79-3E
CONFLICT-OF-INTEREST
RULES
FOR FEDERAL LEGISLATORS
Prepared by:
Margaret Young
Law and Government Division
Revised 23 October 2000
TABLE
OF CONTENTS
ISSUE
DEFINITION
BACKGROUND AND ANALYSIS
A. Techniques of Control
B. Types of Interests
C. Statutory and Parliamentary Rules
D. Conflict of Interest and Post-Employment
Code for Public Office Holders, 1994
E. Report of the Task Force on Conflict of
Interest, 1984
F. Recommendations of the Parker
Commission
PARLIAMENTARY ACTION
A. Register of Members' Interests
B. Members of the Senate and House of Commons
Conflict of Interests Act
C. The Special Joint Committee on Conflict
of Interests
CHRONOLOGY
SELECTED
REFERENCES
CONFLICT-OF-INTEREST
RULES FOR FEDERAL LEGISLATORS*
ISSUE DEFINITION
Conflict of interest is
one aspect of public-sector ethics, and Canadian legislatures and governments
have developed legislation and codes of conduct that show a wide variety
of approaches to the issue. This paper will focus on the most important
developments at the federal level. Although the emphasis here is on federal
legislators, other federal public officials such as public-service
workers and judges as well as members of administrative agencies, tribunals
and Crown corporations are also affected by conflict-of-interest
rules.
Our society expects that
individuals should be as free as possible to pursue their economic goals,
but also expects that those in positions of public trust should not act
in their public capacity on matters in which they have a personal economic
interest. Even an appearance of a conflict affects the publics confidence
in office holders generally.
Some suggest that Parliament
should enact more stringent rules covering conflict of interest. Others
are concerned that such a step would deter qualified or desirable people
from running for public office. The difficulty of striking a balance,
while also protecting the privacy interests of legislators, may explain
why all four bills on this issue presented in the 33rd and 34th Parliament
died on the Order Paper, and why a Parliamentary Committee Report
in the subsequent Parliament was not acted upon.
BACKGROUND AND ANALYSIS
There are a number of possible
definitions of conflict of interest. Mr. Justice W.D. Parker, who presided
at the inquiry into conflict-of-interest allegations against Sinclair
Stevens, defined a real conflict of interest as a "situation
in which a minister of the Crown has knowledge of a private economic interest
that is sufficient to influence the exercise of his or her public duties
and responsibilities." A potential conflict of interest, on
the other hand, exists where a minister "finds himself or herself
in a situation in which the existence of some private economic interest
could influence the exercise of his or her public duties or responsibilities
... provided that he or she has not yet exercised such duty or responsibility."
A potential conflict becomes a real conflict where the Minister does not
dispose of relevant assets or withdraw from certain public duties or decisions.
Mr. Justice Parker also talked about an apparent conflict of interest,
which "exists when there is a reasonable apprehension, which reasonably
well-informed persons could properly have, that a conflict of interest
exists," even if, in fact, there is neither a potential nor a real
conflict. Some definitions concentrate on "decision-making"
rather than "situations," while some regimes prefer to leave
the term undefined.
The principles underlying
conflict-of-interest rules are impartiality and integrity: a decision-maker
cannot be perceived as being impartial and acting with integrity if he
or she could derive a personal benefit from a decision. Public confidence
in governmental institutions is closely allied to public belief that decisions
will be taken and laws will be enacted, and subsequently applied and administered,
fairly and objectively, free of personal biases and considerations. That
said, it is not clear how far the principle of impartiality extends, particularly
when partisan politics are involved. Nor is it clear that the personal
interests involved are necessarily purely economic ones.
Today, governments intervene
in virtually all sectors of the economy, either through direct control
or through regulatory agencies, safety and health legislation, tariff
and tax policies, or federal subsidies. Thus, it is not unusual for legislation
introduced in Parliament to affect the general economic interests of Members
of Parliament in some way.
Some conflicts are unavoidable.
An inherent conflict arises out of the position of the Parliamentarian
as an individual in society, i.e., as a homeowner, parent or consumer.
