A.
INTRODUCTION
Lobbying legislation in Canada has been
in place since 1988. On July 2, 2008, the federal lobbying
statute was amended by the Federal Accountability Act
and was renamed the Lobbying Act. Various provinces
also have lobbyist registration legislation. The province
of Ontario’s Lobbyist Registration Act has been around
since 1998.
Although there are differences between
these statutes (such as what constitutes lobbying, when
registration is required, etc.), both of them apply to charities
and non-profits. Many charities and non-profits are not
aware of the existence of these statutes, or are uncertain
that some of their programs constitute lobbying and therefore
requiring them to register under these statutes.
Where a charity or a non-profit engages
in lobbying activities, registration is required only where
the lobbying activities of the organization constitute a
significant part (i.e. 20%) of the duties of at least one
paid employee (referred to as “the 20% rule”). However,
lobbying conducted by volunteers would not require lobbying
registration.
Not only do these statutes apply to charities
and non-profits, persons paid to lobby on their behalf are
also required to register as “consultant lobbyists.” Consultant
lobbyists are those who are hired to communicate with public
office holders on behalf of a client. They may be professional
lobbyists or those who, in the course of their work, communicate
or arrange meetings with a public office holder. Examples
of consultant lobbyists include government relations professionals,
lawyers, notaries, engineers, accountants or other professional
advisors who provide lobbying services. At the time of writing,
the online registry indicates that there are 863 consultant
lobbyists (out of a total of 4713 active lobbyists) who
have filed 2276 registrations (out of a total of 3061 active
registrations).
Consultant lobbyists include members
of charities and non-profits who are paid (not as employees)
for engaging in lobbying activities for these entities.
In the case of directors of non-profits, where a chairperson
or a member of a board of directors communicates with federal
public office holders in the course of his/her duties, the
person would be required to register as a consultant lobbyist
if the person is an outside director who is paid for his/her
services beyond reimbursement of expenses. If the person
is a lawyer by profession, it would be necessary for the
lawyer to distinguish whether the lobbying is in the context
of his/her law practice or in his/her position as an officer
for the non-profit. Technically, this issue would not arise
in situations involving charities, since directors of a
charity are considered to be quasi-trustees for the purposes
of managing and investing its charitable property and are
prohibited at common law from receiving any direct or indirect
benefit from the charity.
All lobbying activities conducted by
consultant lobbyists would trigger compliance with lobbying
legislation, and the 20% rule that applies to the lawyers’
charitable and non-profit clients would not apply. Lobbying
activities are defined in the statutes. Generally, they
include communicating with public office holders with respect
to changing laws, regulations, policies or programs; obtaining
a financial benefit such as a grant or contribution; obtaining
a government contract; and, for consultant lobbyists, arranging
for a meeting with a public officer holder.
In their representation of their clients,
special issues may arise for lawyers as a result of the
Rules of Professional Conduct. In addition, where lobbying
is conducted on behalf of charitable and non-profit clients,
additional issues may also arise.
B.
COMPETENCE
The Rule requiring lawyers to provide
competent advice to clients would require a lawyer to review
with the charitable/non-profit client whether the intended
lobbying activity is within the client’s authority. While
the constating documents for for-profit companies often
do not contain any provision that may limit the extent of
activities that may be engaged in by the business, this
may not be the case for charities and non-profits. Charities
and non-profits are established to achieve specific objects
set out in their constating documents. Some charities and
non-profits may include a provision in their constating
document that the organization does not engage in certain
activities, such as political or lobbying activities.
Another issue that the lawyer would need
to review with a charitable client, but not non-profit clients,
is whether the intended lobbying activity may violate the
prohibition under the Income Tax Act (Canada) on
registered charities from engaging in certain political
activities. In general, charities cannot engage in partisan
political activities (i.e. activities which involved the
direct or indirect support of, or opposition to, any political
party or candidate for public office). However, a charity
may engage in non-partisan political activities if they
are connected and subordinate to the charity’s purposes,
provided that the charity devote substantially all (i.e.
90% or more) of its resources to charitable activities.
The definition of political activities at common law is
not the same as the statutory definition of lobbying activities
under lobbying legislation. Some political activities are
lobbying activities, while some lobbying activities are
political. Therefore, although charities are not permitted
to engage in political activities, it is possible that some
of their charitable activities could be recognized as lobbying
and therefore would require registration under the lobbying
legislation. Therefore, lawyers acting for charities should
review the intended lobbying activity with their client
to determine whether the charitable status of the client
might be jeopardized.
C.
