CITATION: R. v. Carson, 2017 ONSC 5371
COURT FILE NO.: 14-20004-AP
DATE: 2017/09/11
COURT OF ONTARIO, SUPERIOR COURT OF JUSTICE
RE: Her Majesty the Queen v. Bruce Carson
BEFORE: Mr. Justice Calum MacLeod
COUNSEL: Vern Brewer, counsel, for the Crown (Respondent)
Patrick McCann, counsel, for the Accused (Appellant)
HEARD: June 21, 2017
REASONS
[1] This is a summary conviction appeal in relation to offences under the Lobbying Act.[^1] The Appellant was convicted of three counts in September of 2016 and sentenced to pay a fine of $50,000.00.[^2] He appeals both conviction and sentence.
[2] The first issue is whether or not the activities undertaken by the Appellant were properly found to be prohibited activities within the meaning of the Act. The second is whether it was fair and reasonable to sentence the accused to pay the maximum fine.
[3] For the reasons that follow, I am overturning the conviction on count three, upholding the conviction on counts one and two and reducing the global sentence to a fine of $45,000.00.
Background
[4] Bruce Carson has experience as a senior advisor to various levels of government and is a former policy director for a federal political party. Between 2006 and 2009 he served as advisor to the Prime Minister of Canada. On July 2nd, 2008 amendments to the federal legislative scheme for lobbyists had come into force. Pursuant to the new regime, the appellant was a “designated public office holder” and as such he was prohibited from engaging in lobbying for a period of five years after ceasing to hold office. Specifically the prohibition is against carrying on defined activities described in the sections of the Act requiring registration of lobbyists.[^3] In the case of Mr. Carson, that period of prohibition would have run from February 4th, 2009 and would have continued until February 4th, 2014.
[5] After leaving the Prime Minister’s Office, the Appellant took employment as Executive Director of the Canada School of Energy and Environment (CSEE), an entity founded by three Alberta universities. In planning to accept that post and before leaving the Prime Minister’s Office, he had reviewed his plans with the Office of the Conflict of Interest and Ethics Commissioner and was aware of both the one year “cooling off period” under the Conflict of Interest Act and the 5 year prohibition against lobbying.
[6] CSEE had been founded in 2007 as a joint initiative of the Universities of Calgary, Lethbridge and Alberta. It was intended as a think tank relating to energy and environmental issues and it had been selected as a “centre of excellence” for science and technology by the federal government. On March 7th, 2007 it was awarded a $15M grant and entered into an agreement with Industry Canada. It is not suggested that Mr. Carson was involved in any way with the establishment of CSEE or the negotiation of the contract. The agreement was in place and the grant had been awarded before he became Executive Director.
[7] Under the terms of the agreement, CSEE was to have committed all of the grant by March 31st, 2010. It appears that this deadline might not have been achieved and in that case the grant might have been forfeit. As Executive Director, Mr. Carson was involved in discussions with Industry Canada leading to an amended agreement. Those discussions and communication may have been initiated by Industry Canada but they included meetings, conference calls and e-mails to senior bureaucrats at the deputy minister level. The funding deadline was ultimately extended by four years to March 31st, 2014. The agreement was also amended to permit more latitude in the use of the grant money.
[8] In August of 2009, Mr. Carson participated in founding the Energy Policy Institute of Canada (EPIC). The membership included oil companies and entities involved in energy consumption and electricity generation. The mandate of EPIC was to “develop a comprehensive pan-Canadian energy strategy” with a view to making recommendations to provincial, territorial and federal governments responsible for energy policy and regulation. The board of EPIC consisted of several individuals including a former minister and Mr. Carson was named “co-chair”. He was paid honoraria which eventually totalled $160,000.00.
[9] Although EPIC passed a resolution in early 2010 to the effect that Mr. Carson would not “lobby the federal government on behalf of EPIC”, he did communicate regularly with public office holders and met with the Minister of Natural Resources in support of the development of a National Clean Energy Strategy for Canada. In February of 2010, he was invited to a dinner meeting with the Minister of Natural Resources and many of the EPIC stakeholders. He was involved in making efforts on behalf of EPIC to meet with federal and provincial energy ministers and deputy ministers. Ultimately in September of 2010, he attended a breakfast meeting of various federal and provincial energy and mining ministers at a conference in Montreal.
[10] The Appellant continued to communicate and meet with senior bureaucrats and political figures in the following year while EPIC finalized its Strategy for Canada’s Global Energy Leadership. He was involved in disseminating the EPIC paper to deputy ministers, the Privy Council Office and the Prime Minister’s Office.