Parliament continually deals with legislation affecting these interests
and, as the Parliamentarian is affected like other citizens, there is
a low risk of an adverse consequence. Also unavoidable is the representative
interest conflict which arises when Members share personal interests,
for example in farming, fishing and resource development, with the constituency
electing them. Other interests, however, may in some cases substantially
affect the independence of a legislator, particularly when he or she enters
Cabinet. Family businesses pose problems, but so do a wide range of assets,
liabilities and financial interests. Conflict-of-interest rules generally
deal with these latter kinds of interests.
To what extent, then, should
a Parliamentarian be able to retain personal economic and other interests?
The rules must not be so stringent as to discourage persons of ability
and experience from entering public life, yet must be stringent enough
to deter unethical practices and maintain the good reputation of Parliament
and its Members. The rules also must make some distinctions between Private
Members and Senators, who individually may have little influence over
the decision-making process, and Cabinet Ministers and their staff.
A. Techniques of Control
A number of methods are
available to control conflicts of interest.
-
Disclosure
requires that legislators reveal their assets, typically first confidentially
to a designated official, and then publicly so that a personal interest
becomes public knowledge and Parliamentarians are inhibited from acting
for their personal benefit. Public disclosure also informs the legislators
constituents and colleagues of the situation so that they can consider
its implications.
-
Avoidance
requires legislators to divest themselves of interests or relationships
that might impair their judgement, either by a sale at arms
length or by use of a trust administered by a trustee independently
of the legislator; in the latter case, it must be ensured that the
trust is beyond the Parliamentarians control.
Typically, conflict-of-interest
regimes incorporate a combination of the above controls.
B. Types of Interests
The more common types of
interests that can put a legislator into a conflict situation are outlined
below.
Investments:
Investments usually considered unlikely to give rise to a conflict of
interest include government bonds, guaranteed investment certificates
and open-ended mutual funds. Even here, conflicts may arise; for example,
the Commissioner in Ontario has ruled that the Treasurer should not hold
provincial bonds because he is responsible for setting the interest rates.
Which investments that present conflicts are suitable for placing in a
trust? Should the value of any retained interests be disclosed? Should
shareholdings of Parliamentarians be restricted to a percentage of total
issued shares in a company? Any arbitrary percentage set might be insignificant
where there were only a few shareholders, but could result in effective
control of a company if shares were widely held.
Debts:
Liabilities, as well as assets, are potential sources of conflict, because
the creditors of persons in public office may give the appearance of having
influence over their debtors.
Corporate Positions:
A legislator may find that Parliament is considering measures that would
affect him or her as an officer, director or employee of a company or
affect the interests of the company. As a director, he or she is required
to act in the best interests of the company, yet as a legislator he or
she is required to act in the best interests of the public.
Outside Employment:
To what extent should Parliamentarians be able to carry on their law practices,
businesses, or other types of employment? Cabinet Ministers are now prohibited
from such activities. Should there be a restriction on the amount of money
that can be earned from outside employment? Parliamentarians dealing with
laws that may affect their business clients could be put in a position
opposed to the best interests of the public. A legislator might attract
more clients if the latter believed he or she would increase their influence
with the federal government. Should Parliamentarians be able to profit
in this way from their status?
Lobbying:
Dealing with government officials on behalf of constituents is a normal
function of legislators. What about legislators who use their position
to further personal interests or who are paid to act on behalf of others?
Should they be able to make representations or appear before government
boards or commissions or federal courts in their personal capacity or
would the appearance of influence be too strong? What is the position
of legislators who receive indirect benefits as lawyers, employees, or
financial advisors of persons or companies for whom they act? Is it sufficient
for legislators to reveal their interests to government officials with
whom they correspond or must they avoid any contact with such persons
and bodies except in the course of their duties as representatives of
their constituents?
Government Contracts
and Activities: Should legislators
be able to participate with other Canadians in government programs or
would the appearance of influence be too strong and the possibility of
conflict too high? To what extent should Parliamentarians be allowed to
own or invest in businesses that have government contracts?
Gifts and Honoraria:
Should legislators be permitted to accept free vacation trips or other
gifts from acquaintances, businesses or foreign governments? Should there
be a restriction on the amount that can be accepted? Should disclosure
be the only requirement? "Honoraria" can be disguised gifts.
Inside Information:
Are controls necessary to deter legislators from using for personal advantage
any information that comes to them in their official capacity?
Spouse and Dependent
Children: To what extent should
the above interests be controlled if they are held by those with close
family ties to the Parliamentarian? The legislator is as likely to be
influenced by family interests as by his or her own.
