Question Period Note: DIRECTIVE ON CONFLICT OF INTEREST – NEW REQUIREMENTS

How is conflict of interest prevented and managed in the public service?

• By virtue of the terms and conditions of employment, all public servants are legally required to avoid situations that may lead to a conflict of interest.

• Employees must report apparent, real or potential conflict of interest situations to their deputy heads and any change in their personal interests that could give rise to a conflict.

• In addition, Treasury Board has made deputy heads themselves responsible for preventing and managing situations that may lead to a conflict of interest within their organizations.

• This work is supported by senior officials in each department with specific responsibilities to putting in place a system to prevent, identify, and address any situations that may arise.

• These efforts include ensuring that reporting procedures and controls are in place and that conflicts of interest and conflicts of duties are identified; providing advice and assistance to employees on how to prevent and resolve conflicts of interest, and; documenting and recording issues that may arise.

The Treasury Board’s new Policy on People Management and the Policy on the Management of Executives and related directives, including the updated Directive on Conflict of Interest, came into force on April 1, 2020.

The objective and expected results of the Directive is to minimize risks associated with conflict of interest and conflict of duties situations.

Compliance with the Directive is a condition of employment for those employed within the core public sector (as defined by section 11 (1) of the Financial Administration Act). Organizations outside the core have their own conflict of interest policies which mirror the Directive on Conflict of Interest. Public officer holders are bound by the Conflict of Interest Act. These include ministers, ministers of state, parliamentary secretaries, the Chief Electoral Officer, the Parliamentary Budget Officer, ministerial staff, ministerial advisers and most Governor-in-Council appointees, some ministerial appointees and any persons designated to be subject to the Act by the Governor in Council.

The Policy on People Management issued on April 1, 2020 formalizes the requirement for deputy heads to appoint one or more designated senior official(s) responsible for the prevention and resolution of conflicts of interest and conflict of duties. (This was previously a requirement of the public service code but was not retained when the code was updated in 2012).
Section 4 of the Directive sets out the key requirements.
Senior officials responsible for administering the directive must
o ensure that reporting procedures and controls are in place; conflicts of interest and conflicts of duties are identified as well as identifying the types of assets and liabilities that must be reported and the positions that may be a risk for post-employment conflicts of interest;
o provide advice and assistance to persons employed and that they are informed about decisions taken to prevent and resolve conflicts of interest ensuring that these are documented and that records are maintained in accordance with the Privacy Act;
o to inform persons employed about the Directive and that its compliance is a condition of employment where non-compliance may result in consequences;
o as authorized by the deputy head, Senior officials approve financial mitigation strategies and approve reimbursement of reasonable administration costs incurred by persons employee; and, when requested by the Treasury Board of Canada Secretariat, Senior officials must provide data on conflict of interest and conflict of duties.

Persons employed must:
o identify, prevent and resolve conflict of interest or conflict of duties situations during their employment and when they leave the public service;
o report in writing to their deputy head all outside employment and activities, non-candidacy political activities, assets, liabilities and interests that might give rise to a real, apparent or potential conflict of interest as well as any concurrent or competing official responsibilities that gives rise to a conflict of duties situation;
o all private interests or outside employment or activities must not be incompatible with their official duties or impair their ability to perform their ability to perform their duties and responsibilities in an objective and impartial manner;
o implement a financial mitigation strategy as directed by their deputy head and seek approval before entering into a contractual arrangement with the Government of Canada;
o avoid preferential treatment or take advantage of information that is not available to the public as well as avoid using government property for private benefit;
o all gifts, hospitality or other benefits that may give rise to a conflict of interest must be refused and without prior approval from their deputy head, they must refrain from solicitation of benefits from outside entities that may have dealings with their organization; and,
o before leaving the public service, they must report to their deputy head all intended future employment or activities that might give rise to a conflict of interest.
The Directive provides additional guidance in appendices on: A) mandatory procedures for preventing and resolving conflicts of interest and conflict of duties situations; and B) standards for preventing and resolving financial conflict of interest.

• The Treasury Board’s new Policy on People Management and the Policy on the Management of Executives and related directives, including the updated Directive on Conflict of Interest, came into force on April 1, 2020.