The Canadian Election: A Public Policy Practice Addresses A Change In Government

Wednesday, March 1, 2006 - 01:00

Editor: Would each of you tell our readers something about your background
and professional experience?

Reporter: Between 1994 and 2003, I worked at the senior levels of the
Canadian government as a political aide. My experience included working as the
Chief of Staff to the Minster of Justice and Attorney General of Canada, the
Minister of Health and the Minister of Industry. Throughout that period and
still, I have been a very active member of the Liberal Party of Canada. I
presently serve on the Party's National Executive, its governing body, as
Secretary Treasurer.

Benoit: I am a lawyer by education and training, and I was engaged in
practice in Alberta for a short time. I came to Ottawa in the previous
Conservative administration and worked in many capacities, including as Director
of Policy and Research for the leaders of the party through those years. I went
on to become Executive Director of the Canadian Corporate Counsel Association
and then moved to the American Corporate Counsel Association as Vice President
and Deputy General Counsel. I should mention that I was with ACC when
Sarbanes-Oxley was enacted, and we were involved on the advocacy front with
respect to provisions of that statute. After several years in Washington with
ACC, I returned to Canada as President of the Canadian Investor Relations
Institute, where I was also focused on financial communications and compliance
with securities legislation. During this period I continued my involvement in
the public policy and political arenas.

When I was given the opportunity to join Fraser Milner Casgrain LLP's public
policy group, it represented an opportunity for me to combine my political
experience with my legal background. The firm's approach to government relations
is very substantive in relation to specific legal or regulatory issues, and I
find that an excellent fit for my particular expertise. I have been with the
firm since the middle of last year.

Editor: Speaking of which, would each of you share with us some of the
things that attracted you to the firm?

Reporter: When I left the employ of the Canadian government almost
three years ago, I wanted to be able to apply professionally the knowledge and
skills I had gained during my time in the public sector. I also wanted to
continue my keen interest in legislation and public policy. Fraser Milner
Casgrain LLP was appealing in that it possessed a full-time in-house capacity to
advise clients on government relations matters, something unique for a law firm
in Canada. That is to say, our government relations practice is not an adjunct
or afterthought that rides on the coattails of other practice groups. It
constitutes a full-time endeavor. The firm also included people with whom I had
worked in the past - former firm National Chairman and now Senator David Smith
and Richard Mahoney are but two examples - and that served to make it all the
more attractive.

Benoit: Fraser Milner Casgrain LLP is one of the most progressive
firms in Canada and, for me, one of the real indicators of the kind of foresight
that the firm's leadership possesses is the recognition of the value to clients
in having a stand-alone practice group in the public policy area. The support of
Doug Black, who heads the firm's energy practice and serves as the firm's Vice
Chair, and Tom Houston, managing partner in Ottawa, is a validation of the
firm's commitment to this practice and to the clients it serves. All of these
things came together to convince me that this was an opportunity not to be
missed.

Editor: Please tell us about your practice. How is it evolving?

Benoit: As corporate Canada works to understand the complexities of
government and what is required if it is to have a voice in public policy
discussions, our practice is emerging as an important, and mainstream, legal
discipline. But this is a two-way discussion. We also work to ensure that
government understands the complexities of the corporate arena and of the issues
that corporate Canada confronts. Our practice group will develop in response to
input from each of these sides of the discussion. In this respect, it is a very
interesting time to be building this kind of practice group. A change in
government emphasizes the importance of understanding the relationship between
government and the engine that drives the economy.

For example, the tax treatment of income trusts involved a number of
governmental decisions that directly impacted that sector. I believe that better
communication prior to those decisions having been made may have resulted in a
different, and better, tax treatment. In the absence of such communication,
however, it is no surprise that an unfavorable rule or regulation may result.
Being able to understand where government is going and, perhaps, to have a say
in the outcome is crucial to many corporations. Our practice group is in a
position to add significant value to any such corporate strategy.

Editor: Please tell us about the public policy practice group.