C. Statutory and Parliamentary Rules
Most conflict-of-interest
rules for federal legislators are found in three Acts of Parliament (the
Criminal Code, the Parliament of Canada Act and the Canada
Elections Act) and in the Standing Orders of the House of Commons
and Rules of the Senate. (The Conflict of Interest and Post-Employment
Code for Public Office Holders will be discussed below.)
Bribery, the most extreme
form of conflict of interest, is a criminal offence. The Criminal Code
provides for 14 years imprisonment for a Parliamentarian who accepts
or attempts to obtain any form of valuable consideration for doing or
omitting to do anything in his or her official capacity. In addition,
Standing Order 23(1) of the House of Commons considers it a high
crime and misdemeanour that tends to subvert the Constitution if a Member
is offered any "advantage" for promoting any matter before Parliament.
The Parliament of Canada Act prohibits a Parliamentarian from receiving
outside compensation for services rendered on any matter before the House,
the Senate or their committees. The Act excludes persons with remunerated
employment in the federal government and certain officials at the provincial
level from being eligible as Members of the House of Commons, although
there are exceptions. The Parliament of Canada Act makes a Member
of a provincial legislative assembly ineligible to be a Member of the
House of Commons. The Canada Elections Act disqualifies the above
office holders from candidacy for the House of Commons as well as Members
of the Council of the Northwest Territories, the Council of the Yukon
Territory or the Legislative Assembly of Nunavut, and certain office holders
who are not entitled to vote.
The Parliament of Canada
Act also provides that a person is not eligible to be a Member of
the House of Commons if he or she holds a government contract or agreement,
either directly or indirectly, in which public money is to be paid. A
similar prohibition applies to Senators. It is possible that an individual
who receives no public funds but receives a benefit in another form from
the contract might not be caught by this section, but this is by no means
clear. In addition, if a Parliamentarian is a shareholder of an incorporated
company that has a contract with the government, the prohibition is not
applicable unless the contract involves the building of a public work.
This would seem to permit the incorporation of business interests, thereby
avoiding the prohibition and representing a significant loophole. Moreover,
government contracts for public works today form only a small portion
of the total number of federal contracts. Also excepted, for a 12-month
period, are contracts that devolve upon a Parliamentarian by descent,
limitation or by marriage or for which the Parliamentarian is an executor.
Another section of the Parliament
of Canada Act, however, requires a provision in every government contract
that no Member of the House of Commons be admitted to any share or part
of such contract, or to any benefit arising therefrom. This would suggest
that a Member cannot be party to a federal government contract if he or
she receives any kind of benefit whatsoever, whether or not public money
is spent or the contract is with a corporation.
Currently, there is no requirement
for Parliamentarians to disclose financial interests generally. However,
Standing Order 21 of the House of Commons provides that Members are
not entitled to vote on questions in which they have direct pecuniary
interests; if they do so, their votes will be disallowed. A similar provision
is found in the Senate Rules. Moreover, Senators who have a pecuniary
interest in a matter referred to a select committee cannot sit on that
committee. No rules diminish Parliamentarians right to participate
in debate.
House of Commons Standing
Order 22 requires Members to register all visits that they make outside
Canada, arising from or relating to their membership in the House of Commons,
where the cost of any such travel is not paid for by the Member, a recognized
association or political party, or the government. The name of the person
or group who pays for such travel must be disclosed, with the information
maintained in a public registry by the Clerk of the House. There are no
comparable provisions for Senators.
D. Conflict of Interest and Post-Employment
Code for Public Office Holders, 1994
This Code, on the
order of the Prime Minister, applies to Cabinet Ministers, Parliamentary
Secretaries and other senior public office holders. First introduced by
the federal government in September 1985, it has been slightly modified
and has continued in force under successive governments. It requires that,
on appointment to the included offices, the office holders are to arrange
their private affairs so as to prevent real, potential or apparent conflicts
from arising. They are not to solicit or accept money or gifts; not to
assist individuals in their dealings with government in such a way as
to compromise their own professional status; not to take advantage of
information obtained because of their positions as insiders; and, after
they leave public office, not to act so as to take improper advantage
of having held that office. Beginning in 1994, information relating to
the spouses and dependent children of Ministers, Secretaries of State
and Parliamentary Secretaries became relevant.
