New Laws Enhanced to Regulate Lobbying 


June 2009 - (Business in Vancouver)

Business in Vancouver
In B.C., the Lobbyists Registration Act has been in effect since 2001. With the enactment of lobbying legislation in Alberta and Manitoba, only three provinces – Saskatchewan, New Brunswick and Prince Edward Island – will remain without legislation to regulate lobbying. Federally, recent amendments were made to the Lobbying Act (Canada) (formerly the Lobbyists Registration Act). The effect of all this legislative focus has been to widen the net of activities that are considered to be "lobbying" and to impose new registration and reporting requirements coupled with more severe penalties for failure to comply. 

As Premier Gordon Campbell's former deputy minister Ken Dobell found out the hard way, failing to register as a lobbyist can lead to serious consequences. Dobell suffered through much negative coverage in the news media as he pled guilty to charges of failing to register as a lobbyist. Similarly, longtime Liberal insiders Patrick Kinsella and Mark Jiles have been the subjects of calls for an investigation into whether they were lobbying without being registered. However, the enhanced new laws to regulate lobbying are not restricted to public personalities. Corporations, corporate executives and their employees and consultants should also be aware of these laws if they wish to avoid a similar fate. 

Officers and employees of organizations who lobby and consultant lobbyists may all be required to register; in many cases, both federally and provincially. Registration usually involves a broad disclosure of corporate details, disclosing particulars of the lobbying activity, the filing of regular reports or returns (monthly returns are required under the federal scheme) and the payment of fees both initially and upon renewal. Enforcement of the federal and some provincial schemes is now overseen by a commissioner with special investigatory powers who reports directly to Parliament or the relevant legislative assembly. Under the new federal Lobbying Act, breaches of the act can lead to fines of up to $50,000, while failing to register or to file regular returns (strict liability offences) or knowingly making a false or misleading statement are indictable offences with fines of up to $200,000 or two years' imprisonment. 

The federal Lobbying Act took effect July 2, 2008, and CEOs of corporations and non-profit organizations were required to register and begin filing the first of their monthly returns by August 15. In addition to the monthly returns, a renewal must be filed with the registrar every six months, and updates must be filed within 30 days, when employees modify or cease their lobbying activities. 

The federal Lobbying Act contains sweeping definitions of regulated activities. Lobbying includes any communication with public office holders with respect to changing federal laws, regulations, policies and programs or obtaining a financial benefit such as a grant, contribution or tax credit. "Communication" is defined very broadly such that the setting or form of communication does not matter, nor does it matter who initiated it. "Public office holder" is defined to include all employees of the federal public service. A corporation is considered to be "lobbying" when the accumulated lobbying activity of all employees reaches the threshold of 20% of the duties of the equivalent of one full-time employee. For many companies, it will be virtually impossible to accurately monitor the activities of its employees to determine whether, in aggregate, this threshold has been reached. 

In addition, the federal Lobbying Act creates a new subcategory for higher-ranking public officials, termed "designated public office holders" (DPOHs). Communications with DPOHs must be disclosed in monthly returns, and DPOHs themselves are prevented from engaging in lobbying for a period of five years after leaving office. Consultant lobbyists are now also prohibited from receiving success fees. 

Most provincial acts define "lobbying" in nearly the same terms as the federal act, but it is important to recognize that many of the procedural aspects are quite different. For example, under British Columbia's Lobbyists Registration Act, in-house lobbyists employed by a commercial interest (a for-profit corporation) are distinguished from non-profit organizational lobbyists. It is each employee lobbyist of a commercial enterprise who must register, not the chief executive under B.C.'s legislation. 

However for business, trade, industry, professional or other non-profit organizations or unions who lobby, it is the most senior officer who is responsible for registering. Most other provincial schemes similarly distinguish between commercial enterprises and non-profit lobbying. 

Lobbying is an important component of many business, union, charitable and community activities. However, given the recent changes to Canadian lobbying legislation and the increased focus on enforcement, all organizations, executives and consultants must now be alert to the importance of educating themselves with respect to what constitutes lobbying and of the requirements for registration and reporting if they wish to avoid potential incriminating consequences. Those in positions of responsibility in larger organizations, particularly those wishing to remain free of the glare of adverse publicity, would be wise to impose internal reporting requirements and other safeguards to identify and monitor all activities that might be construed as "lobbying" and to ensure that those activities are properly reported and undertaken only by those who are registered as required.

This article was co-authored by Corin Bowman, as an articled student at Lang Michener.
This article appeared in the June 2-8, 2009 issue of Business in Vancouver.