by Gérald Tremblay, C.Q., and Chantal Masse

Transcription

1 McCarthy Tétrault A Notice from the Lobbyists Commissioner dated June 30, 2005 seeks to require the registration of a greater number of officers in the registry of Lobbyists 1 by Gérald Tremblay, C.Q., and Chantal Masse According to Notice No issued by the Lobbyist Commissioner on June 30, 2005, officers, directors or employees of an enterprise who engage in lobbying activities that are significant or have a significant impact on the enterprise must file a return to the registry of lobbyists. In addition, even if these activities are not significant as such, the notice of the Lobbyists Commissioner requires the filing of a return in the registry where all lobbying activities conducted on behalf of the enterprise involves more than 12 days work taking into account the time devoted by each person to both communications with public office holders and the preparation and follow-up to these communications. The senior officer of an enterprise has the obligation to register their lobbyists in the registry. Failure to meet this obligation may result in disciplinary measures and penalties. Introduction The Lobbying Transparency and Ethics Act, S.Q., 2002, c. 23 (the Act ), in force since November 28, 2002, seeks to enable the public to know about certain dealings with public office holders in the province of Quebec by imposing to the persons who make these dealings the obligation to register in a register accessible to the public. This Act applies in particular to dealings made with provincial public office holders by any enterprise whether domiciled in the province of Quebec or elsewhere. All government ministers and members of the National Assembly, as well as persons on their staff are considered public office holders, as are provincial government employees, including municipal employees 2 (Section 4 of the Act).Likewise employees and officers of various government agencies, enterprises and subsidiaries are considered public office holders. The Caisse de dépôt et placement du Québec and Hydro-Québec, as well as their subsidiaries. are among the government enterprises and agencies whose employees and officers are considered public office holders within the meaning of the Act This Legal Update is published subject to the notices that may be issued at a later date by the Lobbyists Commissioner with respect to the execution, interpretation or application of the Act under Section 52 thereof. Furthermore, it does not constitute a legal opinion as to the validity of the notices issued by the Lobbyists Commissioner or the existence of the obligation to register in the registry of lobbyists in a specific case. Since July 1, 2005, even employees from municipalities with fewer than 10,000 inhabitants are targeted (Section 71 of the Act). For a more comprehensive list, consult Appendix 1 of the Annual Management Report of the Auditor General, available at the following address:

2 / 2 The Act applies to lobbying activities and lobbyists as defined under Sections 2 and 3 of the Act. Numerous notices have been issued by the Lobbyists Commissioner on the interpretation of the Act. The most recent one, dated June 30, , modifies significantly the way to determine if the senior officer of an enterprise or organization must register officers, directors or employees within the enterprise or organization in the registry of lobbyists 5. This Legal Update seeks to outline the procedure that enterprises or organizations must now follow to determine if they must be registered in the registry of lobbyists. The exceptions to the Act, registration procedures and their follow-ups are also covered. Failure by an organization 6 or enterprise to comply with this legislation may result in criminal prosecutions against its senior officer. We shall cover this issue hereinafter. Finally, we shall comment on the scope of the latest Notice of the Commissioner. I- Determining if registration of officers, directors or employees of an enterprise or organization in the registry of lobbyists is required There are three questions to be answered in order to determine if a registration in the registry of lobbyists is required: 1. Are oral or written communications on behalf of your organization or enterprise with public office holders made in an attempt to influence them, or may they reasonably be considered as capable of influencing their decision-making? 2. Are the decisions to be made by a public office holder contacted of the same nature as those covered under Section 2 of the Act, namely decisions pertaining to: «[...] 1) the development, introduction, amendment or defeat of any legislative or regulatory proposal, resolution, policy, program or action plan; 2) the issue of any permit, licence, certificate or other authorization; 3) the awarding of any contract, otherwise than by way of a call for public tenders, or of any grant or other financial benefit or the Notice N o issued by the Lobbyists Commissioner on June 30, As at March 31, 2004, a total of 278 enterprise lobbyists were registered in the registry. 207 of them were registered in and 71 in (statistics taken from the Activity Report of the Registry of Lobbyists). Certain persons and agencies are excluded from the application of the Act under the Lobbying Transparency and Ethics Act Exclusions Regulation, R.S.Q. c. T , r. O.1, including persons that conduct lobbying activities on behalf of an association or other non-profit group not constituted to serve management, union or professional interests, nor composed of a majority of members that are profitseeking enterprises or representatives of such enterprises.