The Code suggests that public
office holders, in order to reduce the risk of conflict of interest, should,
depending on the asset or interest in question, use avoidance, confidential
report, public declaration or divestment. The latter can include trusts
or management agreements. In relation to outside activities, the public
office holder is not to engage in the practice of a profession, actively
manage or operate a business or commercial venture, retain or accept directorships
or offices in a financial or commercial corporation, hold office in a
union or professional association, or serve as a paid consultant. The
Code also deals with public office holders after they leave office, proscribing
Ministers for two years and others for one year from certain activities
in order to ensure impartiality while in office and to avoid preferential
treatment upon leaving office.
The Code is administered
by the Office of the Ethics Counsellor; the office is located within Industry
Canada for administrative purposes, but takes general direction from the
Clerk of the Privy Council. The Office is thus not independent from the
Executive Branch of government.
E. Report of the Task Force on Conflict of Interest,
1984
The Task Force on Conflict
of Interest, chaired by the Hon. Michael Starr and the Hon. Mitchell Sharp,
was appointed by the federal government and charged with devising a regime
dealing with conflict of interest whereby public confidence would be ensured
and the integrity of the political process protected; at the same time,
the Task Force had to recognize the need to attract candidates of high
calibre to public office. The Task Forces Report identified nine
activities as involving conflicts of interest and recommended that these
forms of conduct be dealt with, depending on the severity of the conflict,
by: the use of a code of conduct; legal or quasi-legal procedures; or
the implementation of additional codes of procedure, general or specific
to the agency in question. The Task Force recommendations would have applied
only to Cabinet Ministers and Parliamentary Secretaries, not to Private
Members or Senators.
The procedures to minimize
conflicts of interest would have been in the form of regulations made
by the Governor in Council. A major recommendation was the creation of
the Office of Public Sector Ethics, which would have had an advisory,
administrative, investigative and educational role. Although the Task
Force also made recommendations governing the post-employment period,
it acknowledged the difficulty of enforcing such rules after a Parliamentarians
departure from office.
F. Recommendations of the Parker Commission
In his 1987 Report regarding
the allegations of conflict of interest involving Sinclair Stevens, Mr.
Justice William Parker suggested discontinuation of the use of blind trusts
to satisfy conflict-of-interest guidelines. He declared that in some instances
the "blindness" of such trusts was a fiction and that their
use could be subject to abuse. He recommended that conflict-of-interest
guidelines require public disclosure. Assets, interests and activities
should be clearly set out, as should the assets of spouses. He also suggested
that, in the interest of protecting privacy, certain personal assets would
not have to be disclosed. These could include a residence, automobiles,
cash and savings.
The disclosure statement
would have been placed in a public registry and made available to the
general public. Judge Parker also favoured divestment by a Minister of
his or her private assets where these could lead to obvious conflict of
interest, and recusal in situations where, despite preventive measures,
a conflict arose.
PARLIAMENTARY ACTION
Various attempts have been
made for almost 25 years to deal with conflict-of-interest issues. In
1973, the federal government issued a Green Paper entitled "Members
of Parliament and Conflict of Interest," which proposed to consolidate
and extend the existing rules. The Green Paper was studied by committees
in both the House of Commons and the Senate, each of which made numerous
recommendations. In 1978, the government tabled the Independence of Parliament
Act, which would have extended the provisions in the Green Paper and incorporated
some of the recommendations of the two committee reports. The bill received
second reading but died on the Order Paper when Parliament was
dissolved in 1979.
A. Register of Members' Interests
On 25 November 1985, the
House of Commons Standing Committee on Management and Members Services
was asked to consider matters related to the establishment of a Register
of Members Interests. The Committee was to look at whether Members
should disclose their remunerated directorships of public and private
companies and other remunerated positions, offices, trades and professions.
This matter was also referred to the Senate Standing Committee on Standing
Rules and Orders.
After consultation with
Members of all parties, the House Committee concluded that a Register
of Members Interests was not warranted and that the current law
relating to conflict of interest for Members was adequate. Furthermore,
the Committee concluded that such a Register would accomplish little more
than intrude into Members privacy. In contrast, the Senate Committee
recommended a complete review of conflict of interest as it applied to
Parliamentarians.
