TABLING LETTERS
The Honourable George Furey, Q.C.
Speaker of the Senate
Senate of Canada
Ottawa, Ontario
K1A 0A4
Dear Mr. Speaker:
I am pleased to submit to you my report on the performance of my duties and functions under the Conflict of Interest Act in relation to public office holders for the fiscal year ending March 31, 2018, for tabling in the Senate on June 5, 2018.
This fulfills my obligations under paragraph 90(1)(b) of the Parliament of Canada Act.
Sincerely,
Mario Dion
Conflict of Interest and Ethics Commissioner
The Honourable Geoff Regan, P.C., M.P.
Speaker of the House of Commons
House of Commons
Ottawa, Ontario
K1A 0A6
Dear Mr. Speaker:
I am pleased to submit to you my report on the performance of my duties and functions under the Conflict of Interest Act in relation to public office holders for the fiscal year ending March 31, 2018, for tabling in the House of Commons on June 5, 2018.
This fulfills my obligations under paragraph 90(1)(b) of the Parliament of Canada Act.
Sincerely,
Mario Dion
Conflict of Interest and Ethics Commissioner
I have been working diligently to honour the confidence and trust that the House of Commons placed in me when it confirmed my appointment as Commissioner, effective January 9, 2018, with a mandate to administer the Conflict of Interest Act and the Conflict of Interest Code for Members of the House of Commons.
Conflict of interest regimes are important elements of the Canadian ethical framework, the rules governing the conduct of public office holders and Members of Parliament. I believe ethical behaviour starts at the top, with our elected and appointed officials setting the tone and example that we expect others to follow. They must therefore be held to high standards of conduct. I am very honoured to have the opportunity, as Conflict of Interest and Ethics Commissioner, to contribute to public sector ethics in Canada.
Before I came to the Office, I expected to find it well-organized, and indeed I did. It had sound infrastructure and competent, hardworking staff. I was pleased to discover a situation where I could only hope to improve on what had already been built, in support of my goals of rigour, transparency and predictability. It was, and remains, my intention to maintain those aspects that are already working well and to only make changes
where I believe we can do better. Under my leadership, our Office will continue to administer the Act and the Code efficiently and effectively, while taking a new approach to some aspects of our work.
My staff and I will do everything we can to be as transparent as possible, while respecting confidentiality requirements. This is reflected in a renewed focus on education and outreach in our communications with public office holders, Members of the House of Commons, the media, other stakeholders and Canadians.
In seeking to ensure predictability, I recognize that public office holders and Members need to understand their obligations under both regimes. They need to be able to rely on consistent advice from our Office. They also need to know I will strictly enforce the Act and the Code.
While acknowledging that much of what is reported here reflects the accomplishments of my predecessor, I am proud of all the achievements of our Office in 2017-2018. I look forward to reporting on its work in the years ahead as I continue to fulfill my mandate, drawing on the skills and experience I have gained in over 35 years of public service.
The Office of the Conflict of Interest and Ethics Commissioner was created in July 2007 when the Conflict of Interest Act, passed in 2006 as part of the Federal Accountability Act, came into effect. It is important to understand, however, that significant milestones had already been achieved in the preceding decades.
“Our Office provides independent, rigorous and consistent direction and advice to Members of Parliament and federal public office holders, conducts investigations and, where necessary, makes use of appropriate sanctions in order to ensure full compliance with the Conflict of Interest Code for Members of the House of Commons and the Conflict of Interest Act.”
In February 2018, I developed a new mission statement in support of the mandate of our Office, which is to administer the Conflict of Interest Act and the Conflict of Interest Code for Members of the House of Commons. The new mission statement lays out the approach that we will be taking under my leadership.
It strives to summarize the key parts of a complex set of ideas in a few words.
Our Office is an independent institution that serves an important purpose: to enhance Canadians’ trust and confidence in the Members of Parliament they elected and in the public office holders appointed by the government. It is responsible for administering two regimes that are similar but distinct and has various means of doing so, some of them preventive, others reactive. Each word of the statement is carefully chosen to refer to a specific aspect of the Act or the Code or, more broadly, an intent common to both regimes.
