Why expand the cooling-off period for public office holders?

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March 29, 2019

Why expand the cooling-off period for public office holders?

Written by Etienne Rainville, Tom Jarmyn

Originally published in Policy Options. Click here to read the original.

It’s not clear how the public interest is served by the Ethics Commissioner’s recent changes to the Conflict of Interest Act.

In early September 2018, Mario Dion, Canada’s third conflict of interest and ethics commissioner, sent an email to a small group of civil servants and political staff informing them of a reasonably obscure change to the interpretation of a single word – the word “entity” – in the Conflict of Interest Act. The change expands the application of the cooling-off period under section 35 of the act and means that political staff and Governor-in-Council appointees will be unable to easily compete for and accept positions in the Public Service. It is also an interpretation that is contradicted by other statutory provisions.

Section 35 (1) and (2) of the act reads as follows:

  • 35 (1) No former reporting public office holder shall enter into a contract of service with, accept an appointment to a board of directors of, or accept an offer of employment with, an entity with which he or she had direct and significant official dealings during the period of one year immediately before his or her last day in office [Emphasis is mine].
  • (2) No former reporting public office holder shall make representations whether for remuneration or not, for or on behalf of any other person or entity to any department, organization, board, commission or tribunal with which he or she had direct and significant official dealings during the period of one year immediately before his or her last day in office.

The Conflict of Interest Act says the positions are considered reporting public office holders (RPOHs) are ministers of the crown, parliamentary secretaries, ministerial staff working over 15 hours a week, and some Governor-in-Council appointees. The “cooling-off period” is a one-year window (two years for ministers) during which RPOHs are subject to post-employment restrictions that include, among others, a five-year ban on lobbying.

Section 35 was part of a package of reforms introduced by the Harper government in the Federal Accountability Act (FAA) and was the second piece of legislation introduced by that government. It was a response to the sponsorship scandal and to the recommendations of the Gomery report. The FAA created or reformed many of the independent oversight offices that operate across the government, including the Office of the Conflict of Interest and Ethics Commissioner.

The section aims to prevent conflicts of interest (real or perceived) that might arise from the possibility that RPOHs would make decisions to benefit themselves after they have left office. For instance, it would prevent a minister of natural resources from working for a mining company a short time after meeting with it and providing it with financial support. These prohibitions eliminate the possibility of real conflicts of interest in decision-making and the perception that a decision-maker is acting for any other purpose than the public good.

Until September of 2018, an “entity” as referred to in section 35(1) had always been understood to be an actor outside government. It meant that RPOHs could not work for companies that had made direct and significant representations to them while they held office.

The Ethics Commissioner’s recent memo effectively amends this statute. It says, “I am of the view that the prohibitions set out in section 35 apply to all entities, including federal public sector entities.” The commissioner has taken the phrase “an entity” and expanded it to include federal public-sector entities, which were not been previously covered.

On process alone, this determination is problematic. The memo was circulated to public-office holders by email; it was not posted publicly as an announcement. While the substance of the memo now appears in the Information Notice on Post-Employment Rules, the lack of announcement meant that for academics, lawyers and external observers it was effectively buried. The memo includes no context or rationale for why the commissioner has seen fit to issue a reinterpretation that breaks away from the precedent set by the two previous commissioners. It also appears that there have not been any consultations regarding this change.

By including the Government of Canada as an entity that is covered by section 35, a barrier is erected that will have the effect of discouraging the attraction and retention of talent in key positions across the civil service, in ministerial offices and in Governor-in-Council appointments. In practice, this could be applied in several ways. Here are some examples:

  • 1: Jeanna has a PhD in fisheries policy and works as a policy adviser in the Office of the Minister of Fisheries and Oceans. After four years of working in this office, she is burnt out and resigns. A few weeks later she sees a posting for job as a specialist with the Department of Fisheries and Oceans and considers applying for it.
  • 2: Alexandra works as director of policy for the Minister of Indigenous Services. She is seeking a promotion, but there is currently no possibility of promotion in her office. She resigns to work in the private sector for six months. Her chief of staff resigns unexpectedly, and the minister approaches her to return and take up that position.
  • 3: François is the Minister of International Affairs. He resigns from the position of minister and as a Member of Parliament, for personal reasons. One year later, the Prime Minister offers to appoint François as ambassador to the United Kingdom.