The Legislation
[11] The section of the legislation creating the offences with which Mr. Carson was charged reads as follows:
10.11 (1) No individual shall, during a period of five years after the day on which the individual ceases to be a designated public office holder,
(a) carry on any of the activities referred to in paragraph 5(1)(a) or (b) in the circumstances referred to in subsection 5(1);
(b) if the individual is employed by an organization, carry on any of the activities referred to in paragraph 7(1)(a) on behalf of that organization; and
(c) if the individual is employed by a corporation, carry on any of the activities referred to in paragraph 7(1)(a) on behalf of that corporation if carrying on those activities would constitute a significant part of the individual’s work on its behalf.
[12] To determine what is prohibited, it is therefore necessary to read sections 5 and 7 of the Act. As noted, those sections require certain classes of person engaging in certain defined activities to file returns with the Commissioner of Lobbying. Section 5 deals with “consultant lobbyists” and reads as follows:
5 (1) An individual shall file with the Commissioner, in the prescribed form and manner, a return setting out the information referred to in subsection (2), if the individual, for payment, on behalf of any person or organization (in this section referred to as the “client”), undertakes to
(a) communicate with a public office holder in respect of
(i) the development of any legislative proposal by the Government of Canada or by a member of the Senate or the House of Commons,
(ii) the introduction of any Bill or resolution in either House of Parliament or the passage, defeat or amendment of any Bill or resolution that is before either House of Parliament,
(iii) the making or amendment of any regulation as defined in subsection 2(1) of the Statutory Instruments Act,
(iv) the development or amendment of any policy or program of the Government of Canada,
(v) the awarding of any grant, contribution or other financial benefit by or on behalf of Her Majesty in right of Canada, or
(vi) the awarding of any contract by or on behalf of Her Majesty in right of Canada; or
(b) arrange a meeting between a public office holder and any other person.
[13] Section 7 deals with “in-house lobbyists”. It reads as follows:
7 (1) The officer responsible for filing returns for a corporation or organization shall file with the Commissioner, in the prescribed form and manner, a return setting out the information referred to in subsection (3) if
(a) the corporation or organization employs one or more individuals any part of whose duties is to communicate with public office holders on behalf of the employer or, if the employer is a corporation, on behalf of any subsidiary of the employer or any corporation of which the employer is a subsidiary, in respect of
(i) the development of any legislative proposal by the Government of Canada or by a member of the Senate or the House of Commons,
(ii) the introduction of any Bill or resolution in either House of Parliament or the passage, defeat or amendment of any Bill or resolution that is before either House of Parliament,
(iii) the making or amendment of any regulation as defined in subsection 2(1) of the Statutory Instruments Act,
(iv) the development or amendment of any policy or program of the Government of Canada, or
(v) the awarding of any grant, contribution or other financial benefit by or on behalf of Her Majesty in right of Canada; and
(b) those duties constitute a significant part of the duties of one employee or would constitute a significant part of the duties of one employee if they were performed by only one employee.
[14] It is also relevant that “organization” is a defined term in the Act. Under s. 2 (1) it has the following meanings:
organization includes
(a) a business, trade, industry, professional or voluntary organization,
(b) a trade union or labour organization,
(c) a chamber of commerce or board of trade,
(d) a partnership, trust, association, charitable society, coalition or interest group,
(e) a government, other than the Government of Canada, and
(f) a corporation without share capital incorporated to pursue, without financial gain to its members, objects of a national, provincial, patriotic, religious, philanthropic, charitable, scientific, artistic, social, professional or sporting character or other similar objects; (organisation)
The concept is clear enough. Certain activities are defined by the legislation as lobbying which require registration with the Commissioner. Designated office holders are prohibited from engaging in many of those activities for five years after leaving office. This is intended to avoid former office holders wielding undue influence with government or appearing to do so.
The decision Under Appeal
[15] The trial took place on May 11th, 2016 and the learned trial judge released her decision on September 16th, 2016 followed by sentencing on November 4th, 2016. The reasons for conviction are set out in a 97 page written decision and the sentencing decision in a further 13 pages. It is evident that the judge was alert to the significance of her decision and gave it considerable thought.
Appeal Against Conviction
[16] The Appellant does not contest the primary findings of fact made by the trial judge. Summarized above, those findings are detailed in paragraphs 7 – 88 of the decision. The facts are grounded in an agreed statement of facts and in the evidence. The question is whether those actions undertaken by the Appellant properly constitute offences under the Act.
[17] As this is primarily an exercise in statutory interpretation and application, it proceeds largely on a standard of correctness though findings of fact or inferences drawn from the evidence are of course entitled to deference.[^4] I will deal firstly with count three and then with counts one and two.