Reporter: The practice of government relations at FMC has existed for
several years now. Over the last three years or so, however, the firm has
formalized its existence as a practice group. At present, we have a core of four
full-time practitioners based in the nation's capital, Ottawa: Roxanna and
myself, Lorna Counsell and Richard Mahoney. This group also works closely with
the Hon. Brian Tobin, former federal Industry Minister and Premier of
Newfoundland and Labrador. We are committed full time to this practice and, in
addition, we are able to draw upon the expertise of about 20 senior lawyers who
reside at different FMC office locations across the country and who participate
in our efforts as required. These attorneys all have considerable experience and
expertise in dealing with government. They also bring enormous substantive
expertise - in the energy sector and financial institutions, for example - to
our practice and, of course, they lend real credibility to our work and equally
great value to the case that we present to government on behalf of clients.

Editor: Does the practice focus on the federal government?

Reporter: The Government of Canada is certainly our focus. However, we
regularly represent clients' interests with various provincial governments as
well. It is extremely important in this regard that our firm has a truly
national platform. For example, Fraser Milner Casgrain LLP is one of the largest
law firms, if not the largest, in Western Canada. We have been a market leader
in Alberta, the home of Canada's energy sector, for many years.

Editor: Who are the clients that the group serves?

Reporter: Our clients cover a wide range of industry sectors,
including energy, telecommunications, aerospace and pharmaceutical. The energy
sector is one of the most active for us. It presently is the most robust sector
in the Canadian economy, and it is heavily regulated by government - at both the
federal and provincial levels. There is considerable intersection between the
energy sector and a variety of regulatory bodies - both federal and provincial -
and it is important to possess the resources to be able to handle, and
coordinate, a series of simultaneous discussions with the regulators.

Benoit: Many of our clients operate internationally. While a
significant number are based in Canada, many of the large oil and gas companies
operate all over the world, including the U.S. These are very significant
enterprises with global recognition. In addition, many of the clients we
represent are U.S. based with significant operations in Canada, or are
subsidiaries of U.S. companies, and having the right Canadian counsel is very
important. We have an office in New York which is largely concerned with this
aspect of the firm's practice. In Houston, in addition, we have a number of
longstanding clients with significant operations in Canada. They have a great
interest in the Canadian political and legal environment in light of their very
substantial interests in the country.

Editor: Please tell us about some of the group's projects. For starters,
how do you go about staffing a project? Are you able to draw upon a variety of
disciplines and practice groups from within the firm?

Reporter: We have acted on behalf of a client with regard to the
Alaska Pipeline Project, something that I am sure is of great interest to many
American readers. That project is an excellent example of the interaction of all
levels of the Canadian government, federal, provincial and territorial, in an
undertaking that draws upon the expertise of a wide range of energy, corporate
finance and transactional lawyers, in addition to the advocacy and regulatory
talents of our group. The U.S. government and the state of Alaska are also key
players in that project.

While the client undertaking is particularly noteworthy, Roxanna and I work
closely with our partners in Calgary on energy files on an ongoing basis. We
have had numerous instances where we have been able to bring the multifaceted
elements of the firm's expertise to a complex set of issues that a client is
facing. It is the national platform and the depth of expertise across the firm
and across an array of disciplines and practice areas that permit us to act in
Calgary and Edmonton with the same degree of confidence that we are able to
bring to the implementation of a project in, say, Ottawa or Toronto or Montreal.

Editor: Canada has just completed a federal election that has resulted in
significant changes in Parliament and a soon-to-be announced new government. May
I assume that at least two of you are looking at the election through somewhat
different eyes?

Benoit: As I indicated, I have been actively involved in
conservative politics for most of my adult and professional life. That continued
with the new Conservative Party, where I was on the planning committee for our
first policy convention held in March of 2005 which established the policy
positions leading to the current electoral platform. Throughout the recent
election campaign, I was involved with the national communications and messaging
efforts, assisted with issue briefings and worked with several members of
Parliament in their campaign efforts. I continue to be involved and to provide
advice as Stephen Harper puts his cabinet and senior team together.