The three pillars of our approach are information, advice and sanctions.
We inform public office holders and Members of their obligations under the Act and the Code, through enhanced education and outreach initiatives. We also keep Parliament apprised of our activities, through our reports and through my appearances before parliamentary committees.
When public office holders and Members seek advice from our Office, we provide them with clear, consistent direction. We advise them on how to comply not only with the rules themselves, but with the spirit in which they were written.
I will enforce the Act and the Code, and by doing so, investigate possible contraventions of both regimes and make use of appropriate sanctions when contraventions are found.
The Conflict of Interest Act applies to ministers, parliamentary secretaries, the Chief Electoral Officer, the Parliamentary Budget Officer, ministerial staff, ministerial advisers and most other Governor-in-Council appointees.
It sets out a number of obligations aimed at preventing conflicts between private and public interests and prohibits various actions that could give rise to such conflicts.
Ministers and parliamentary secretaries are also subject to the Conflict of Interest Code for Members of the House of Commons.
This annual report focuses solely on the 2,461 public office holders who are subject to the Act.
All public office holders are subject to the Act’s core set of conflict of interest and post-employment rules.
Some, referred to simply as public office holders, are subject only to those general rules. They include part-time members of federal boards, commissions and administrative tribunals, and some part-time ministerial staff.
Others, referred to as reporting public office holders, are also subject to the Act’s reporting and public disclosure provisions and its prohibitions against engaging in outside activities and holding controlled assets. They include ministers and parliamentary secretaries, ministerial staff and full-time Governor-in-Council appointees such as deputy ministers, heads of Crown corporations and members of federal boards.
Graph 1—Types of public office holders subject to Conflict of Interest Act
The Act’s post-employment rules apply to public office holders after they leave public office. Some rules apply to all former public office holders for life, and others apply only to former reporting public office holders during a one- or two-year cooling-off period.
Graph 2—Public office holders
Graphs 3—Turnover among public office holders
Administering the Conflict of Interest Act involves a range of activities. They include informing public office holders about their obligations under the Act immediately upon appointment, providing confidential advice, receiving and reviewing confidential disclosures and public declarations, maintaining a public registry of publicly declarable information, issuing administrative monetary penalties when appropriate, investigating possible contraventions and reporting to Parliament. These and other activities are supported by our Office infrastructure.
Our Office has ongoing contact with public office holders starting around the time of their appointment and continuing, in some cases, even after they have left public office.
Our Office works closely with public office holders to help them achieve compliance with the Act within 120 days after their appointment, and to help them maintain compliance during and after their terms of office.
Graph 4—Information given to public office holders
The first step is a confidential disclosure of detailed information on assets, liabilities, outside activities and other interests. It must be submitted to our Office no later than 60 days after appointment.
Our Office then reviews each confidential disclosure and advises the reporting public office holder of the measures needed to comply with the Act. Compliance measures may include the public disclosure of certain information, the divestment of controlled assets through a blind trust or arm’s-length sale, the establishment of conflict of interest screens, and recusals. Most compliance measures are identified in the public registry, but some are not made public for privacy reasons relating to reporting public office holders’ family members or because they fall within an exception referred to in the Act.
By way of illustration, in 2017-2018, our Office established 28 special compliance measures and required 56 reporting public office holders to divest their controlled assets.
The initial compliance process is complete when the reporting public office holder signs a statement summarizing the steps he or she has taken to comply with the Act.
Reporting public office holders also face a number of ongoing reporting requirements throughout their term of office:
- They must review their compliance arrangements with advisors from our Office every year and update information previously disclosed to our Office. This is called an annual review.
- They must inform us of any material change to their circumstances within 30 days of the change.
- They must publicly declare any acceptable gifts with a value of $200 or more within 30 days after acceptance. They must forfeit any gifts received as an expression of courtesy or protocol valued at $1,000 or more and publicly declare the forfeiture.
- Ministers and parliamentary secretaries must publicly declare, within 30 days, any travel on non-commercial chartered or private aircraft accepted for themselves, their families or ministerial staff or advisers. They can only accept such travel if required in their capacity as public office holders, in exceptional circumstances or with the prior approval of the Conflict of Interest and Ethics Commissioner.
