Are you afflicted by lobbying?

June 27, 2012

While the word “lobbying” may at first blush seem to have a pejorative connotation, rest assured it is not a disease.

The legislature expressly recognizes lobbying as a legitimate means of accessing parliamentary, governmental and municipal institutions, while at the same time acknowledging that it is in the public’s interest to know the identity of anyone seeking to influence the decisions of those institutions.

The Lobbying Transparency and Ethics Act (the “Act”) has made headlines recently. The Lobbyists Commissioner issued a report in May which includes 105 recommendations that would lead to a thorough revision of the Act, now that the public is demanding greater transparency in matters of public spending. Before this revision – if a revision actually takes place – and with the Plan Nord beginning to be implemented, inevitably bringing about repeated interactions between the State and the many players seeking to play a major role in that project, we thought it was appropriate to revisit the obligations under the existing Act by raising the question: At what moment do you become a lobbyist and have to register as one?

The three ingredients

At the risk of over-simplification, let’s say that there are three ingredients to lobbying:

  • A public office holder;
  • A communication intended to influence that public office holder;
  • A lobbyist.

When those three ingredients are combined, you have lobbying, and an obligatory requirement to register as a lobbyist.

Now let’s have a closer look at those ingredients.

1st ingredient: a public office holder

Public office holders work within parliamentary, governmental and municipal institutions. The Act defines public office holders as:

  • government ministers and members of the National Assembly, as well as persons on their staff;
  • government employees;
  • persons appointed to a government agency or enterprise, as well as employees of any such agency or enterprise;
  • mayors, municipal or borough councillors, wardens, chairs and other members of the council of a metropolitan community, as well as persons on their staff, and employees of municipalities.

2nd ingredient: a communication intended to influence

This involves a three-step test:

       Are you initiating an oral or written communication with a public office holder? If so, the first threshold has been crossed.

       Is that communication an attempt to influence a decision of the public office holder? If so, you’ve crossed the second threshold.

       Does the decision involve:

  • the development, introduction, amendment or defeat of any legislative or regulatory proposal, resolution, policy, program or action plan?
  • the issue of any permit, licence, certificate or other authorization?
  • 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 granting of any other form of benefit?
  • the appointment of any “public office holder” within the meaning of the Act respecting the Ministère du Conseil exécutif or any deputy minister?

If you answered yes to any of the above, the third threshold has been crossed and, subject to certain exceptions, you have engaged in lobbying.

But does that make you a lobbyist? Not necessarily …

3rd ingredient: a lobbyist

In order to be required to register in the “registry of lobbyists”, you must be one of the three types of lobbyist identified by the Act:

  • a “consultant-lobbyist” is a person whose occupation or mandate consists, in whole or in part, of lobbying on behalf of another person in return for compensation;
  • an “enterprise lobbyist” is a person a significant part of whose job or function within a profit-seeking enterprise consists of lobbying on behalf of the enterprise;
  • an “organization lobbyist” is a person a significant partof whose job or function consists of lobbying on behalf of an association or other non-profit group.

It should be noted that in the case of enterprise lobbyists and organization lobbyists, the notion of a “significant part” of one’s time or job is largely determined by the Lobbyists Commissioner. If more than 12 days per financial year are devoted to the preparation or implementation of a lobbying activity, or if an executive or member of the board of directors of the enterprise is involved, the Commissioner will consider that registration in the registry of lobbyists is required.

A consultant-lobbyist must be registered no later than the 30th day after the lobbyist begins to conduct lobbying activities on behalf of a client, and no later than the 60th day for an enterprise or organization lobbyist.

Exceptions

As you might expect, the Act and the regulations thereunder contain exceptions to the requirement to register as a lobbyist.

The Act does not apply to a number of activities that might seem to qualify as lobbying, such as submissions made to a parliamentary commission, or during or prior to judicial or adjudicative proceedings.

Also, a person a significant part of whose job or function consists of lobbying on behalf of an association or other non-profit group not constituted to serve management, union or professional interests or the majority of whose members are not profit-seeking enterprises or representatives of profit-seeking enterprises will not be considered an organization lobbyist.

