LOBBYIST REGISTRATION LEGISLATION:
IMPACT ON ONTARIO CHARITIES AND
NON-PROFIT ORGANIZATIONS
By Jane Burke-Robertson, B.Soc.Sci., LL.B.
Assisted by Edudzi Ofori, B.A. LL.B.
A. INTRODUCTION
Lobbyist registration legislation has been
in place in Canada since the passage of federal lobbyist registration
legislation some twenty years ago.
The Lobbyist Registration Act (“Federal LRA”) was the
first Canadian legislation to govern the conduct of lobbyists
by requiring them to register and file reports to a lobbyist
registry. Ontario was the first Canadian province to regulate
lobbying activity and the Lobbyist Registration Act,
(“Ontario LRA”) was enacted in 1998 with similar provisions
and registration requirements to the Federal LRA. Many other
provinces have since followed suit and enacted similar legislation.
The Federal Accountability Act
(“FAA”) was enacted in December 2006 in an effort to improve
the transparency of lobbying and the accountability of government
decision-making. The FAA both amended and renamed the Federal
LRA and on July 2, 2008, the Lobbying Act
(“Federal LA”) and its accompanying regulations
came into force, bringing some new accountability and transparency
rules for lobbyists.
Many charities and non-profit organizations
operating in Ontario are involved in lobbying as a part of
their activities. Some of these organizations are either
unaware of the existence of lobbyist registration legislation
or are uncertain of its application to them in the conduct
of their programs. This Charity Law Bulletin will
provide an overview of the Ontario and Federal lobbyist legislation
and highlight its significance for charities and not-for-profit
organizations in Ontario. This Bulletin will not review the
boundaries of permissible political activity by charities
or the restrictions on charities in this regard under the
Income Tax Act (Canada).
B.
OVERVIEW
The importance of free and open access
to government is a fundamental democratic right. Indeed the
preamble to the federal Lobbying Act recognises that
“free and open access to government is an important matter
of public interest”. While access to government is an important
right, the accountability of Canadian democratic institutions
also requires transparency so that Canadians can be informed
about the factors and influences that affect government decision-making.
Lobbyist registration and regulation responds to these concerns.
Lobbyist legislation applies to many sectors
of the public, including associations, non-profit corporations,
charities, coalitions and interest groups, including their
employees and boards of directors. Both the Ontario and the
federal legislation make it mandatory for the following types
of lobbyists to register and report lobbying activity to each
of their respective lobbyist registries. They are:
a)
Consultant Lobbyists: A paid individual who is hired to communicate on behalf of a client.
These individuals may be professional lobbyists, e.g. government
relations consultants, lawyers, accountants, etc., but could
be any individual who, in the course of their work for a
client, communicates or arranges meetings with a public
office holder.
b)
In-house Lobbyists (Corporation): A person who is employed by an entity that operates for profit, such
as a bank or a manufacturer. In this case, the entity is
registered by its most senior paid officer as a corporation
that lobbies.
c)
In-house Lobbyists (Organization): A person who is employed by a non-profit entity such as a university,
a charity or a non-profit association. In this case, the
entity is registered by the most senior paid officer as
an organization that lobbies.
Both the federal and the Ontario legislation
have registration requirements for each of these categories
and the requirements vary to some degree. This Bulletin
will focus on the registration requirements for the In-house
Lobbyists (Organization) which pertain to charities and non-profit
organizations. For a detailed discussion on the requirements
for the different categories, comprehensive information is
available at the websites of the Office of the Integrity Commissioner
in Ontario and the Office of the Commission of Lobbying of
Canada.
C.
SCOPE OF THE ONTARIO AND FEDERAL LOBBYING LAWS
1.
What is “Lobbying”?
