Attention Lobbyists and Registrants: A New Code of Conduct Has Come Into Effect in Canada

A new edition of the Lobbyists’ Code of Conduct (the “Code”) came into effect on July 1, 2023 under Canada’s federal Lobbying Act and replaces the version that has been in force since 2015 (the “2015 Code”). Canadian federal lobbying rules have been expanded to reinforce transparent and ethical lobbying and promote public confidence in federal government institutions and public officials.

The Code is a non-statutory instrument that sets out standards of behavior to complement the Lobbying Act’s registration and disclosure requirements. Individuals who are paid or provided anything of value to communicate with public office holders or arrange meetings with office holders on a client’s behalf (“consultant lobbyists”) and any employees whose lobbying activity for their employer meets the threshold for registration (“in-house lobbyists”) are required by Section 10.3(1) of the Lobbying Act to comply with the Code. Failure to comply may result in an investigation by the federal Commissioner of Lobbying, which can lead to the submission of a public report to Parliament.

Key changes in the Code include rules about conflicts of interest, gifts and hospitality, and disclosure obligations. The Code also introduces definitions for important concepts, including “gifts”, “hospitality”, “lobbying” and “official”, and adds guiding examples that were not present in the 2015 Code. Below we set out some of these important changes.

Sense of Obligation

Lobbying in situations where a public official could reasonably be seen to have a sense of obligation towards the lobbyist was prohibited under the 2015 Code; however, a “sense of obligation” was an undefined concept informing categories of potential conflicts of interest. Now, the term is explicitly defined as “a feeling of owing something (or feeling beholden) to another person.” The Code now provides that lobbying a public official is prohibited where the public official could reasonably be seen to have a “sense of obligation” towards the lobbyist because of the following:

• The lobbyist’s close relationship with the public official;
• The lobbyist’s current or past political work (paid or unpaid) for the benefit of the public official, unless the cooling-off period has expired (see below); or
• Other circumstances not specifically addressed in the Code, which can include past employment of the public official or the employment of a close family member of the public official by the lobbyist’s client or employer.

Political Work and the Cooling-Off Period

“Political work” is now a defined term in the Code and means paid or unpaid work of a political or partisan nature. Unless the applicable cooling-off period has expired, the Code prohibits lobbying of public officials where the public official or their associates could reasonably be seen to have a sense of obligation towards the lobbyist because of political work. The cooling-off period is a 12 or 24 month period after political work has been done for the benefit of a public official.

Whether a 12 or 24 month cooling-off period applies is based on the type of political work – paid or unpaid – performed by the lobbyist for the relevant public official, as follows:

• Leadership or senior political roles performed for the public official or their political party carry a cooling-off period of 24 months;
• Other political activities, such as canvassing, coordinating campaign office logistics, or performing political research or data analytics tasks, incur a cooling-off period of 12 months; and
• Fundraising that could reasonably be seen to be significant to the public official results in a cooling-off period of 12 months or less as determined by the Commissioner on a case-by-case basis.

The Code lists five examples of political participation that are not considered “political work” and therefore do not attract a cooling-off period:

• Attending a fundraising or campaign event;
• Personally displaying election signs or posting digital campaign material during an election period;
• Expressing personal political opinions;
• Making a political contribution in accordance with election law; and
• Being a member of a political party at any level of government in Canada.

Gifts and Hospitality

The Code expands on the rules regarding gifts provided to public officials by lobbyists. While the 2015 Code prohibited the giving or promising of gifts, favours, or other benefits to public officials that the official is not allowed to accept, the Code now permits lobbyists to provide gifts that are tokens of appreciation or promotional items as well as “hospitality” provided such gifts or hospitality are “low-value.” A “gift’ is now defined as “anything of value provided for free, without charge, at a reduced rate, or at less than market value, with no obligation to repay,” and “hospitality” means “food or beverage provided for consumption during an in‑person gathering (e.g., meeting, lobby day, event, reception, etc.).”

“Low-value” means a maximum gift or instance of hospitality value of $40 and an annual cumulative value limit of $200 for all gifts and hospitality provided to the same public official. Value must be assessed at market rates (ignoring discounts, donations, or subsidies) but excludes gratuities and catering, rental or service charges applicable to hospitality. The Commissioner of Lobbying may adjust the value limits on a yearly basis to adjust for inflation. Customary expressions of a lobbyist’s Indigenous cultural tradition or practice are not restricted by these value limits.

To assist with transition and adjustment to the new annual spending limit, lobbyists are allowed to use the Code's full annual limit ($200 per public official) between July 1, 2023 and December 31, 2023 even if they provided gifts and hospitality to the public official prior to July 2023.

Duty of Disclosure

The Code now extends disclosure requirements to grassroots appeals, which includes appeals to members of the public through mass media or by direct communication that seek to persuade those members of the public to communicate directly with a public official in an attempt to place pressure on them to endorse a particular opinion. Lobbyists must now identify their client or employer and the purpose of communications when using grassroots appeals, for example in social media campaign posts.

The Code maintains the responsibility of an organization’s or corporation’s lobbying registrant to inform in-house lobbyists of their duties under the Code and the Lobbying Act, but in-house lobbyists are now required to inform their employer’s lobbying registrant about their lobbying activities.

The Code also preserves the requirement that consultant lobbyists inform their clients of the consultant lobbyist’s obligations under the Code and the Lobbying Act. In addition, consultant lobbyists must now inform their clients that they may have their own obligations under the Code and the Lobbying Act.

Next Steps

Unlike Lobbying Act contraventions, Code violations are not subject to monetary penalties or fines. However, non-compliance with the Code may lead to an investigation by the Commissioner of Lobbying and submission of a public report to Parliament that could result in significant reputational harm. Accordingly, those engaged in lobbying and those who employ or engage lobbyists should familiarize themselves with the changes to the Code. Internal policies that govern lobbying activity should be updated to promote compliance and lobbying registrants should ensure their in-house lobbyists are informed of their updated obligations. Consultant and in-house lobbyists should consult counsel or their organization’s lobbying registrant to clarify whether a close relationship, past or present political work, or other circumstances may now prohibit them from lobbying a particular public official.

Mintz can assist consultant lobbyists and organizations with in-house lobbyists to comply with the Lobbyists’ Code of Conduct and Lobbying Act. Please contact Mintz’s Canadian Employment Practice if you require any guidance or assistance in complying with the Code or any other federal, provincial, or municipal lobbying requirements in Canada.

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