The Act establishes deadlines for confidential disclosures and public declarations, and the vast majority of reporting public office holders meet those deadlines. In some cases, deadlines are missed because of delays in our Office being notified of appointments or because of other circumstances beyond the reporting public office holders’ control.
In cases where public office holders are not meeting their obligations under the Act, I can issue compliance orders to bring them into compliance. In 2017-2018, four compliance orders were issued to require public office holders to return the necessary documents to complete their annual review process. One compliance order was issued to require a public office holder to divest controlled assets.
Graph 5—Percentage of new reporting public office holders who missed 60-day filing deadline by one week or more
Graph 6—Percentage of new reporting public office holders who missed 120-day filing deadline by one week or more
Public office holders frequently seek advice from our Office during or after their term of office.
In addition to providing public office holders with direction on how to deal with various situations, we issue, update and disseminate a variety of informational materials about the requirements of the Act. We send an annual letter to public office holders who do not have reporting obligations and post detailed information about public office holders’ obligations on our website. We also give presentations to offices and organizations whose members are subject to the Act. In 2017-2018, our Office was asked to give 22 such presentations.
Graph 7—Number of instances in which public office holders sought direction and advice
Graph 8—Types of direction and advice given to public office holders in 2017-2018
Upon taking office, I signalled that education and outreach would be a key focus of my approach in order to help public office holders understand and meet their obligations under the Conflict of Interest Act.
We will leverage modern technology to implement education and outreach initiatives. With a greater presence on Twitter, we have already begun making more use of the possibilities this information-sharing platform has to offer. We will make available new options such as webinars and online
videos for the information sessions offered to public office holders and Members of Parliament at the start of their terms and during their time in office. By offering methods that accommodate their busy schedules, I am confident that we will be able to reach many more public office holders.
Our Office undertakes a range of initiatives aimed at educating and informing other stakeholders and the Canadian public about the conflict of interest regimes and the role of our Office in administering them. It also facilitates my reporting to Parliament and exchanges information with other jurisdictions.
We received 3,073 communications from the public and the media in 2017-2018. This represents a 29% increase in volume compared to the previous year.
In the interests of transparency, and while guaranteeing that confidentiality requirements will be strictly met, I believe Canadians should receive as much information as possible about what our Office is doing. The media also play a role in promoting awareness of the mandate and activities of our Office.
Graph 9—Communications from the public
Graph 10—Requests for information and interviews from the media
Our Office recognizes the importance of responding to requests for advice or information from public office holders, members of the public and the media in a timely manner, and has established service standards to help us do so.
The target for achieving those service standards was set at 75%.
Results
There were six appearances before parliamentary committees in relation to our Office and its work in 2017-2018:
- House of Commons Standing Committee on Access to Information, Privacy and Ethics, regarding:
- Main Estimates 2017-2018, May 2, 2017
- Certificate of nomination of Mario Dion to position of Conflict of Interest and Ethics Commissioner, December 12, 2017
- The Trudeau Report, January 10, 2018
- Review of the Conflict of Interest Act, February 8, 2018
- House of Commons Standing Committee on Procedure and House Affairs, regarding:
- Bill C-50 amending the Canada Elections Act (political financing), October 17, 2017
- House of Commons Standing Committee on Official Languages, regarding:
- Air Canada’s implementation of the Official Languages Act, October 17, 2017
I can issue administrative monetary penalties for failures to meet certain reporting requirements of the Conflict of Interest Act within the established deadlines, including confidential report filings, disclosures of material changes and firm offers of outside employment, as well as their acceptance, and public declarations of gifts and recusals. Sixteen administrative monetary penalties were imposed on public office holders in 2017-2018.
When a penalty is issued, the Act requires that the Commissioner make public the nature of the violation, the name of the public office holder and the amount of the penalty. This has been done to date by means of the public registry on our Office’s website. Effective April 1, 2018, I will enhance the deterrent effect of administrative monetary penalties by announcing on Twitter any penalties imposed under the Act as soon as they are added to the public registry.