B. Members of the Senate and House of Commons
Conflict of Interests Act
Four bills to regulate conflict
of interest for federal legislators were introduced in the 33rd and 34th
Parliament; all of them died on the Order Paper. (See the chronology
at the end of this paper for the legislative history of the bills.) The
proposed legislation, which was similar to that being pioneered in a number
of provinces, would have provided for an annual declaration of the private
interests of Senators, Members of the House of Commons, and their spouses
and dependent children to an independent three-member Conflict of Interests
Commission. The Commission would have had extensive discretionary power
to advise Parliamentarians on their financial holdings, require public
declarations of assets, provide opinions on appropriate conduct, and hold
inquiries in response to allegations that the rules had been breached.
Proposed penalties for non-compliance ranged from fines to loss of the
Members or Senators seat, but their imposition would have
remained in the hands of the Members chamber.
The Commission would have
consisted of a Chief Commissioner chosen after consultation between the
Prime Minister and other party leaders, a member chosen by the government
from a list submitted by the opposition, and a member chosen by the government.
It would have been able to investigate alleged conflicts on its own initiative
or in response to a request from the Prime Minister or a majority in the
Senate or House of Commons.
The bills would have curbed
the fees that might be accepted by Ministers and Parliamentary Secretaries.
For a period of time after leaving the House or the Senate, former Ministers
or Parliamentary Secretaries would not have been able to accept government
contracts and would have been precluded from certain lobbying activities
for one year.
The bill was criticized
on two grounds: it did not require political aides to disclose their assets,
and Parliamentarians would not have had to declare benefits received from
political parties. Also controversial was the requirement for spouses
to disclose their interests to the Commission. It should also be noted
that the full disclosure recommended by the Parker Commission was not
included in the bills; instead, an official called the Registrar of Interests
would have prepared a summary of the confidential information disclosed
to the Commission, subject to regulations made by it and approved by the
Governor in Council.
C. The Special Joint Committee on Conflict
of Interests
On 22 November 1991, the
government introduced the third of the bills, Bill C-43. Without proceeding
to second reading, the subject matter of the bill was immediately referred
to a Special Joint Committee of the Senate and the House of Commons for
a comprehensive review, including a consideration of conflict-of-interest
approaches used in other jurisdictions.
The Special Joint Committee
on Conflict of Interests tabled its Report on 10 June 1992. The Committees
views differed in a number of respects from the policy choices reflected
in Bill C-43. Instead of a three-member Commission, the Report recommended
the appointment of a "Jurisconsult," to serve as advisor and
investigator. As in Bill C-43, public disclosure of financial interests
would have been required, although monetary values would not. Spousal
disclosure would have been potentially greater under the Committees
proposed regime than under that proposed in Bill C-43.
The Committee also recommended
techniques of compliance additional to those required in Bill C-43, such
as declaration of an interest and withdrawal from discussion or voting.
Finding the existing conflict-of-interest provisions in the Parliament
of Canada Act "inconsistent and hopelessly out of date,"
the Committee proposed that they be overhauled and that its draft bill
be included in that Act, rather than becoming a separate statute. Another
recommendation was to amend the Criminal Code to clarify that Parliamentarians
are not "officials," but are covered by its breach of trust
provisions.
On 11 March 1993, the government
tabled the fourth bill, C-116. In a somewhat surprising development, the
bill would have enacted as a separate statute many of the provisions of
the former Bill C-43, although restricting them to Ministers, Parliamentary
Secretaries and certain other public office holders. On the other hand,
most of the Special Committees recommendations would have been adopted
as amendments to the Parliament of Canada Act, but would have been
generally restricted to Senators and Private Members of the House of Commons.
The result would have been a separate agency to oversee each group.
Thus, the bill would have
created both a three-person Conflict of Interests Commission, to deal
with Ministers and Parliamentary Secretaries, as well as the Office of
Jurisconsult, to deal with Private Members and Senators. Each body would
have given advice to its respective constituency and operated under its
own rules. In a number of instances, this could have resulted in different
treatment, with Private Members and Senators potentially subject to a
stricter regime in certain matters. For example, the public disclosure
of financial interests could have differed for the two groups: for public
office holders (Ministers, Parliamentary Secretaries and others), disclosure
would have consisted of a summary of those interests and have been subject
to regulations of the Commission, while Members and Senators would have
been required to list their specific interests (although not their value).