While the aim of this bulletin is to develop your initial reflexes with regards to lobbying, we recommend proceeding on a case-by-case basis in order to determine whether registration is actually required in situations where none of the exceptions in the Act appear to apply. Given the time limits for registration, this analysis should be undertaken as soon as possible following any communication with a public office holder, in order to determine if that communication could be characterized as lobbying.

I am a lobbyist: what do I have to do?

The initial return

If you meet the definition of a lobbyist under the Act, you must file an “initial return” in order to be registered in the registry of lobbyists.

The information to be provided in the initial return includes the following:

  • the name and the business name and address of the lobbyist;
  • the subject-matter of the lobbyist’s activities, and particulars to identify that subject-matter;
  • the duration of the lobbying activities;
  • the name of the parliamentary, government or municipal institution where a public office holder with whom the lobbyist has communicated or expects to communicate is employed, as well as the nature of his or her functions;
  • the amount or value of any financial or other compensation received or to be received in return for the lobbyist’s activities (less than $10,000, from $10,000 to $50,000, from $50,000 to $100,000 and $100,000 or more);
  • the means of communication the lobbyist has used or expects to use.

The end of “catch-all” returns?

While the idea of submitting a “catch-all” initial return when registering (e.g. “Make representations to the Government in order to obtain various contracts”) so as to avoid having to make multiple and highly detailed returns in future is obviously very tempting, a recent notice published by the Lobbyists Commissioner indicates that such returns may be rejected, as they do not, according to the Commissioner, satisfy the aim of the Act. The Commissioner’s notice, dated February 16, 2012, includes the following statements:

[TRANSLATION] “The purpose of the return is to specifically disclose the lobbying activities performed by a lobbyist at the time they are performed, as well as the public institutions targeted by the activities and the period covered by them. The return’s purpose is not to cover all situations that potentially may arise over a prolonged period.”

“The return must contain sufficient information so that a person consulting it is able to know precisely, at the time of such consultation, what decision the lobbyist is trying to influence. In addition, the return must specify which concrete need on the part of the institution the lobbyist is trying to fill, which orientation he or she is trying to influence, which regulation is sought to be modified, the type of grant or other financial benefit being sought, or any details in that regard. Thus, in the case of representations in order to obtain a services contract, the return must specify, for example, the project, the infrastructure or equipment of the public institution for which the services will be provided, as well as the nature of those services. The return cannot simply state in general terms that the lobbyist will be making representations in order to obtain services contracts in a given sector or area.”

We can thus expect that a more specific description of the proposed lobbying activities and the public office holders targeted will be required on returns in the future.

The Code of Conduct for Lobbyists and penal sanctions for breach

Any person who fails to register or who files in the registry a return or notice containing information that the person knows to be false or misleading is guilty of an offence and liable to a fine of $500 to $25,000.

In addition to fulfilling his or her obligation to register, a lobbyist must also respect the provisions of the Code of Conduct for Lobbyists (the “Code”) adopted by the Lobbyists Commissioner and published in the Official Gazette. The Code’s objectives are to establish standards to govern and guide lobbyists in the course of lobbying activities and to foster the transparency of those activities. A breach of the Code is an offence punishable by a fine of $500 to $25,000.

If the Lobbyists Commissioner finds that a lobbyist has gravely or repeatedly breached the obligations imposed on lobbyists by the Act or the Code, the Commissioner may prohibit the registration of the lobbyist or order the cancellation of all entries in the registry concerning the lobbyist for a maximum period of one year. Any lobbying activity carried on in breach of such a decision by the Commissioner is an offence punishable by a fine of $5,000 to $25,000.

Other situations may also lead to penal sanctions, but by now you will have gathered that, while lobbying isn’t a disease, failure on the part of a lobbyist to diligently meet his or her obligations under the Act or the Code can lead to plenty of headaches!

An upcoming modification of the Act?

As noted in the introduction to this bulletin, on May 8, 2012 the Lobbyists Commissioner submitted a report to the National Assembly proposing major amendments to the Act, primarily aimed at “giving it more teeth”. We will be monitoring the progress of  the Commissioner’s proposals, and will prepare a follow-up Legal Bulletin in this regard once an amending bill has been tabled.

Pending the adoption of any such amendments, we thought it appropriate to revisit the obligations under the existing Act, which remain binding until it is amended, whenever that may be.

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