[18] Count three related to the activity of the Appellant while he was Executive Director at CSEE. At the relevant time, CSEE was already the recipient of a large government grant which was to be used for the purposes defined in the funding agreement and approved by Industry Canada prior to March 31, 2010. In early 2009 Industry Canada contacted CSEE as it appeared the grant was unlikely to be fully utilized by the original deadline. This resulted in a series of discussions between the Appellant and officials at Industry Canada and eventually to amendment of the funding agreement. The funding window was extended and the funding purposes were slightly reworded but there was no new commitment of funds.
[19] At trial and on the appeal, Mr. McCann advanced an interpretation of section 10.11 of the Act which the trial judge rejected. I agree with her conclusion. This is important because section 10.11 is the section which creates the prohibition for former designated public office holders.
[20] The section imposes certain restrictions on individuals, individuals employed by “organizations” and individuals employed by “corporations”. Mr. McCann argued that properly interpreted this section created a series of limitations and that only one of them should be applied. In effect he argued that the least restrictive category should apply. Specifically he argued that if the Appellant was employed by a corporation then only subparagraph (c) should apply so that he would only be prohibited from lobbying if “carrying on those activities would constitute a significant part of the individual’s work on its behalf.”
[21] The trial judge quite properly rejected this interpretation.[^5] In addition to the use of the conjunctive word “and” between subsections (b) and (c) which indicates that the prohibitions may be cumulative, the definition section of the Act specifically defines “organization” to include “a corporation without share capital” incorporated for various charitable or not for profit objectives. It is clear that a not-for-profit corporation will be both a corporation and an organization and that both subparagraphs (b) and (c) apply. In other words, a former designated public office holder who is “employed by an organization” is prohibited from carrying on any of the activities referred to in paragraph 7 (1) (a) of the Act whether or not the organization is incorporated. By contrast, if the former office holder is employed by a corporation that is not an organization he or she is only prohibited from those activities if those activities would constitute a significant part of the individual’s work on its behalf.
[22] Whether in-house lobbying on behalf of a charity or a not-for profit entity should be subject to greater restriction than in-house lobbying on behalf of a business corporation is no doubt open to debate. This however is the plain and unambiguous wording of the statute and reflects the legislative intent. I therefore agree with the trial judge that it was not necessary for the Crown to show that lobbying constituted a significant part of the Appellant’s work for CSEE.
[23] Where I disagree with the trial judge is in her conclusion that the activity undertaken by the Appellant for CSEE constituted prohibited lobbying. It is significant though not conclusive that the dialogue was initiated by Industry Canada and not by the Appellant. It is also significant that neither the Appellant nor the officials he was speaking with believed he was involved in lobbying. They were alerted to the issue because both the original and the amended agreement contained representations and warranties that no unregistered lobbyist had lobbied on behalf of CSEE to obtain the funding and that CSEE was in compliance with the Lobbying Act. I agree with the trial judge that neither of these factors inoculate the activities of the Appellant from conviction if he strayed into prohibited lobbying on behalf of CSEE. Nevertheless, this evidence should have been given weight in considering whether or not prohibited activities had taken place.
[24] CSEE was an entity created primarily as a vehicle for a program of the Government of Canada. The funding was to be used to support research and to attract world renowned lecturers, policy makers and industry representatives. It was a requirement of the funding agreement that there be dialogue and reporting between CSEE and Industry Canada. While I agree with the proposition that in certain circumstances, negotiating for extension of existing funding and for renewal of an agreement could become lobbying, I disagree that properly interpreted the Appellant was guilty of an offence in these circumstances. Responding to inquiries from government officials regarding a grant that had already been awarded and how and when it was to be spent is not clearly engaging in “communication in respect of the awarding of any grant, contribution or other financial benefit by or on behalf of Her Majesty in right of Canada”. The fact that the dialogue resulted in extension of the funding window and some minor changes to the purpose of the funding was to enable the deployment of funding the government had already committed and was not equivalent to awarding of a grant, contribution or financial benefit.
[25] If there is ambiguity in the interpretation of a penal statute, the ambiguity must be resolved in favour of the accused. The trial judge was alert to this principle[^6] but in my view she failed to apply it correctly to these facts. There is reasonable doubt that on these facts an offence was committed. Accordingly the conviction on count three cannot stand and will be overturned.
[26] It is otherwise with respect to counts one and two. Those counts had to do with the activities of the Appellant on behalf of EPIC. EPIC was an organization within the meaning of the Act. Its main purpose and function was to develop and promote an energy strategy for Canada. I agree entirely with the conclusion of the trial judge that the activities of the Appellant on behalf of EPIC constituted prohibited lobbying.