LOBBYISTS' CODE OF CONDUCT
Consultant lobbyists are required to
comply with the Lobbyists’ Code of Conduct developed by
the Commissioner of Lobbying. The Code provides that its
purpose is to assure the Canadian public that lobbying is
done ethically, with the highest standards, and with a view
to conserving and enhancing public confidence and trust
in the integrity, objectivity and impartiality of government
decision-making. Therefore, lawyers who lobby would have
a duty to comply with both the Code and the Rules. In a
number of respects, the Code and the Rules are consistent
with each other, e.g. section 4 of the Code requires consultant
lobbyists not to divulge confidential information, unless
the informed consent of the client is obtained or disclosure
is required at law. However, where there is a conflict between
the Code and the Rules, it is possible that the lawyer may
be put in an awkward position and may have to decline to
act for the client. For example, a lawyer is required under
section 1 of the Code to disclose the identity of the organization
on whose behalf the lawyer lobbies, whereas the Rules require
a lawyer to maintain confidentiality for the client.
D.
CONFIDENTIALITY AND SOLICITOR/CLIENT PRIVILEGE
Both the federal and Ontario lobbying
legislation require a lawyer who engages in lobbying activities
on behalf of a client to have a personal duty to file returns
under the lobbying legislation. This filing requirement
may be at odds with the Rule requiring lawyers to maintain
confidentiality in respect of their clients.
The information filed is maintained in
an online registry and is available to the public. The purpose
of the registry is to ensure transparency of lobbying activities,
so that the general public, the media and public office
holders may know who is lobbying the government, for what
purpose and in whose interest.
The information that is required to be
included in the initial disclosure will require the lawyer
to disclose solicitor-client privileged information, including
the identity of the client, anyone that controls or directs
the client’s activities and has a direct interest in the
outcome of the lobbying, whether the client receives government
funding and the amount of the funding, the subject matter
of the lobbying, the government department or institution
being lobbied, and the communication techniques used (including
meetings, telephone calls, grass-roots lobbying, i.e. encouraging
individual members of the public or organizations to communicate
directly with public office holders in an attempt to influence
government decisions). The lawyer is also required to provide
monthly updates of the information contained in the initial
disclosure, as well as monthly returns on communications
made in the context of lobbying. A six-month return is also
required where there is no reporting in the previous five
months.
In order to comply with the Rule on confidentiality,
the lawyer would need to obtain consent from the client
before the lawyer agrees to undertake the lobbying. However,
many charities and non-profits may not wish to attract publicity
to their lobbying activities and therefore may not be willing
to provide the necessary consent to the lawyer. If this
were the case, the lawyer may be put in a difficult situation,
since the lobbying legislation imposes penalties on the
consultant lobbyist for failure to comply with the filing
requirements. As such, the lawyer may have no alternative
but to decline acting for the client.
There may be situations where the client
consents to the lawyer’s initial disclosure and monthly
returns, but refuses to provide consent to the lawyer to
disclose further information requested by the Commissioner
of Lobbying. In that case, the lawyer may have to refrain
from acting further.
E.
CONFLICT OF INTEREST BETWEEN COMPETING CLIENTS
Section 6 of the Code requires consultant
lobbyists not to represent conflicting or competing interests
without the informed consent of those whose interests are
involved. This is similar to the Rule requiring lawyers
to avoid conflicts of interest. Where a law firm is involved
in lobbying a particular branch of the government on behalf
of a charity or non-profit, but also provides advisory services
to the same government department, an issue arises as to
whether the law firm can avoid a conflict of interest in
this situation. In these situations, the Commissioner of
Lobbying recognizes that a conflict of interest can be avoided,
provided that Ethical Walls are put in place in that law
firm that follow the guidelines set out by the Canadian
Bar Association in 1993. This would mean that the law firm
would need to provide for different people, separate files
and internal undertakings to ensure that everyone within
the firm agrees and complies, and to obtain the informed
consent of both clients.
F.
NO CONTINGENT FEES
Although the Rules permit lawyers to
be remunerated based on a contingent fee arrangement, the
federal lobbying legislation expressly prohibits consultant
lobbyists be paid on a contingent basis.
Although some of the issues that must
be addressed by lawyers who lobby for charities and non-profits
are no different from those faced by lawyers who lobby for
for-profit clients, there are special issues that the lawyers
have to address where the clients are charities and non-profits.
Having a general knowledge of the legal framework faced
by these entities (such as corporate governance, the regulatory
system under the Income Tax Act, fundraising and
public relations issues, etc.) would be helpful when assisting
charities and non-profits in their lobbying activities.