Graph 11—Number of administrative monetary penalties issued
Graph 12—Administrative monetary penalties issued in 2017-2018
I can also conduct investigations, called examinations, of possible contraventions of the Act. All examination reports are made public.
I can conduct examinations at the request of a Senator or Member of the House of Commons who provides reasonable grounds to believe that the Act has been contravened. I also have the discretion to self-initiate an examination if I have reason to believe the Act has been contravened, based on information that comes to the attention of our Office in various ways, such as media reports and complaints from members of the public.
When our Office receives information about a possible contravention of the Act, we open a case file. In each instance, we review the information to determine whether the concern raised falls within the mandate of our Office and, if it does, whether there is reason to believe that a contravention of the Act has occurred. Some of these initial reviews lead to examinations, and in other cases, an examination is not found to be warranted and the files are closed.
Graph 13—Concerns reviewed by our Office
Graph 14—Source of concerns raised
Graph 15—Persons who are the subject of concerns raised
Graph 16—Nature of concerns raised
In 2017-2018, our Office issued three investigation reports:
In The Toews Report, issued on April 21, 2017, the Honourable Vic Toews, former Minister of Public Safety and Senior Regional Minister for Manitoba, was found to have contravened some of his post-employment obligations under the Act. In one instance, less than two years after leaving public office, Mr. Toews, through a company owned by his spouse, provided consulting services on a number of issues for the Norway House Cree Nation, a group with which he had had direct and significant official dealings, relating to government business, during his last year in public office. As a result, Mr. Toews was found to have contravened subsection 35(1) of the Act. In a second instance, Mr. Toews, when he was President of the Treasury Board in 2007, had approved a transfer of lands. The decision was subsequently challenged in court by several First Nations, including the Peguis First Nation. After leaving public office, Mr. Toews acted on behalf of the Peguis First Nation by providing strategic advice to their legal counsel and by meeting with municipal and provincial officials on the ongoing court matter. In acting for or on behalf of a party that was seeking relief against a decision in which he had been involved as a minister of the Crown, Mr. Toews was found to be in contravention of subsection 34(1).
In The Wright Report, issued on May 25, 2017, Mr. Nigel Wright, former Chief of Staff to former Prime Minister Stephen Harper, was found to have contravened two of the Act’s conflict of interest rules while in public office. In providing funds to Senator Mike Duffy so he could pay back over $90,000 in claimed living expenses and managing the issue in the context of his responsibility as Chief of Staff to the Prime Minister, Mr. Wright was in contravention of subsection 6(1) of the Act. By asking if the Conservative Fund Canada could provide funds for the reimbursement, Mr. Wright was in contravention of section 9, which prohibits public office holders from using their position as public office holders to seek to influence others in order to improperly further the private interests of a third party.
In The Trudeau Report, issued on December 20, 2017, the Right Honourable Justin Trudeau, Prime Minister of Canada, was found to have contravened the Act in accepting gifts of vacations, including private travel, on behalf of himself and his family, on a private island owned by the Aga Khan, who chairs institutions that have official dealings with the Government of Canada. While Mr. Trudeau and the Aga Khan had a relationship based on a family connection, it could not be considered to be a friendship for the purposes of the Act. As such, the gifts of vacations should not have been accepted as they could reasonably be seen to have been given to influence Mr. Trudeau, resulting in a contravention of section 11 of the Act. Having accepted the gifts of vacations, Mr. Trudeau should have recused himself from any dealings relating to the Aga Khan and his institutions. As a result, Mr. Trudeau was found to have contravened sections 5 and 21. By accepting private air travel to the Aga Khan’s island, Mr. Trudeau was found to have contravened section 12.
Our Office continued to work with counterparts in Canada and other countries in 2017-2018, exchanging information about conflict of interest rules and practices and discussing related issues in order to stay abreast of issues and developments in the field.
In September, our Office was represented at the annual meeting of the Canadian Conflict of Interest Network (CCOIN), held in Charlottetown.
Created in 1992, CCOIN is made up of conflict of interest commissioners at the federal level and from all Canadian provinces and territories. Our Office has coordinated information-gathering for CCOIN since 2010.
