Conflict of Interest and other procedural rules for local government explained
06 September 2018
There has been considerable public discussion in Richmond recently about conflict of interest and other procedural rules for elected officials in local government. These matters are governed by legislation enacted by the Province of BC and the City is providing a summary of these rules to residents as a public service.
Conflict of Interest
The legislation acknowledges that elected officials (who have typically been very engaged in their communities in a wide range of capacities) will inevitably encounter conflict of interest situations. Councillors throughout the Province often maintain active employment and/or engage in businesses while serving as Councillors. The legislation recognizes this reality and imposes high standards on Councillors to ensure that they avoid conflict situations.
On a high-level basis, the legislative requirements are as follows:
Disclosure of Conflict
If a Councillor attending a meeting considers that he or she is not entitled to participate or vote because of a conflict of interest, the Councillor must declare this and state in general terms the reason why he or she considers this to be the case and leave the meeting for the duration of any discussion or vote on that matter.
Councillors are also obliged to report to the City if the Councillor has a direct or indirect pecuniary interest in any contract with the City. The existence of such contract must be reported as soon as reasonably practicable at an Open Council meeting.
Restrictions on participation if in conflict
During Council meetings, Councillors must not participate in discussions or vote on a matter if the Councillor has a direct or indirect pecuniary interest in the matter or another interest in the matter that constitutes a conflict of interest. (A pecuniary interest is a financial interest.)
In addition, if a Councillor has a direct or indirect pecuniary interest in a matter, the Councillor must not:
• remain or attend at any part of a meeting during which the matter is under consideration; or
• attempt in any way, whether before, during or after such a meeting, to influence the voting on any question in respect of the matter.
Exceptions from conflict restrictions
There are exceptions to conflict restrictions. For example, Council members are not considered to be in a conflict of interest if:
• the pecuniary interest of the Councillor is a pecuniary interest in common with all voters in the City generally, such as voting on setting of general property tax matters, where the Councillor is a property owner;
• the matter relates to remuneration, expenses or benefits payable to one or more Council members in relation to their duties as Council members; or
• the pecuniary interest is so remote or insignificant that it cannot reasonably be regarded as likely to influence the Councillor in relation to the matter.
Restrictions on use of insider information
A Councillor must not use information or a record that was obtained in the performance of the Councillor’s office and is not available to the general public in order to gain or further a direct or indirect pecuniary interest.
Obligations on Councillors to make annual public disclosure of their financial assets and sources of income
The BC Financial Disclosure Act requires Councillors to make annual public disclosure of the following:
• the name of each corporation in which the person or a trustee for the person holds one or more shares;
• the name of each business situated or carrying on business in BC and financially remunerating the Councillor as an owner, part owner, trustee or partner;
• the name of each business located or carrying on business in BC and financially remunerating the Councillor for services performed by the person as an employee;
• the name of each organization located in BC and financially remunerating the Councillor for an office held by the person that is not disclosed pursuant to the above provisions;
• the name of the creditor for each debt of the Councillor; and
• a description and location of land in BC in which the Councillor or a trustee for that person owns an interest or has an agreement entitling him or her to acquire an interest.
Such disclosures must be made available to the public for inspection during normal business hours.
Election Campaign Financing
The Local Elections Campaign Financing Act governs local government election campaign financing and disclosure. Highlights of this Act include:
• only eligible individuals may make campaign contribution. An “eligible individual” is an individual who is a resident of BC and who is either a Canadian citizen or a permanent resident;
• an organization (such as a corporation or a union) or an individual, other than an eligible individual, must not make a campaign contribution;
• individuals and organizations wishing to participate in local election campaigns as sponsors of third-party advertising must not sponsor election advertising “on behalf of or together with” a candidate or party;
• the campaign contribution limit is $1,200 per year per campaign to a candidate who is not endorsed by a party; or $1,200 in total per year per campaign for any one party and all the candidates endorsed by that party.
The Community Charter provides that as a general rule, all Council meetings must be open to the public unless the Act expressly permits them to be closed. Council meetings may be closed if the subject matter being considered relates to labour and employee relations, legal matters, land acquisition, land disposition and other matters as prescribed by the Charter. Any Councillor who believes a matter should not be heard at a Closed Council meeting can ask for the matter to be discussed at an Open Council meeting and then the issue is put to a vote by Council.