Preparing for transition is a low-profile but very important election season activity. It also carries compliance risk, including risks related to unlawful political contributions, conflicts of interest and lobbying regulation.
"Transition" does not imply a change of government; even governing parties assemble transition teams to prepare for another term of office. A company or organization must consider the compliance risks if any of the following applies:
- It seeks to influence a party's transition planning or policy.
- Its employees participate in transition activity.
- Its information, facilities or other resources are used by transition teams.
Transition Team Status
While each political party prepares for transition differently, certain principles apply generally.
First, at least until the election occurs, the transition team is an undertaking of a political party. Among other things, this means that political finance rules are engaged.
Second, some transition team members, such as House of Commons employees and ministerial staff members (whether or not on leaves of absence), may be public office holders. This has lobbying law and conflict of interest implications.
After the election, the status of transition teams becomes more complicated. Transition team members who are identified by the Prime Minister become subject to Lobbying Act restrictions, discussed below. Further, transition team members may qualify as public office holders at common law depending on factors such as remuneration, oaths, and duties to the Crown.
Transition team members, even volunteers, are subject to the Conflict of Interest Act if they hold an advisory role in the Prime Minister's Office after the swearing-in or, in the case of an incumbent Prime Minister, at any time.
Unlawful Support to Transition Planning
Transition team activity is not an election expense and is not subject to campaign spending limits. On the other hand, any contribution to a transition team is a contribution to the political party to which the team belongs.
The Canada Elections Act prohibits a corporation, trade union and any entity except an individual acting in a personal capacity from making monetary and non-monetary contributions to a political party. (A non-monetary contribution includes a service, property or the use of property that is provided without charge or for less than its commercial value.)
The following examples of support to a party's transition team would constitute unlawful contributions:
Transition team activity during an employee's working hours.
Use of a company's phones, wireless devices, computers, offices, meeting space, catering, or other equipment or resources to support a transition team.
Giving the transition team access to information with commercial value (for example, polling data or proprietary research).
Reimbursing an employee for expenses related to transition team activity.
These would be unlawful contributions even if made unintentionally (for example, even if the employer is unaware that an expense claim, cell phone bill, or use of a meeting room relates to transition team activity). Companies and organizations must exercise due diligence to avoid inadvertent contributions to transition teams and to other undertakings of political parties.
Self-employed individuals (including members of professional partnerships) make contributions when they freely (or at reduced cost) provide a political party with services for which they normally charge. Such an individual contribution is not unlawful unless it causes the giver to exceed the $1,600 CAD annual contribution limit.
The risk of unlawful political contributions diminishes after the election, once a transition team becomes housed in government offices and ceases to be part of a political party.
Restrictions on Lobbying
As a general matter, seeking to influence a political party's transition planning does not constitute lobbying. Exceptions exist. Whether it occurs before or after the election, communication with any public office holders on the transition team is probably lobbying and subject to registration.
The previous paragraph refers to lobbying by persons uninvolved in the transition process. Lobbying by transition team participants is subject to multiple restrictions, before the election, during the transition period and for many years afterward.
After the election, those identified as part of the Prime Minister's transition team (the language of the Act indicates that this rule is limited to the transition of an incoming Prime Minister, not the incumbent) become subject to the same restrictions and obligations as Designated Public Office Holders. Among other things, they become subject to a five-year prohibition of certain types of lobbying and, when they are permitted to lobby, their past transition team roles must forever be disclosed on lobbyist registrations.
This is not, however, the only restriction on lobbying by transition team participants. The Lobbyists' Code of Conduct results in additional prohibitions. Where service on a transition team (including service prior to the election) is reasonably perceived to create a sense of obligation, felt by a Prime Minister to the transition team participant, the transition participant must not subsequently lobby the Prime Minister or Prime Minister's Office.
Further, a large part of transition team activity involves recruiting and identifying individuals to serve in ministerial and parliamentary offices and on agencies and boards. Reasonable perception would be that a public office holder whose job or appointment resulted from a transition team recommendation feels a sense of obligation toward the transition team member(s). A former transition team member must not, therefore, lobby a public office holder whom he or she recommended for that job or appointment.