Reporter: Prior to joining the firm, as I have indicated, I served as
aide to a senior Minister in various portfolios in the previous Liberal
government. In addition, I have been a member of the National Campaign Committee
in the federal elections of 1997, 2000 and 2006 on behalf of the Liberal Party.
I also serve as Secretary-Treasurer of the National Executive of the Liberal
Party, which is the governing board of the Party. I continue to remain involved
in Party activities. The outgoing Prime Minister, Paul Martin, has indicated
that he is retiring as Leader of the Party. We are now entering a phase that
will involve choosing a new Leader, who will become the Leader of the Opposition
in Parliament.

Editor: The commentators have indicated that this election does not
represent a sea change so far as Canadian policies, both internal and with
respect to its relations with other countries, are concerned, but it does
represent a change. Our readers would be particularly interested in your
thoughts as to whether Prime Minister Harper and his government are going to
attempt to resolve some of the issues that have arisen between Canada and the
United States.

Benoit: Inasmuch as Canada is a mature democracy with stable
government, a change does not presage any fundamental change of direction. This
election is no departure from that proposition. I hasten to add, however, that
it has been 12 years since Canada has had a change in government. After such a
period of time, there are bound to be some shifts in direction and approach. I
think we should view this election in that context.

Stephen Harper has been clear about the importance he places on Canada's
relationship with the United States. A cordial relationship, one with open lines
of communication, is something he wishes to have as the guiding principle for
his dealings with the U.S. A relationship based on mutual respect does not mean,
however, that the parties must agree on all issues all of the time. Former Prime
Minister Mulroney, for example, was able to accomplish a great deal in terms of
his relationship with the U.S., including major advances with respect to the
free trade discussion, while at the same time disagreeing with the U.S. on a
number of important issues. So long as there is mutual respect and open
communication, it is possible to move forward without agreement on every issue.
That is the approach that Prime Minister Harper proposes to take.

Editor: Is there an opportunity for the two governments to agree on the
softwood lumber dispute?

Benoit: I certainly hope so, but it is a difficult issue and one of
long standing. The Conservative Party's position is to continue to demand that
the United States play by the rules it accepted in signing the NAFTA Agreement
and abide by the judgments of the NAFTA tribunals. There will be
government-to-government discussions on this matter soon. There is, of course, a
recognition that there are domestic political issues in the U.S. that impact the
resolution of this matter. A strategy to resolve the issue is going to have to
take cognizance of that fact, I think.

Editor: And the Kyoto Protocol?

Benoit: Prime Minister Harper has talked about a "Made in Canada" plan
to deal with greenhouse gas emissions, something he wishes to develop in
coordination with other major industrial countries. That suggests that there is
a possibility of discussions to move the issue forward. Even though Canada has
signed and ratified the Kyoto Protocol, the results to date have not been
encouraging. We, together with our partners, must find a way to deal with the
actual emissions. There is commitment for movement on that front here in Canada,
and I think the successful experiences of other countries on this matter will be
incorporated into the discussion.

Editor: How about Canadian participation in a missile-defense shield for
North America?

Benoit: Prime Minister Harper has said that, as a member of NORAD,
Canada has an obligation to the rest of the partnership to ensure that any
initiatives are fully discussed and that the decision-making process is clear.
Parliament must be involved in these types of discussions. One of the problems
that Mr. Harper has had on the missile-defense discussion had to do with the
inconsistencies in Canada's position. He believes that it is essential for
clarity to be established, and for Canada to approach any decision on this
matter in a clear and consistent manner. That will be his approach, and at the
appropriate moment it will result in a clear decision.

Editor: In light of the fact that the Conservatives won a little more than
36 percent of the popular vote, when do you think that another national election
will have to be called?

Reporter: A minority government, which is what this election has
resulted in, means that on matters of "confidence" - budgets and like measures -
the government requires the support of a sufficient number of members of the
House of Commons - including its own party members but also those of other
parties - if it is to continue. The length of that government's term depends,
accordingly, on the dynamics of the House of Commons and on the issues that
arise.

In the near term, we are likely in for a period of stability as the Liberal
Party is going to go through a leadership transition. That process could take as
long as a year.