3 / 3 granting of any other form of benefit determined by government regulation, or 4) the appointment of any public office holder within the meaning of the Act respecting the Ministère du Conseil exécutif (chapter M- 30) or the appointment of any deputy minister or other holder of a position referred to in section 55 of the Public Service Act (chapter F-3.1.1) or any holder of a position referred to in section 57 of that Act. The arranging by a lobbyist of a meeting between a public office holder and any other person is considered to be a lobbying activity Do the oral or written communications with a public office holder, in an attempt to influence such decisions, constitute a significant part of the job or function within the enterprise of the persons involved in theses communications? Two tests have been elaborated in the Notice recently issued by the Commissioner, which replace the former norm of 20 per cent or more of time spent in lobbying activities: a) The first test measures the qualitative significance of lobbying: - A lobbying activity engaged in by a member of the board of directors or a manager of the enterprise or organization that in itself is significant enough for the enterprise or organization to justify the filing of a return in the registry. For example, any communication that enables a major project to be implemented or ensures the development of the enterprise or organization would be considered a lobbying activity that has a significant impact for the enterprise or organization or its members. b) The second test measures the quantitative significance of lobbying. The Lobbyists Commissioner establishes that if the following conditions are met, a return should be filed in the registry: - When, in a fiscal year, lobbying on behalf of the enterprise or the organization involves more than 12 days work. In computing the time spent in lobbying activities, the time each person devotes both to communications with public office holders and to preparation and follow-up of said activities must be taken into account. 7 The Lobbyists Commissioner has issued numerous notices regarding the interpretation of Section 2, including Notices and to Notice , which deals with the expression "other financial benefit", used in sub-paragraph 3 of the first paragraph of Section 2, specifies that this expression includes "any form of financial assistance granted by a public authority to which the Act applies, particularly by means of a loan, a loan guarantee or a surety contract".

4 / 4 If you have answered no to these three questions this exercise can stop here. If the first two questions are affirmative and the conditions of one or the other test are met, your enterprise or organization shall have to verify if the exceptions provided for under the Act apply, either to exclude the activities of qualitative significance or to compute the quantitative activities covered by the test at under 12 days. II- Exceptions According to the Act 8, the following activities are exempt from consideration when determining lobbying status: - any submission made in, or prior to, judicial or adjudicative proceedings 9 ; - any submission made to a parliamentary committee of the National Assembly or at a public meeting of a municipal council or municipal body; - any submission made in public proceedings, or in proceedings that are a matter of public record 10, to any person or body having jurisdiction or powers conferred by an Act, an order in council or a ministerial order (e.g. B.A.P.E., commission of inquiry, etc.); - any submission made outside a process for the granting of a permit, licence, certificate or other authorization, contract, grant or other financial benefit, for the sole purpose of promoting the existence and characteristics of a product or a service to a public office holder; - any submission made during the negotiation of conditions for the performance of the contract taking place subsequent to the awarding of a contract; - any submission made in response to a written request from a public office holder, including any submission made in response to a call for public tenders issued under the public office holder s authority; - any communications with the sole purpose of inquiring as to the nature or scope of the legal rights or obligations of the organization or the enterprise. Other exception: Section 49 of the Act enables, when the registration would reveal information relating to an investment project of the enterprise, and that this information would likely seriously prejudice the economic or financial interest of the enterprise, a confidentiality order to be issued by the Lobbyists Commissioner. Such an order, if issued, is only valid for a limited time determined by the Lobbyists Commissioner, not exceeding six months. A request to extend the order can, however, be made to the Commissioner, but it is also subject to the same time limits. On the other hand, if the Only the most relevant exceptions were noted. The Act contains other exceptions. Notice from the Lobbyists Commissioner interprets the scope of this exception. The notion of "public proceedings, or ( ) proceedings that are a matter of public record" is the subject of Notice of the Lobbyists Commissioner.