The same would also apply to transition team members who advise on Cabinet appointments. They may not lobby a Minister, or the staff of a Minister, whose appointment they recommended or they would reasonably be perceived to have recommended.
Lobbyists and their employers and clients should also avoid using involvement in the transition process to influence future government decisions. The Lobbyists' Code of Conduct (Rule 6) prohibits action that could place a public office holder in a conflict of interest. It also (Rule 1) requires frank disclosure whenever an employer or client interest is being advanced. Giving transition advice that benefits a lobbying interest could contravene both rules.
Transition team participants and their employers and clients must also familiarize themselves with relevant provisions of the Criminal Code.
Paragraph 121(1)(d) of the Criminal Code makes it an offence for anyone having or pretending to have influence with the government (which would include a transition team member as well as someone purporting to have transition team influence) to demand or accept a benefit of any kind as consideration for the exercise of influence in connection with any government business or with filling a government office.
The punishment for breach of this provision is imprisonment for up to five years.
One way to avoid compliance risk is to exclude lobbyists from the transition process. An alternative solution, though less absolute, is for employers and clients to document that no portion of lobbyist compensation relates to, or is provided in expectation of, any transition team function. They should also obtain formal, written assurances that their lobbyists will not advance any employer or client interest in the course of transition team membership.
Transition teams and persons dealing with transition teams must also stay clear of activity that might constitute obstruction of justice (defined in subsection 139(2) of the Criminal Code as a wilful attempt to obstruct, pervert or defeat the course of justice). Persons both inside and outside a transition team should avoid seeking to involve the transition team in criminal prosecutions and in other matters subject to the independent authority of the Attorney General and the Director of Public Prosecutions.
Conflict of Interest
The transition process also has implications for current and future public office holders, including a Prime Minister who benefitted from transition team advice, employees in the Prime Minister's Office, Cabinet Ministers and ministerial staff members.
Under the Conflict of Interest Act, a public office holder must not use the position to further someone's private interest improperly, and most not give preferential treatment based on the identity of someone's representative. A public holder must not participate in a decision where there is an opportunity to further another person's private interests improperly.
In the post-transition context, a public office holder could contravene the Act by:
Participating in a decision or matter that involves a former transition team member, or affects an interest of the transition team member's client or employer.
Participating in a decision or matter that affects an interest of someone (or the employer or client of someone) who recommended or advised that the public office holder be appointed or hired.
Accepting a meeting or giving other preferential treatment because a former transition team member is involved.
Sharing confidential information with a former transition team member.
Transition team members might themselves, by virtue of transition activity, be considered public office holders under the Conflict of Interest Act or at common law. This is definitely true of an advisor who remains in the Prime Minister's Office, even on an unpaid basis, following the swearing in; the Conflict of Interest Act makes such an advisor a reporting public office holder. Reporting public office holders must make financial disclosure to the Conflict of Interest and Ethics Commissioner, are prohibited from engaging in most types of business activities, and on exit become subject to various post-service restrictions, including a one-year restriction on making certain types of representation to government and on accepting certain types of employment.
Companies, organizations and participants in the political process should not become involved (directly, or through their employees) in the transition process, or communicate with transition team members, without first understanding the applicable laws and assessing the compliance risks. It is important to obtain advice from a legal expert in political law before taking action.
 This might not apply to a transition team that is based, before election day, inside a government office or parliamentary office as part of the office's lawful non-partisan operations. Involvement of outsiders and partisans would suggest that the transition team in fact belongs to the political party.
 Note 1 addresses circumstances in which a pre-election transition team might be considered a parliamentary or governmental undertaking that does not belong to a political party.
 For purposes of lobbying and lobbyist registration, public office holders include parliamentary and government employees assisting with the transition, and might include anyone compensated by the Crown for providing transition advice or holding a government appointment to work on transition.
 This rule described in this paragraph also applies to transitions that occur outside the immediate aftermath of an election, including a transition precipitated by the retirement of a Prime Minister or a defeat in the House of Commons.
 Essentially, for five years, all forms of federal lobbying are prohibited, except in-house lobbying on behalf of a business corporation in an amount less than 20 per cent of the employee's duties.