The Ontario LRA defines “lobby” with reference
to in-house lobbyists as meaning a communication by
an in-house lobbyist with a public office holder in
an attempt to influence:
¨
the development of any legislative
proposal by the Government of Ontario or a member of the Legislative
Assembly;
¨
the introduction, passage,
defeat or amendment of any bill or resolution before the Assembly;
¨
the making or amendment of
any regulation;
¨
the development, amendment
or termination of any policy or program of the Government
of Ontario;
¨
any decision about privatization
or outsourcing; and
¨
the awarding of any grant,
contribution or other financial benefit by or on behalf of
the Crown.
The Federal LA does not specifically define
“lobbying”. Instead it refers to any communication (written
or oral) by an individual who is paid to communicate with
a public office holder on behalf of his or her employer in
respect of:
¨
the making, developing or amending
of legislative proposals, bills or resolutions, regulations,
policies, programs; or
¨
the awarding of grants, contributions,
tax credits or other financial benefits.
As can be seen, the main distinction between
the Ontario LRA and the Federal LA is that the Ontario LRA
defines lobbying to include an attempt to influence
on the part of the lobbyist while the Federal LA requires
only that there be a communication (written or oral) by a
paid lobbyist with no determination of the lobbyists motive
or intention.
While in practice this may be a distinction without a difference,
the definition under the Federal LA attempts to capture all
communications with a more objective standard.
2.
What about Communication Initiated
by Government?
The Federal LA extends its registration
requirements to include communication initiated by the lobbyist
or a public office holder. The Act is triggered by the fact
of communication, not the circumstances surrounding how
the communication arose. In Ontario, it is important to note
that the Ontario LRA specifically excludes communications
initiated by a public office holder from the application of
the Act.
3.
When are you not lobbying?
As noted earlier, not all communication
between public office holders and individuals, firms and organization
will constitute lobbying under the Ontario LRA and the Federal
LA. For example, communications that are purely consultative
to public policy making do not constitute lobbying. Under
the Federal LA (which is similar to the Ontario LRA except
as noted below) lobbying does not include:
¨
oral and written submissions
to a committee of the Senate or House of Commons or of both
Houses of Parliament or to any person having jurisdiction
or powers conferred by or under an Act of Parliament, in proceedings
that are a matter of public record;
¨
oral and written submissions
made to a public office holder about enforcing, interpreting
or applying any act or regulation by that public office holder;
¨
oral or written communication
made to a public office holder by an individual on behalf
of an organization if the communication is restricted to a
request for information; and
¨
oral or written submissions
made to a public office holder in direct response to written
requests for information (Ontario LRA only).
Some examples of communications which do
not normally give rise to a registration requirement are as
follows:
¨
Enquiries to obtain publicly
available information;
¨
General inquiries about the
terms and conditions of programs and application processes;
¨
Participation in consultations,
hearings, roundtables or like activities when the name of
the participants, the government participating organizations
and the subject matters are readily available publicly;
¨
Communication with respect
to the enforcement, interpretation or application by public
office holders of any current federal statute or regulation;
and
¨
Preparation and presentations
of briefings to parliamentary committees.
In contrast, examples of communication which
would require registration under the Federal LA are:
¨
Enquiries about a specific
application for a grant, contribution, tax credit or contract;
¨
Communication to determine
what additional information is required to have an application
approved;
¨
Negotiations and terms related
to a specific financial benefit.
4.
Who is a Public Office Holder?
The meaning of a “public office holder”
under the Ontario LRA is broad and includes an officer or
employee of the Crown, a member of the Legislative Assembly
and their staff, a member of bodies appointed by the Lieutenant
Governor, cabinet ministers, officers of Crown agencies, boards
or commissions, and a member of the Ontario Provincial Police
Force. A public officer holder does not include judges, justices
of the peace and officers of the legislative assembly such
as Ombudsman, Information & Privacy Commissioner.
Under the Federal LA a “public office
holder” is also defined broadly as any officer or employee
of the Canadian Government. This includes:
¨
Members of the Senate or of
the House of Commons (Senators, Members of Parliament, Ministers)
and their staff;
¨
Persons appointed to an office
by a Minister of the Crown or the Governor in Council;
¨
An officer director or employee
of any federal board, commission or other tribunal;
¨
Members of the Canadian Armed
Forces;
¨
Members of the Royal Canadian
Mounted Police; and
¨
Employees of federal departments.