5 / 5 Lobbyists Commissioner denies the request or refuses to extend the order, the information shall be entered in the registry of lobbyists. The following table, included in the last annual report of the Lobbyists Commissioner, establishes how the 27 requests for confidentiality orders received by the Commissioner, since the effective date of the Act, were treated. Note that only one request was received in , as the other 26 requests were filed in : Statistics on Confidentiality Orders From April 1, 2003 to March 31, 2004 From August 1, 2002 to March 31, 2003 Total number of requests received 1 26 Orders issued 6 1 Requests denied 7 6 Requests withdrawn 0 6 Requests pending as at March Orders extended 2 0 Notice authorizing the lifting of confidentiality 5 0 III- Registration in the Registry of Lobbyists Section 14 of the Act requires the registration of an enterprise lobbyist or an organization lobbyist to be made no later than the sixtieth day after the commencement of lobbying activities. According to the Notice issued by the Commissioner: Once the senior officer of an enterprise or organization establishes the obligation to register the enterprise or organization in the registry, the senior officer must file, in addition to the other information required under Section 10 of the Act, the name of all persons, including himself or herself, if applicable, who communicate with public office holders on behalf of the enterprise or organization in an attempt to influence a decision. Section 10 of the Act provides that the following information must be included in the return of an enterprise lobbyist or an organization lobbyist: 1) the name of the senior officer of the enterprise or group on whose behalf the lobbyist is acting, the name of the lobbyist and the name and address of the enterprise or group; 2) if the enterprise or group is a legal person, the name and address of each of its subsidiaries that, to the knowledge of the person filing the

6 / 6 return, has a direct interest in the outcome of the lobbyist s activities on behalf of the enterprise or group; 3) if the enterprise or group is a subsidiary of a legal person, the name and address of that legal person; 4) if applicable, the financial year of the enterprise or group; 5) a description, in summary form, of the business or activities of the enterprise or group, and any information to identify such business or activities; 6) if the enterprise or group is funded in whole or in part, by a government or a municipality, or by a government or municipal body or agency, the name of the government, municipality or body or agency, and the amount of funding involved; 7) the subject-matter of the lobbying activities, and particulars to identify such subject-matter; 8) the duration of the lobbying activities; 9) the name of any parliamentary, governmental or municipal institution in which any public office holder is employed or serves with whom the lobbyist has communicated or expects to communicate, as well as the ministerial, deputy-ministerial, managerial, professional or other nature of the functions of the public office holder; 10) the techniques of communication the lobbyist has used or expects to use; and 11) if applicable, the nature and term of any public office the lobbyist held in the two years preceding the date on which the lobbyist was engaged by the enterprise or group. IV- Follow-up of registrations Following the initial registration, any change in the registration must be done by the senior officer of the enterprise or organization within 30 days following the change (new lobbying activities, termination of engagement, etc., Sections 15 and 17 of the Act). Registration of an enterprise lobbyist or organization lobbyist must be renewed no later than the sixtieth day following the end of the financial year of the enterprise or organization (Section 16 of the Act). This will require persons identified as taking part in lobbying activities requiring registration in the registry to give notification of any change