The treatment of spouses would also have been different: for spouses of
public office holders, public disclosure would have been quite discretionary;
for spouses of other Members of Parliament, it would have been mandatory
and identical to that of the Member. Public disclosure of declarable gifts
would have been at the discretion of the Commission for public office
holders, yet mandatory for other Members and Senators.
These inconsistencies of
treatment resulted from grafting together two systems. On the one hand,
the bill represented a clear success for the Special Committee, because
its recommendations with respect to Private Members and Senators were
accepted in large part by the government. By not extending the ambit of
those recommendations to Ministers and Parliamentary Secretaries, however,
and by establishing a separate regime for such officials, the bill implicitly
rejected many of the Committees recommendations. Further, one of
the guiding principles of the Committees Report was that "any
system to be proposed must be clear, simple, and not give birth to a whole
new bureaucracy." The proposed creation of two new bureaucracies
dealing with Parliamentarians had undoubtedly not been foreseen.
On 30 March 1993, the House
of Commons gave second reading to the bill and referred it to a Special
Joint Committee, whose Co-Chairs were the same as for the committee that
had produced the report on conflict of interest in June of 1992, and whose
membership was also similar. As witnesses, the Committee heard the Clerk
of the House of Commons, the Senate Assistant Law Clerk and Parliamentary
Counsel, an official from the Privy Council Office, and the Minister of
State and Government House Leader, the Hon. Mr. Harvie Andre.
It quickly became apparent
that the Special Joint Committee was having difficulty with the bill.
On 6 May 1993, Mr. Andre, responding to a question in the House of Commons
suggesting that the Chair of the Committee had circulated a letter stating
that the bill was "dead," confirmed that the efforts of the
Committee and the government to find common ground had proved unsuccessful.
He announced that he had asked officials to draft a bill that would govern
only public office holders and not Private Members of the House and Senators.
On 3 June 1993, the House
of Commons Chair reported to the House with the recommendation that Bill
C-116 not be proceeded with. On 8 June, the Senate concurred with a similar
report made by the Senate Co-Chair. Both Bill C-43 and Bill C-116 died
on the Order Paper when Parliament was dissolved on 8 September
1993.
The election of October
1993 brought a change of government. The new Liberal government had stressed
ethics as an important aspect of its mandate and appointed the Hon. Mitchell
Sharp as ethics adviser. Mr. Sharp vetted prospective Cabinet members
for conflicts of interest in personal interviews prior to their appointment,
a process that apparently led to the screening out of two individuals.
The Throne Speech in January
1994 stressed that integrity and public trust were essential to the government
and that an ethics counsellor would be appointed (as had been promised
during the election campaign). The counsellor would advise Ministers and
public-service workers on their ethical responsibilities and would examine
the need for legislation.
On 16 June 1994, the government
announced that the new Ethics Counsellor would be Howard Wilson, then
Assistant Deputy Registrar of Canada and as such responsible for the administration
of the previous Code. His mandate was expanded to cover lobbying. At the
same time, a revised Conflict of Interest Code was released. It
differed little from the previous Code, although spouses and dependants
were now covered explicitly, rather than by additional directives as had
formerly been the case. In relation to conflict of interest, the Ethics
Counsellor continues to be under the general direction of the Clerk of
the Privy Council, has no independent investigatory powers, and continues
to report to the Prime Minister.
In June 1995, the House
passed a motion to establish a Special Joint Committee of the House and
Senate to develop a Code of Conduct. The following month, the Senate passed
a similar motion. More than 19 months later, the Committee presented
to Parliament its proposed Code of Official Conduct. The Committee emphasized
the following as important goals for the Code: the maintenance of public
trust and confidence in Parliament, and the provision of guidance for
Parliamentarians in how to reconcile their private interests with their
public duties. Specific rules were proposed for Parliamentarians which
would have prohibited them from furthering their own private interests
or those of their families, and from using insider information; the rules
would also have regulated the receipt of gifts and personal benefits,
sponsored travel and contracting with the government.
The heart of the Committees
report was its proposal that all Parliamentarians should disclose their
financial assets, liabilities, sources of income, and positions. The interests
of spouses and dependants would also be included. Disclosure would be
made confidentially, after which a summary would be prepared and made
public. The summary would not include small interests, purely personal
interests, or interests unlikely to result in any conflict of interest.
