• Explainer: Lobbying in Canada

    Explainer: Lobbying in Canada

    What is Lobbying? 

    In Canada, lobbying – legally influencing policy or legislative action – is regulated through the 1985 Lobbying Act. The Act applies to individuals and organizations who communicate with “public office holders” (any government officer or employee) to make or revise new bills, or direct federal funding to specific issues. Organizations that may engage in lobbying include private businesses, provincial or municipal governments, trade unions, and non-governmental organizations (NGOs). Although the focus of this article is on the federal process, lobbying can also be done at the provincial and municipal levels. 

    There are two types of lobbyists: consultant and in-house. Consultant lobbyists are third-party actors hired by clients (individuals, companies, or organizations) to persuade public office holders, whereas in-house lobbyists are employees of corporations and organizations that push for policy changes. Both consultant and in-house lobbyists must enroll in the registry of lobbyists, which is one important safeguard that maintains transparency throughout this process. Additionally, they must disclose all communications with public office holders regarding the giving of grants and contracts, new proposals or changes to bills, and other lobbying activities. Organizations are required to register an employees’ lobbying activities when they surpass 20% of their paid duties, meaning that 20% or more of the employee’s work tasks are dedicated to lobbying. In this case, in-house lobbyists would be subjected to the “20% rule.”

    Sanctions for Violating Lobbying Laws

    In Canada, the federal government has a few options for penalizing individuals who violate the Lobbying Act. They can publish the names of non-cooperative individuals and ban them from lobbying activities for a maximum of two years. Those who are convicted of violating the Act can face $50,000 fines and/or six months in prison. It should be noted that many politicians and even the Commissioner of Lobbying of Canada, Nancy Bélanger, acknowledged that more could be done to enforce the Act. 

    Ethical Issues and Misconceptions

    Lobbying can present ethical issues: by leveraging their networks and status, wealthy individuals, organizations, and corporations are able to silence those with lesser means and get their own political agendas prioritized. There is a common fear that lobbying can be a veil for bribery if a public official accepts gifts, or gains financially, in exchange for a specific policy change. While these situations can quickly turn people away from supporting lobbying, they are also rooted in common misconceptions. When done correctly and legally, lobbying can be an excellent way for grassroots organizations to influence public office holders to push forward a specific cause, such as environmental activism. There are non-partisan groups, such as Citizens’ Climate Lobby (CCL) Canada, that push for policies helping to reduce carbon emissions across the country. According to their website, CCL Canada pushed the federal government to enact “the first carbon fee and dividend policy on the planet.” They continue to lobby for environmental policies in Canada. 

    On the flip side, lobbying in Canada has presented a few missteps within the last few years. The WE Charity Scandal is a good example of this grey area. In June 2020, the Canadian government announced a $900-million Canadian student service grant that would be administered by the WE Charity. Through the program, students could get volunteer experience during the pandemic and would receive $1,000-$5,000 in grant funding in exchange for hours worked. 

    Issues arose after the contract was awarded to the WE Charity, due to its close relationship with Prime Minister Trudeau and his family. Both Trudeau and his mother Margaret participated as speakers in the charity’s WE day events, receiving thousands in expenses and fees. Trudeau’s brother Alexandre and wife Sophie Gregoire Trudeau were “reimbursed more than $200,000 for appearances at WE events.” After significant controversy, Trudeau’s finance minister Bill Morneau resigned and the contract was canceled. Despite safeguards put in place by the Act, an ethical violation had occurred. 

    In August 2020, WE Charity’s executive director Dalal Al-Waheidi announced it was “[submitting its] registration with the federal lobbying registry,” retroactively submitting 60 reports of contacts with public office holders. Al-Waheidi argued that only 1-3% of the charity’s budget and activities were dedicated to corresponding with the government, which is under the 20% rule. 

    Later commenting on the WE Charity scandal, NDP MP Charlie Angus exclaimed, “You have to wonder and ask yourself in Canada, what does it take to actually be found guilty of breaching the lobbying act in 2021?”

    Lobbying in the Era of COVID-19

    In 2020, as the House of Commons made decisions on where to direct vital pandemic aid, there were a large number of contacts with the federal government. Compared to 2019, the 54% increase in lobbying contacts highlighted a need for significant policy changes to maintain fairness and clarity. Bélanger made 11 recommendations to change the Act in a 2021 report, including the elimination of the 20% rule. She argued that this rule is inconvenient for employers that have to keep track of each employee’s activity. It can also create loopholes and grey areas, enabling ethical misconduct like the WE Charity scandal. The change would automatically require all employees to register if they partake in any lobbying activities. Additionally, Bélanger made recommendations to add more sanctions against non-compliance, such as financial penalties and additional training. 

    Future Changes

    While these amendments don’t seem particularly exciting, they can all impact the level of transparency within government and the democratic process as a whole. Ensuring that the Act is followed by all organizations and corporations is incredibly important for avoiding future instances of corruption or unethical conduct. 

    When regulated, lobbying is an excellent tool and a democratic right for Canadians. With more focus on concerns such as climate change, lobbying can drive NGOs to influence government decisions on issues that they would otherwise overlook. Still, the Lobbying Act needs revision to ensure better transparency within the Canadian federal government.

    Edited by Chase Kelliher

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    Latest Posts

    Explainer: Lobbying in Canada

    Lobbying allows people to influence politicians and public officials to take legislative action, but is it more of a democratic tool or a means for corruption?

    Read More »