In December, members of our Office attended the annual conference of the Council on Governmental Ethics Laws (COGEL), in Toronto. COGEL is a U.S.-based, international not-for-profit organization of government ethics practitioners of which our Office is a member.
In March, I signed a memorandum of understanding with the Commissioner of Lobbying to cooperate on education and outreach. Among other activities, we will hold joint information sessions, including webinars, for individuals affected by the work of both offices.
As part of our international outreach, we responded to information requests from Australia, Indonesia, Ireland, Kazakhstan, South Korea, the Group of States against Corruption (GRECO) and ParlAmericas.
We have adopted a Strategic Plan for 2018-2021 that sets the course for our Office for the next three years and beyond. It will help guide our priorities and align our activities in light of our increasing workload. (Please refer to Significant Trends bellow.)
Our strategic plan, which is published on our Office’s website, identifies three key priorities and the means by which we will achieve them:
- Build and improve communications and outreach processes
- Modernize technology and information management structures
- Maintain operational excellence
Progress against our strategic plan will be continually monitored and I will report on it in my future annual reports to Parliament.
The beginning of my mandate was an ideal time to rethink the brand identity of our Office, which had just entered its second decade, in support of our mission. I also wanted to introduce a modern look and feel while honouring our Office’s existing standards of professionalism.
My staff and I partnered with a creative firm on the development of a brand identity that I believe offers an effective visual representation of our mission. It communicates the independent and impartial character of our Office, the nature of the work we do and the way we do it—with integrity, rigour and consistency.
Branding elements include three complementary combinations of colours and designs that represent various facets of our identity, including our role in helping safeguard the public interest and our forward-looking approach. All feature the Canada Coat of Arms in recognition of my status as an Officer of the House of Commons.
I have established a Quality Workplace Promotion Committee whose goal is to promote the well-being of our employees. It will support a healthy workplace and implement initiatives to sensitize our staff on issues affecting the work environment, such as diversity, inclusion, mental health and wellness, professional development, employee and management engagement, and the importance of a respectful workplace.
As I noted earlier, the administration of the conflict of interest regimes is supported by the infrastructure of our Office. It has a sound internal management framework in place to ensure the prudent stewardship of public funds, the safeguarding of public assets and the effective, efficient and economical use of resources.
Because I am an independent Officer of the House of Commons and our Office is a parliamentary entity, we are not generally subject to legislation governing the administration of the public service or to Treasury Board policies and guidelines. We try to ensure that our resource management practices are, to the greatest extent possible, consistent with those found in the public service and in Parliament. We also look at various policies and practices of other parliamentary entities and generally follow what they do, unless there is a valid reason for our Office to take a different approach.
Our Office’s financial statements are audited each year by an independent external auditor and no concerns have been raised. A Financial Resources Summary appended to this report outlines our financial information for the 2017-2018 fiscal year.
In support of our strategic objective of modernizing technology and information management structures, in 2017-2018 we replaced our financial management system and started working to upgrade our electronic case management system.
We continued to make our operations more efficient in 2017-2018 by implementing a paperless office initiative and expanding our use of a document management system that had been piloted as a replacement of our Office’s shared electronic drive.
Although it is always difficult to predict with any accuracy what important changes will occur that will affect the operations of our Office, I believe it is nimble enough to reallocate its resources to meet emerging long-term trends. At this moment, we observe a marked increase in relation to four distinct areas of our operations, as discussed earlier. It is also possible that other things will happen that we are not in a position to predict at this time.
Our Office is facing several trends that have contributed to a significant increase in our workload.
We have received a growing number of requests for advice from public office holders, including requests for advice about the acceptability of gifts. While dealing with more requests takes more resources, this trend is indicative, I believe, of a desire on the part of public office holders to take steps to comply with the Conflict of Interest Act.
Graph 17—Transactions with public office holders
Graph 18—Requests for advice from public office holders
I intend to review our guidelines affecting a number of areas, such as gifts, in order to simplify them as much as possible.