“Designated public office holders” constitute
a category within the broader group of federal officials defined
as public office holders by the Federal LA. Designated public
office holders include:
¨
Ministers
¨
Ministerial Staff
¨
Deputy Minister and Associate
Deputy Ministers
¨
Assistant Deputy Ministers
¨
federal officials of comparable
Deputy Minister or Assistant Deputy Minister rank
¨
Members of PM’s Transition
Team…and anyone else designated by Cabinet
Designated public office holders have two
mandatory requirements. They must respond to enquiries by
the Commissioner of Lobbying and must respect a 5-year post-employment
prohibition on lobbying the federal government. Assistant
deputy ministers and individuals occupying comparable ranks
are exempted from the post-employment prohibition. The prohibition
takes effect on January 2, 2009.
5.
What is the Threshold for Registration
by a Charity and Non-Profit?
Lobbyist registration may be required
under the Ontario LRA and Federal LA (as the case may be)
when on behalf of a charity or non-profit organization, an
employee communicates with a government official about certain
types of government decisions referred to above. In Ontario,
communication with a public office holder may require registration
if it is made in an attempt to influence such a government
decision.
However, not just any amount of lobbying
by an employee of a charity or non-profit will trigger the
registration requirement. Each of the Federal LA and Ontario
LRA require registration only where lobbying comprises a
significant part of the duties of the employee/employees.
This means:
a)
at least 20 per cent of the
duties of any single employee consists of registerable activity
involving government officials of that jurisdiction; or
b)
all of the registerable activities
of all the charity’s employees taken together would amount
to the equivalent of 20 percent of one individual’s duties.
The term significant part of the duties
under the Ontario LRA is measured over a three (3) month period.
As a result, the threshold is reached when the accumulation
of lobbying activities over a three (3) month period reaches
the threshold of 20 per cent for either an individual employee’s
time, or the combined times of more than one employee.
The Ontario Guide to the Lobbyist Registration Act
cautions that if the in-house lobbyist knows that he/she will
be meeting the 20 per cent threshold before 3 months have
elapsed, he/she should register these activities immediately
and not wait for a three-month lapse.
But what does this mean in practice? For
example, do registerable activities include only actual time
spent by an employee on communicating with public office holders
or do they also include time spent on preparation such as
researching, drafting and planning?
The Ontario Guide to the Lobbyist Registration
Act
specifically notes that the definition of significant
part of the duties applies to time actually spent lobbying,
not creating research papers or doing related work. Based
on the Guide, it appears that what is caught under the 20%
threshold is the time spent in the act of communicating whether
oral or written and not the time spent in preparation for
the communication.
Federally, the situation is quite different
in that the time spent by employees is not limited
to the act of communicating and many more duties of employees
appear to be caught within the scope of the legislation. Pursuant
to an interpretation bulletin issued by Office of the Commissioner
of Lobbying of Canada entitled “A Significant
Part of Duties ("The 20% Rule")”,
the determination of whether or
not lobbying constitutes a significant part of the duties
of employees who communicate with public office holders and
who are subject to the 20% rule can be carried out using
various approaches. The Bulletin states as follows:
In the case of corporations
or organizations, the officer responsible for filing the return
must determine whether or not lobbying constitutes a significant
part of the duties of those employees who communicate with
public office holders and who are subject to the 20% rule.
This can be done using various approaches. One way is to estimate
the time spent preparing for communicating (researching, drafting,
planning, compiling, travelling, etc) and actually communicating
with public office holders. For instance, a one-hour meeting
may require nine hours of preparation. In this case, the time
related to lobbying with a public office holder would be the
total, 10 hours. In situations where the time related
to lobbying is difficult to estimate, the officer responsible
for filing will have to estimate the relative importance of
lobbying within the various duties for which the employee
is responsible and determine the proportion related to lobbying
activities. Both methods may be used in conjunction if the
situation is not clear. In any case, the officer responsible
will be accountable for the decision as to whether or not
a registration is necessary.