All three of these individuals are RPOHs and all are subject to the section 35 cooling-off period. As of September 2018, because of the Ethics Commissioner’s new interpretation of the term “entity,” all three would be prohibited from accepting the positions offered to them.

With hundreds of staff being employed in ministerial offices across government, the situation represented by examples 1 and 2 ─ of ministerial staff seeking to work in the federal civil service ─ happens with reasonable frequency. Example 3 is a generic recounting of how the Honourable Stéphane Dion and Lawrence Cannon, both former ministers of the Crown, were appointed ambassadors. Arguably, now neither would have been eligible for such a position until their two-year cool-down period had expired. What conflict of interest this prevents remains unclear. How the public interest is served by these prohibitions is also not clear.

However, we go further than suggesting this change is not in the public interest. The Ethics Commissioner has only the authority granted under the Conflict of Interest Act. We argue that Parliament has turned its mind to these issues, and this interpretation is beyond the commissioner’s authority.

Section 35.2 of the Public Service Employment Act expressly permits former public-office-holders to participate in internal government hiring processes. It is important also to recall that one of the changes to the FAA was to remove the right of ministerial staff to obtain priority appointment in the public service. Now, after three years’ service as members of ministerial staffs, these individuals may participate on a competitive basis in the hiring process. Governor-in-Council appointees are also considered internal candidates for the purposes of these competitions. These hiring processes are monitored by the public service commissioner, and deputy heads are accountable for their fairness and transparency. This is an express choice made by Parliament.

The Ethics Commissioner’s policy also ignores the fact that some RPOHs are public servants who have been seconded to ministers’ offices or who are on leaves of absence from the Public Service to allow them to fill positions on ministerial staffs or as Governor-in-Council appointees. The commissioner’s interpretation would effectively prohibit those people from returning to their previous employment.

The Conflict of Interest Act does provide for a waiver process, under section 39, in which the commissioner can consider waiving or reducing the cooling-down restrictions. Section 39 (3) lays out seven criteria for consideration before a waiver is granted, two of which (d and e) explicitly weigh private-sector considerations (i.e., unfair commercial advantage: Would a telecommunication company get an advantage over its competitors by hiring the minister of innovation’s policy adviser?).

Since the Ethics Commissioner’s change was implemented, six waivers have been granted. This has created cases such as a former ministerial policy adviser requiring a waiver before accepting a 90-day casual contract at the department he worked in, and a ministerial director of communications requiring a waiver after retiring from his position and being offered a contract at his party’s parliamentary research bureau. Unfortunately, the public registry only displays waivers granted, so there is no way to assess which cases the commissioner has denied, effectively which scenarios violate his interpretation of the public interest.

The commissioner has provided no explanation of the public interest that is served by preventing public office holders from participating in a competitive process to join the public service. The process of appointment is already monitored by the Public Service Commission, which requires mandatory notification of appointment and makes any appointment subject to complaint by an interested party.

There are a few approaches that would address this situation:

  • The first and perhaps least likely would be for the commissioner to reverse course and reconsider his interpretation.
  • The second would be for RPOHs who are affected to seek judicial review of this interpretation by Federal Court.
  • The third, which is more long term, Mario Dion’s successor could reconsider the matter.
  • Last, the government could address the matter through a clarifying amendment to the Conflict of Interest Act, which would either be included in the 2020 Budget Implementation Act or added to legislation resulting from the statutory review of the Lobbying Act that is anticipated later in 2019.

It is already difficult to staff ministers’ offices with people possessing the necessary skills, knowledge and expertise. These positions require relatively long hours. They have limited job security; they terminate 30 days after the minister leaves office. The same is true of Governor-in-Council appointees, whose employment terminates on a fixed date. Post-employment restrictions are a factor that must be considered by anyone deciding whether to accept these positions.

If this matter is not addressed, it will become even more difficult to attract good candidates to positions on ministerial staff or as Governor-in-Council appointees.