The Committee recommended
the creation of the position of Jurisconsult, a parliamentary officer
who would be appointed jointly by the Senate and the House of Commons
upon the recommendation of the Speakers, following consultation with the
leaders of all recognized parties. The Jurisconsult would receive Parliamentarians
confidential disclosures, prepare the public disclosure statements, and
advise Parliamentarians on the interpretation of the Code. Upon receiving
a complaint, the Jurisconsult would investigate; matters requiring a full
inquiry would be referred to a new joint committee of the Senate and House,
which would also have general oversight of the Jurisconsult and the Code.
The Committee recommended
against a legislated approach. Thus, the Code could be adopted by each
House either by way of resolution or by concurrence in the report with
the necessary rules of each chamber being modified as needed to establish
the position of Jurisconsult, his or her duties, and the new committee.
In the 36th Parliament,
the government took no action on the report. Gordon Earle, however, tabled
a Private Members bill entitled "Parliamentarians Code
of Conduct." Although the form of the Code would have differed
(the Special Committee had recommended that it be non-statutory, rather
than introduced by way of a bill), the proposals in the bill drew heavily
on the Special Committees report. The bill died on the Order
Paper when the first session ended. Reintroduced in the second
session, it again died on the Order Paper when an election call
ended the 36th Parliament in October 2000.
In the Auditor General
of Canadas October 2000 Report, one chapter was entitled "Values
and Ethics in the Federal Public Sector." After summarizing the history
of unsuccessful attempts to develop a code of conduct for Parliamentarians,
the Auditor General recommended that Parliamentarians try again, arguing
that it was important to show ethical leadership for the public sector
as a whole.
CHRONOLOGY
17 July 1973 - The Green
Paper entitled "Members of Parliament and Conflict of Interest"
was tabled in the House of Commons.
18 July 1973 - Prime Minister
Trudeau revealed additional guidelines for Cabinet Ministers in a statement
in the House of Commons. Ministers would be required to resign certain
corporate positions, sever business associations, and dispose of certain
financial interests while placing others in a trust.
18 December 1973 - Conflict-of-interest
guidelines for public-service workers were outlined in the House of Commons
by the Prime Minister.
January 1974 - The Election
Expenses Act was given third reading. It limited the amount that could
be spent during an election campaign, required the reporting of expenses
and contributions and the public disclosure of donors who contributed
more than $100, and provided for the partial reimbursement of expenses
to candidates.
10 June 1975 - The House
of Commons Standing Committee on Privileges and Elections tabled its report
on the Green Paper, generally endorsing the provisions but recommending
some changes.
29 June 1976 - The Senate
Legal and Constitutional Affairs Committee tabled its report recommending
amendments to the Green Paper proposals.
26 June 1978 - Bill C-62,
the Independence of Parliament Act, was introduced in the House of Commons
along with Proposed Standing Orders of the House and Rules of the Senate.
The bill died on the Order Paper.
16 October 1978 - The Independence
of Parliament Act was reintroduced with minor amendments, as Bill C-6.
The Proposed Standing Orders of the House and Rules of the Senate were
tabled in the Commons, 30 October 1978. The bill was referred to Committee
on 8 March 1979 but died on the Order Paper when Parliament was
dissolved 26 March 1979.
1 August 1979 - New conflict-of-interest
guidelines applicable to Cabinet Ministers, their spouses and dependent
children were issued by Prime Minister Joe Clark. Personal assets and
those of a non-commercial nature (e.g., residences, savings bonds, works
of art) were exempt; assets considered to be non-conflicting (e.g., family
businesses, farms, corporate securities not publicly traded) were to be
publicly disclosed. Other assets had to be sold or placed in a blind trust
and certain professional, corporate and commercial activities were prohibited
altogether.
1 May 1980 - Conflict-of-interest
guidelines for Cabinet Ministers were tabled by the Liberal government
(Sessional Paper No. 321-7/3). The guidelines were similar to those
of August 1979 but did not specifically apply to spouses and dependent
children; however, Ministers were not to transfer their assets to their
spouses or dependent children to avoid the guidelines.
7 July 1983 - Appointment
of a Task Force on Conflict of Interest by the federal government for
a major review of the policies and procedures on conflict of interest,
their evolution, and whether new approaches to this problem should be
devised.