In order to provide a
time basis for estimating the relative importance of lobbying
activities, a six-month estimation period, should be used.
In any given six-month period, be it the last six months or
the six months coming, if the total amount of time spent lobbying
by all paid employees equals 20% or more of the employment
time of one employee, this would be considered a significant
part of duties and the corporation or organization must register.
In addition, if the 20% threshold is reached during any
given 30-day period during the six-month period, then registration
would also be required.
The Bulletin provides some specific examples
of organizational activities that would be exempt from the
requirement to register and should not be factored into a
calculation of significant part of the duties as follows:
¨
Communications restricted to
a straightforward request for publicly available information,
¨
Preparation and presentation
of briefings to parliamentary committees,
¨
Employees making submissions
to federal public office holders on the employer’s behalf
with respect to the enforcement, interpretation or application
by that official of any existing federal statute or regulation,
and
¨
Routine dealings with government
inspectors and other regulatory authorities.
Finally, in the context of charities and
non-profit organizations, it is important to remember that
a requirement to register is triggered only when lobbying
is done by a paid lobbyist who is employed by
the organization. As a result, unpaid volunteers who lobby
on behalf of organizations will not bring the charity or non-profit
within the scope of the legislative requirements. However,
it is important to be wary since if a director or member of
a non-profit organization should change from being a volunteer
to being paid by the organization, this would trigger a requirement
for the individual to register as a consultant lobbyist and
possibly for the organization to register under the category
of in-house lobbyist (organization) if the individual becomes
an employee.
6.
What are the Registration and
Filing Requirements?
Under the Ontario LRA, the most senior
paid officer of the charity or non-profit that meets the threshold
requirements referred to above must register and file a return
within 2 months of meeting the definition of “in-house lobbyist”,
and within 30 days after the expiration of each 6 month period
after the filing of the previous return.
The senior officer (whether or not the
senior officer is lobbying on behalf of the organization),
must disclose detailed information to the Lobbyist Registration
Office, including the following:
¨
a description of the organization’s
membership (but not personal names of members) and the names
of officers or directors of the organization;
¨
the source and amount of any
government funding received by the organization;
¨
the name of any non-government
entity or organization which, in the fiscal year prior to
the date of filing a registration, provided $750 or more to
the organization in support of the lobbying activity;
¨
the name of each in-house lobbyist
employed by the organization;
¨
the subject matter of the lobbying
during the period of the return and for the following six-month
period;
¨
specific information regarding
the undertaking such as relevant legislative proposal, bill,
resolution, regulation, etc., as defined in the Act;
¨
the name of any ministry, agency,
board or commission that will be lobbied;
¨
whether an MPP or staff member
of an MPP was or is to be lobbied;
¨
the name of any in-house lobbyist
who has been identified in the last return filed and has ceased
to be an in-house lobbyist or to be employed by the organization;
and
¨
communication techniques used
including grass-roots lobbying, which is a communications
technique that encourages individual members of the public
or organizations to communicate directly with public office
holders in an attempt to influence government decisions.
Under the Federal LA, the most senior paid
executive employed by the organization (usually the executive
director or chief executive officer) is responsible for completing
and filing an in-house lobbyist (organization) return within
two (2) months after the need to register arises (that is,
when the 20 per-cent threshold is reached) with the Commissioner
of Lobbying.
Under the initial return to be filed,
the responsible officer is required to disclose the name of
all of the organization's paid employees who perform lobbying
activities on behalf of the organization. If the most senior
officer also undertakes lobbying activities on behalf of the
organization, his or her name will need to be listed as an
in-house lobbyist for the organization. The return must include
other detail such as the following:
¨
A description of the organization’s
membership and any other information to identify its membership
that is prescribed;
¨
If the employer is funded in
whole or in part by a government or government agency, the
name of the government or government agency, as the case may
be and the amount of the funding received;
¨
Particulars to identify the
subject-matter of any communication that any employee named
in the return has made or is expected to make with a public
officer holder;
¨
If any employee named in the
return is a former public office holder, a description of
the offices held, which of those offices, if any, qualified
the employee as a designated public office holder and the
date on which the employee ceased to hold such a designated
public office.
