage in issue advocacy.
The Commissioner’s report states that the current threshold is “overly burdensome” for corporations and organizations to track and monitor, and for the Commissioner’s office to promote compliance. Eliminating the “20-percent rule” would oblige more corporations and organizations to register lobbying activities, but the Commissioner hopes that this increased compliance burden would be offset by eliminating the burden of keeping track of and monitoring employees’ lobbying activities.
Surprisingly, the Commissioner has walked back her initial recommendation, made during her March 2020 testimony before the Standing Committee, that Parliament enact a new threshold for registrable lobbying that would depend on the subject matter of the lobbying. The Commissioner had indicated that, in her view, any request of $10,000 or more, regardless of the time spent lobbying, should require registration. The Commissioner’s 2021 report replaces this recommendation that the registration threshold be eliminated altogether, other than for smaller corporations and organizations as described above.
Introduce stronger compliance and enforcement measures
Currently, the Commissioner can only deal with non-compliance through the imposition of criminal sanctions following an investigation and referral to a peace officer. The Commissioner has recommended adding a range of compliance measures, such as requiring training, imposing administrative monetary penalties, and ordering temporary lobbying prohibitions for relatively minor infractions, all as a means of promoting compliance with the Act. This would bring the federal Commissioner’s powers in line with the powers of some of her provincial counterparts. For example, British Columbia’s lobbying registrar may impose administrative monetary penalties of up to $25,000 for contraventions, while Ontario’s registrar has the authority to prohibit individuals from lobbying for up to two years for certain non-compliant conduct.
This recommendation is also consistent with a recent trend of parliamentary officers across Canada recommending the expansion of their roles by introducing new administrative means of promoting compliance. For example, the federal and Ontario chief electoral officers have recently gained the power to address infractions of their respective legislation by imposing administrative monetary penalties.
The Commissioner has also recommended that a new provision be enacted that would make orders issued by the Commissioner — such as summonses and production orders — enforceable as orders of the Federal Court.
Lastly, the Commissioner has asked for the power to refer alleged offences under federal, provincial, and municipal lobbying regimes to the appropriate authority. Currently, the Commissioner may only refer suspected breaches of the federal Act to a “peace officer” (i.e., the RCMP). This proposal, if enacted, would allow the Commissioner to refer a breach of provincial lobbying legislation by a registered federal lobbyist to the appropriate provincial lobbying commissioner.
Given the Commissioner’s recent approach to investigations, enforcement, and the increase in preliminary assessments, we expect that, if the Commissioner were granted the additional powers she has requested, she would not be shy about using them.
Harmonize registration deadlines for consultant and in-house lobbyists to 15 days
Currently, the Act has different registration time limits for consultants and in-house lobbyists. The reason for the variation is unclear. For consultants, the timeframe to register as a lobbyist is within 10 days after an undertaking to lobby on behalf of a client. For in-house lobbyists, the timeframe for the corporation or organization to register is within two months of reaching the “significant part of duties” threshold.
The recommendation to require both consultant and in-house lobbyists to register within 15 days is intended to be a “compromise” between the two time limits. The Commissioner also believes that harmonizing the deadlines would enhance transparency and promote timely registration.
Expand reporting requirements for monthly communication reports with additional contextual information
The Regulations under the Act currently require disclosure of communication reports for oral communications that are (1) initiated by a lobbyist and that are “arranged in advance”, (2) initiated by a public office holder and that concern “the awarding of a grant, contribution or other financial benefit”, or (3) commenced by a consultant lobbyist and that concern the awarding of a contract. Currently, only the names of DPOHs present during the oral communications are required to be disclosed, and not the names of the lobbyists, clients, or other participants in those communications. The same goes for consultant lobbyists that arrange a meeting between their client and designated public office holders but do not participate in the meeting themselves.
The Commissioner has recommended significantly broadening the scope of communications that must be reported monthly to include all oral communications with DPOHs, regardless of who initiated them or if they were arranged in advanced. Effectively, this would mean that lobbyists would be required to report oral communications that occur spontaneously, such as, in the Commissioner’s words, the “one-hour conversations while you wait for your plane together”. The Commissioner has also recommended that lobbyists disclose more contextual information about their communications with public office holders, such as whether lobbying occurred during a sponsored trip, or an event hosted by a lobbyist, or whether a gift was offered, or whether a political donation was made.
The bottom line
It will be interesting to see whether the federal government — or even the opposition — takes steps to debate or adopt any of the Commissioner’s recommended changes. Changes to the Lobbying Act would need to take the form of legislation, and amendments to the Lobbyists’ Code of Conduct would require further consultation and referral to the Standing Committee for consideration.
Federal players would need to take swift action in order to enact any meaningful reforms before the next federal election, which must occur by October 2023 but is expected sooner. In the meantime, organizations need not take immediate steps to revise their lobbying practices and policies based on the Commissioner’s report, but should continue to watch for developments at the federal level.
Our team at McCarthy Tétrault LLP will continue to monitor this file. Please contact Adam Goldenberg or Amanda Iarusso with any questions or for assistance.
 House of Commons, Standing Committee on Access to Information, Privacy and Ethics, Evidence, 43-2, No 35 (14 May 2021) at 14:05 (Nancy Belanger) [Commissioner’s May 2021 Testimony].
 Commissioner’s May 2021 Testimony at 14:05.
 Office of the Commissioner of Lobbying of Canada, Improving the Lobbying Act Preliminary Recommendations (February 2021), online: <https://lobbycanada.gc.ca/media/1933/leg-improving-the-lobbying-act-submission-preliminary-recommendations-2021-02-12-en.pdf> at 24 [Improving the Lobbying Act Preliminary Recommendations].
 Improving the Lobbying Act Preliminary Recommendations at 10.
 Improving the Lobbying Act Preliminary Recommendations at 13.
 Improving the Lobbying Act Preliminary Recommendations at 16.
 Improving the Lobbying Act Preliminary Recommendations at 1.
 House of Commons, Standing Committee on Access to Information, Privacy and Ethics, Evidence, 43-1, No. 4 (9 March 2020) at 16:45 (Nancy Belanger) [Commissioner’s March 2020 Briefing].
 Improving the Lobbying Act Preliminary Recommendations at 35.
 Lobbying Act, s. 5(1.1).
 Lobbying Act, s. 7(2).
 Improving the Lobbying Act Preliminary Recommendations at 9.
 Regulations, s. 9.
 Improving the Lobbying Act Preliminary Recommendations at 17.
 Regulations, s. 7.
 Improving the Lobbying Act Preliminary Recommendations at 20.
 Commissioner’s March 2020 Briefing at 16:45.
 Improving the Lobbying Act Preliminary Recommendations at 23.