May 1984 - Release of the
Report of the Task Force on Conflict of Interest entitled Ethical Conduct
in the Public Sector (the Starr-Sharp Report).
9 September 1985 - Establishment
by the government of the Conflict of Interest and Post-Employment Code
for Public Office Holders.
26 March 1986 - Report to
the House of Commons of the Management and Members Services Committee
on the Register of Members Interests.
7 May 1986 - Report of the
Senate Standing Committee on Standing Rules and Orders on the Register
of Senators Interests.
3 December 1987 - Release
of the report of the Parker Commission on Conflict of Interest.
24 February 1988 - First
reading of Bill C-114, the Members of the Senate and House of Commons
Conflict of Interest Act.
21-22
September 1988 - The Legislative Committee
on Bill C-114 held three meetings but was unable to complete deliberation
on the bill prior to dissolution of Parliament on 1 October 1988.
9 November 1989 - First
reading of Bill C-46, the Members of the Senate and House of Commons Conflict
of Interest Act. (This bill was essentially the same as Bill C-114, with
a few minor changes.) The bill died on the Order Paper when Parliament
was prorogued on 12 May 1991.
22 November 1991 - First
reading of Bill C-43, the Members of the Senate and House of Commons Conflict
of Interests Act. (This bill was virtually the same as Bill C-114 and
Bill C-46.) On the same date, the subject matter of the bill was
referred to a Special Joint Committee of the Senate and the House of Commons.
10 June 1992 - Report of
the Special Joint Committee on Conflict of Interests.
11 March 1993 - First reading
of Bill C-116, the Conflict of Interests of Public Office Holders Act,
which included amendments to the Parliament of Canada Act.
30 March 1993 - Second reading
of Bill C-116 in the House and its referral to a Special Joint Committee
similar to the committee that had reported in June 1992.
3 June 1993 - Report of
the Special Joint Committee to the House of Commons recommended that Bill
C-116 not be proceeded with. A similar report was made to the Senate on
the same day. Both Bill C-43 and Bill C-116 died on the Order Paper
when the 34th Parliament was dissolved on 8 September 1993.
18 January 1994 - The Throne
Speech announced that an ethics counsellor would be appointed to advise
Ministers and public-service workers and to examine the need for legislation.
16 June 1994 - Howard Wilson
was appointed Ethics Counsellor, in charge of lobbying and conflict of
interest. A new Code, little changed from its predecessor, was also released.
June-July 1995 - The House
and Senate passed motions to establish a Special Joint Committee to develop
a Code of Conduct.
20 March 1997 - The
Special Joint Committee on a Code of Conduct tabled its proposed Code
of Official Conduct.
15 March 1999 - Bill C-488,
a Private Members bill to establish a Parliamentarians Code
of Conduct, was introduced. The bill died on the Order Paper when
the first session of the 36th Parliament ended on 17 September
1999. Reintroduced as Bill C-226 in the next session, the bill again
died on the Order Paper when an election was called and the 36th Parliament
ended in October 2000.
17 October 2000 - The
Auditor General of Canada recommended that Parliamentarians revisit the
issue of conflict of interest/code of conduct.
SELECTED REFERENCES
Commission
of Inquiry into the Facts of Allegations of Conflict of Interest Concerning
the Honourable Sinclair M. Stevens.
Commissioner The Honourable W.D. Parker. Ottawa, 1987.
Greene,
Ian. "Conflict of Interest and the Canadian Constitution: An Analysis
of Conflict of Interest Rules for Canadian Cabinet Ministers." Canadian
Journal of Political Science, June 1990, 23:233-56.
House of Commons, Office of
the Law Clerk and Parliamentary Counsel.
- Conflict of Interest and Members
of Parliament.
- Conflict of Interest Rules.
Office of the Prime Minister.
"Conflict of Interest and Post-Employment Code for Public Office
Holders." Ottawa, 1994.
Parliament. Report of the
Special Joint Committee on Conflict of Interests, 1992.
The Special Joint Committee
on a Code of Conduct of the Senate and the House of Commons. Second Report.
March 1997.
Task Force on Conflict of
Interest. Ethical Conduct in the Public Sector. Report. Michael
Starr and Mitchell Sharp, Co-Chairmen. Ottawa, 1984.
* The original version of this Current Issue
Review was published in August 1979; the paper has been regularly updated
since that time.
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