¨
Particulars to identify any
relevant legislative proposal, Bill, resolution, regulation,
policy, program, grant, contribution or financial benefit;
¨
The name of any department
or other governmental institution in which any public office
holder with whom any employee named in the return communicates
or expects to communicate; and
¨
Particulars to identify any
communication technique used or to be used, including grass-roots
communication.
Thereafter, lobbyists must carefully review
their activities at the end of every month to determine whether
a return is required for that month. A lobbyist may be required
to file a return not later than 15 days after the end of each
month, if any of the following four (4) conditions exist:
(1)
Communication with a designated
public office holder took place during the month being reported
(see Lobbying Act Implementation Notice #5 – Communication
with a Designated Public Office Holder).
(2)
Information contained in
an active return is no longer correct or additional information
that the lobbyist became aware of should be included in
an active return.
(3)
The lobbying activities have
terminated or in the case of in-house lobbyists’ activities,
no longer require registration.
(4) Five (5) months have elapsed wince the end of the
last month for which a return was filed (a total of 6 months
since it was filed).
The information contained in the return is
accessible to the public. Access to this information will
permit any registered organization to monitor the lobbying
activities of other organizations.
7.
Are there Penalties for Failing
to comply with the Federal LA or Ontario LRA?
Under the Ontario LRA penalties for contravention
of the Act include fines of up to a maximum of $25,000. The
senior officer of the charity or non-profit may be held personally
liable where:
¨
Lobbying activities are being
conducted and the senior officer does not file a return within
the timeframe provided in the Act;
¨
The senior officer does not
provide the required information in a return as stated in
the Act;
¨
The senior officer fails to
provide the Lobbyist Registrar with changes to a return, new
information or clarification of information requested by the
Lobbyist Registrar;
¨
The senior officer makes false
or misleading statements;
¨
The senior officer knowingly
places a public office holder in a position of real or potential
conflict of interest.
The Federal LA substantially increases the
monetary penalties for lobbyists who contravene the legislation
and like the Ontario LRA, the Lobbying Act places the
responsibility (and liability) directly on the officer of
the charity or non-profit organization who is responsible
for filing the returns or providing the information required
under the Act. The penalties are:
¨
Maximum fine for offence of
knowingly making a false or misleading statement or failing
to file a return is doubled to $50,000 (summary conviction)
and $200,000 (indictment).
¨
Maximum prison sentence is
unchanged: six (6) months (summary conviction) or two (2)
years (indictment).
¨
All other offences under the
Act remain subject only to summary prosecution and conviction.
Maximum fine for these offences doubled to $50,000.
¨
Commissioner will be able to
impose a two-year ban on lobbying by a person convicted of
an offence under the Act.
¨
Commissioner may make public
the nature of the offence, the name of the person who committed
it and the punishment imposed.
D.
Summary
The lobbying laws in place in Ontario and
federally can be a trap for the unwary charity or non-profit
organization. It is important for senior officers, boards
of directors and others to be familiar with these legal requirements
or risk substantial penalties in the event of failure to comply
with the legislative requirements. This bulletin provides
a general overview of the lobbyist registration provisions
under both the Ontario FLA and the Federal LA. A detailed
review of both Acts and interpretation guidelines provided
by the office of the Commissioner of both lobbyist registries
should be conducted in order to understand the full scope
of lobbyist registration requirements in both jurisdictions.
Finally, Ontario charities are cautioned
that the registration and reporting requirements under federal
and Ontario lobbying laws are completely separate from any
determination of what constitutes political activity under
the Income Tax Act (Canada). In this regard, Canada
Revenue Agency’s policy statement on “Political Activity”
is a good starting place for reviewing these income tax requirements
as they relate to registered charities. A detailed commentary
on the policy statement is also available in Charity Law Bulletin
No.25.
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