7 / 7 or new lobbying activity in a timely fashion so that measures to modify the registration may be taken within the prescribed time limit. Officers, directors or employees of the enterprise or organization who conduct lobbying activities that do not require registration in the registry shall reassess on a yearly basis the time spent on these activities and their significance so that the enterprise or organization may comply with the Act, if need be. V- Disciplinary measures and penalties Sections 53 through 65 of the Act provide for disciplinary measures and penalties should the provisions of the Act not be complied with. With respect to disciplinary measures, The Lobbyists Commissioner may prohibit the registration of the lobbyist in the registry for a period not exceeding one year, including an enterprise lobbyist or organization lobbyist, if said lobbyist has gravely or repeatedly breached the obligations imposed on lobbyists by the Act (Section 53). As a result, this person may no longer exercise lobbying activities during said period. The Attorney General may jointly fine both the lobbyist and his or her organization or enterprise an amount equal to the amount payable to the lobbyist for those activities which occasioned the breach of the Act. Because it is the responsibility of the senior officer of an organization or enterprise to file the registration, it s that person who would be liable for fines levied for failing to register. The Act provides for fines of $500 to $25,000 and can be doubled in the event of future offences (Sections 60 and 65 of the Act.) VI- Comments pertaining to the June 30, 2005 Notice Legislation that includes criminal sanctions must be interpreted restrictively. Furthermore, if a statutory provision creating a criminal offence is susceptible to many interpretations, the accused generally benefits from the most favourable interpretation. There are many reasons for challenging the interpretation of the Act proposed by the Lobbyists Commissioner in his June 30, 2005 Notice. For example, in the definition of enterprise lobbyist and organization lobbyist in Section 3 of the Act, the notion of significant part interpreted in the Commissioner s Notice is associated with the job or function of one person ( any person, a significant part of whose job or function consists in lobbying and in French toute personne dont l emploi ou la fonction consiste pour une partie importante à exercer des activités de lobbyisme ) and not to the total activities of several persons or to their qualitative significance for the enterprise or the organization. Furthermore, when the Act was enacted, this notion of significant part of a job or function existed in the federal legislation and was the subject of an interpretation bulletin that established a norm of 20 per cent or more of time spent as being a significant part. Finally, Section 2 of the Act defines lobbying activities as any oral or written communication with a public office holder in an attempt to influence or that may reasonably be considered as capable of influencing certain decisions. The Act itself does

8 / 8 not therefore explicitly include the preparation and follow-up of these communications as opposed to the Notice of the Lobbyists Commissioner. Under these circumstances, the alternatives for enterprises and organizations are as follows: 1. To register their officers, directors and employees who are conducting lobbying activities in compliance with the Notice issued by the Lobbyists Commissioner. 2. To do so only if an analysis reveals that the enterprise lobbyist or organization lobbyist is clearly within the parameters of the Act, without taking into account the Notice issued by the Lobbyists Commissioner. 11 Assuming that the enterprise or organization comes to the conclusion that, in spite of the text of the Notice, it does not have the legal obligation to proceed with such registration, two options are open: - Wait for the Attorney General to institute proceedings and plead, in defence, grounds enabling to challenge the legality of the Notice. - Initiate proceedings immediately by means of a recourse in declaratory judgment or an action in nullity in order to obtain a judiciary decision determining the validity of the notice and what are its rights and obligations under the Act. Whatever is considered, McCarthy Tétrault LLP is in a position to assist you. Jurists and litigators 12 are at your disposal to help you determine if registration is required and to advise you in your choice to challenge the Notice or to comply with it. Paralegals 13 are also at your disposal to facilitate the technical aspects of registering in the registry of lobbyists and can even complete the registrations on behalf of the senior officer of your enterprise Note that Section 2 of the Code of Conduct for Lobbyists, R.S.Q. c. T , r. O.2, requires lobbyists to take into account the notices of the Lobbyists Commissioner and that Sections 63 and 65 of the Act provide that any contravention to the Code of Conduct is a criminal offence liable to a fine of $500 to $25,000 that can be doubled in case of a second or subsequent offence. However, the notices of the Lobbyists Commissioner must remain within the limits of the provisions of the Act. Messrs. Gérald R. Tremblay, Chantal Masse, William J. Atkinson, Michel Laplante, Louis Brousseau, Geneviève Gagnon and Sébastien Pierre-Roy. Pat Tunstall and Julie Helms.