Graph 19—Instances of advice and direction relating to gifts
Data on requests relating to gifts is only available as of 2010-2011
There has also been an increase in the number of communications from members of the public and requests for information or interviews from the media.
Graph 20—Communications from the public
Graph 21—Requests for information from the media
When public office holders seek advice from our Office on how to comply with the Conflict of Interest Act, it is important that the advice they receive be clear and consistent.
I recognize that there is no one-size-fits-all approach that can apply to every situation or even, in some cases, to situations that may appear similar, and that the advice provided by our Office must take into account the specific circumstances of individual public office holders. I acknowledge, however, the importance of ensuring consistency, in order to reduce uncertainty and confusion, and to ensure that public office holders feel confident the advice they receive is fair and appropriate. Fairness also requires that different public office holders in the same situation receive the same advice over time.
One way I hope to address this challenge is by continuing to develop internal tools to record my interpretations of the Act and make them accessible to employees of our Office. I will also maintain an ongoing dialogue with those staff members who provide advice to public office holders.
One of my key roles as Commissioner is to interpret the Act. Over the coming months, our Office will review all of the informational materials that have been published on our website for the guidance of public office holders, in order to ensure that they adequately reflect current interpretations of various aspects of the Act.
I recognize that, when our Office conducts an examination, the current or former public office holder who is the subject of the examination may experience uncertainty and concern. This is particularly true in cases where the identity of the individual is public knowledge, as this can lead to speculation and possible reputational damage, even when the individual is eventually found not to have contravened the Conflict of Interest Act.
I will ensure that our Office conducts examinations with due dispatch while still conducting them thoroughly, with proper diligence and being careful to respect procedural fairness.
BETTER TARGETING EDUCATION AND OUTREACH
The individuals subject to the Conflict of Interest Act do not constitute a homogenous group. In fact, there are three distinct groups of public office holders: ministers and parliamentary secretaries, ministerial staff and Governor-in-Council appointees.
The types of work, experiences, levels of responsibility and degrees of influence vary greatly among these groups, which include senior ministers as well as summer students.
Because of their diversity, our Office must adapt its outreach and communications tools to the particular characteristics and needs of each group, in order to ensure they are as effective as possible.
As mentioned earlier, we are also moving away from a traditional “classroom” approach. In 2018-2019, we will develop webinars, online videos and other products using new media in order to inform and educate public office holders about their obligations under the Act.
OPERATING WITHIN A STATIC BUDGET
I am impressed by the fact that even though our Office’s workload has increased substantially in its almost eleven years of operation and we have faced higher technology costs and other inflationary pressures, our Office has maintained an annual operating budget that is no higher today than it was in its first full year of operation.
Graph 22—Budget
In its earlier years, our Office had relatively low expenditures compared with its allotted budget, which gave it room to build an effective organization. However, our Office today has little flexibility with which to meet unforeseen demands, such as a marked increase in investigation requests.
Although we remain committed to using our resources effectively, efficiently and economically, it does not appear that meeting the growing demands on our Office at current funding levels will be possible over the course of my seven-year mandate.
MAXIMIZING TRANSPARENCY
I am committed to making our Office and its work as transparent as possible. This is a challenge because of the strict confidentiality requirements set out in the Conflict of Interest Act, particularly regarding examinations and advice provided to public office holders.
There may also be other valid reasons in some cases for not divulging information even when we are permitted to do so. For example, I have chosen not to identify the subjects of several ongoing examinations at this time in order to safeguard their privacy against the possibility of undue reputational damage. If those examinations proceed, we will report publicly on the findings.
While respecting these constraints and other considerations, we will be as forthcoming with Parliament, the media and the public as we are permitted to be under the Act.
FINANCIAL RESOURCES SUMMARY
The budget process for the Office of the Conflict of Interest and Ethics Commissioner is established in the Parliament of Canada Act. The Speaker of the House considers the estimates for the Office and transmits them to the President of the Treasury Board for inclusion in the estimates of the Government of Canada. The Standing Committee on Access to Information, Privacy and Ethics has within its mandate the role to review and report on the effectiveness, management and operations together with the operational and expenditure plans relating to the Office.
Complete audited financial statements appear on our website.