[27] The trial judge concluded that notwithstanding the resolution passed by EPIC that he would not “lobby” and the fact that the payments to him were called an honorarium he was in fact acting as a “consultant lobbyist” within the meaning of the Act. She concluded that he had “undertaken for payment” to communicate with public office holders on behalf of EPIC for the prohibited purposes. Her analysis is primarily set out in paras. 247 – 262 and 263 to the end. I am in substantial agreement with her analysis of the evidence and her interpretation of the Act. In my view the activities of EPIC and the activities undertaken by the Appellant on its behalf were an exemplar of what the Act prohibits.
[28] The Appellant argues that the trial judge gave inadequate weight to opinions of current or former public office holders and failed to identify individuals that he had arranged meet with the public office holders. As set out above, the opinions of public office holders could be admitted as an aid to interpret the Act but their views cannot be conclusive. The opinions were part of the statement of agreed facts but they were not admitted as expert opinions. Even if they were, the trial judge is not obligated to accept those opinions. With respect to the attendance at meetings, there was sufficient evidence before the trial judge for her to reach the conclusion she did.
[29] The Appellant was properly convicted on counts one and two.
Appeal on Sentence
[30] When it comes to sentencing appeals, the trial judge is entitled to a high degree of deference. Although the reviewing court may consider the fitness of the sentence[^7], the court should only intervene if the trial judge made an error in principle, applied the wrong factors, overemphasised certain factors or the sentence is “manifestly unfit” because for example it is completely outside of the normal range for the offence.[^8]
[31] As I have overturned one of the convictions, it will be necessary to adjust the global sentence in any event but apart from that consideration, the Appellant argues that it was an error in principle to impose such a substantial fine. His primary objection is that the trial judge gave inadequate weight to the financial circumstances of the Appellant.
[32] The sentencing judge was alert to the fact that there was little jurisprudence to guide her. The amendments to the Act creating these offences came into effect in 2008 and there is no established range of punishment. She imposed fines of $5,000 for count three, $10,000.00 for count two and $35,000.00 for count one. This came to a total of $50,000.00 and was therefore well below the maximum which could have been $150,000.00. That is $50,000.00 for each count.
[33] The sentencing judge also considered the need for deterrence and denunciation and the fact that the Appellant had held a very senior position, was well aware of the prohibition and at least with regard to count one acted with reckless disregard for the prohibition. She also considered his past criminal record as an aggravating factor. She concluded that the fine must be substantial enough to warn others that the offence will not be tolerated and should not appear to be a mere licence fee for illegal activity.[^9] She held that the lobbying on behalf of EPIC was particularly egregious because it was behind closed doors for the purpose of developing energy policy favourable to the member oil and gas companies and without the knowledge of other important stakeholders.[^10]
[34] She considered the evidence in relation to the Appellant’s financial circumstances to be unpersuasive and concluded that he remains employed and employable.[^11] I can find no error of principle in the sentence.
[35] As I have overturned the conviction on count three, the fine associated with that offence will be rescinded. This reduces the global sentence to $45,000.00. I do not consider this to be manifestly unfit.
Mr. Justice Calum MacLeod
Date: September 11th, 2017
CITATION: R. v. Carson, 2017 ONSC 5371
COURT FILE NO.: 14-20004-AP
DATE: 2017/09/11
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Her Majesty The Queen, Respondent
AND
Bruce Carson, Appellant
BEFORE: Mr. Justice Calum MacLeod
COUNSEL: Vern Brewer, for the Crown (Respondent)
Patrick McCann, for the Accused (Appellant)
Reasons
Mr. Justice Calum MacLeod
Released: September 11, 2017
[^1]: RSC 1985, c. 44 (4th Supp.) as amended (formerly the Lobbyists Registration Act)
[^2]: The reasons for conviction may be found at 2016 ONCJ 596 while the sentencing decision is currently unreported.
[^3]: S. 5 (1) (a) or (b) or s. 7 (1) (a) as described in more detail below.
[^4]: This requires “palpable and overriding error”. See Housen v. Nikolaisen, 2002 SCC 33; [2002] 2 SCR 235
[^5]: Para 204 of her reasons
[^6]: At para. 155 of her decision
[^7]: S. 822 (6), Criminal Code
[^8]: R. v. Proulx, 2000 SCC 5; [2000] 1 SCR 61
[^9]: Para 29 of the sentencing decision.
[^10]: Para. 22 of the sentencing decision
[^11]: Para. 26 of the sentencing decision