Benoit: Mr. Harper has indicated that he will not formally align or
make an agreement with any of the other parties to form a coalition. This is
going to remain a minority Parliament, so on any issue the government must have
the support of a majority of the House of Commons. That requires negotiation
with the other parties to ensure that the government's bills are passed. The
risk of a confidence motion lies in a money bill. A government defeat on a money
bill is an indication of a lack of confidence on the part of the members of
Parliament and could trigger an election. Notwithstanding this state of affairs,
there are a number of things in the Prime Minister's agenda that we expect to
see move forward. There is also an expectation that the negotiations on several
issues are going to be very interesting.

Reporter: The Liberal Party was in a minority situation for a year and
a half leading up to the recent election. For lawyers in a public policy
practice such as ours, there is a significant difference between a majority
government and a minority government. With the latter, in addition to dealing
with the government of the day, it is important to be mindful of the other
parties that are part of the decision-making process. In a minority Parliament
situation, many different factors come to bear on the making of legislation.
Standing committees in various areas have much greater clout and influence. The
entire legislative process becomes more complicated.

Editor: President Bush and Prime Minister Harper appear to have similar
ideas on at least some current public issues. Over the past 20 years or so there
have been times when the leadership of our two countries has been pretty well
aligned, and other times when that has not been the case. How important is it
for the leaders of Canada and the U.S. to be in sync?

Benoit: As I say, the channels of communication must be open, and the
discussion must be based upon mutual respect. Each of President Bush and Prime
Minister Harper is the leader of a sovereign nation, and they are bound to
differ on some issues. What is important is that each country be able to present
its position in a clear and positive way that will permit the other country to
accept, accept in part, or decline to accept that position in a way that permits
the discussion to continue. Former Prime Minister Mulroney was in office during
the terms of Presidents Reagan and George H.W. Bush, and there were a number of
areas of disagreement and others where substantial progress was made. At no time
was there anything that approached a fundamental conflict injurious to the
relationship. That has defined our relationship for almost two hundred years,
and I have every expectation that it will continue to guide our leaders for the
future.

Editor: And the implications of the election for FMC's public policy
group? What kinds of projects do you see coming your way post-election?

Reporter: Our immediate task is to focus on providing our client base
with insight on a number of issues that the change in government brings. A
matter of great importance is, of course, the composition of the ministries of
the new government, and the public positions that the members of that government
have taken on a variety of issues in the past. There is an expectation on the
part of our clients that we will impart accurate and timely information about
the period we are in now - the new members of the cabinet and which policy areas
are likely to receive the most intense focus.

Benoit: The initial commitment of Prime Minister Harper is to put the
Federal Accountability Act to the House of Commons. It deals with a number of
issues that derive from the way that government operates, and it is meant to
address many of the allegations of wrongdoing with respect to government funds
which played an important part in the recent election. Interestingly, a number
of bills are pending in the U.S. on lobbying and governmental relations
activities which reflect a similar concern. The Federal Accountability Act will
establish a new framework for government relations and, of course, it will have
an impact on the practice of our group. At this point it is difficult to assess
that impact in any detail, but in light of the fact that this is a practice that
is focused on the substance of legislative change - as opposed to the public
relations aspects of dealing with government - I think we are well placed to
align our clients with the new framework.

Editor: As you know, our readership consists of corporate counsel, general
counsel and the members of corporate legal departments. Is there a particular
message concerning this election that you would like to convey to that
readership, most of which resides in U.S. corporations?

Benoit: Now is a very good time for foreign corporations to take a
look at what they are doing to implement their Canadian strategy. It is
important for them to assess what the change in government means for their
operations. We can expect a consolidation of government ministries, which
entails a consolidation of responsibilities, and streamlining in government
operations. All of that is going to have an impact. In the near future we will
be speaking at a conference co-sponsored by ACC and MCC with respect to how
companies can implement strategies that are aligned with Canada's move forward.
I think that your corporate counsel readership should stay
tuned.

Please email the interviewees at roxanna.benoit@fmc-law.com or cyrus.reporter@fmc-law.com with questions about this
interview.