Two former provincial cabinet ministers would have been barred by conflict of interest legislation from the senior positions they’ve taken with engineering services and nuclear energy giant AtkinsRéalis if they’d been in federal politics, an expert in government and corporate ethics has concluded.
Former New Brunswick natural resources minister Mike Holland and Ontario energy minister Todd Smith both left their positions over the summer and signed on with Montreal-based AtkinsRéalis within a couple of weeks of quitting politics. Holland resigned from cabinet in late June and was appointed as Atkins’ director of business development for North America in early July. Smith quit in mid-August and was hired as vice-president, marketing and business development for Atkins subsidiary Candu Energy two weeks later.
Since then, the September 19 by-election in Smith’s former riding of Bay of Quinte has been declared a toss-up, Queen’s Park Briefing reported Wednesday. Polling shows a statistical tie between Liberal candidate Sean Kelly and Progressive Conservative Tyler Allsopp at 35%.
“This wasn’t a race anyone expected to be close,” said Liaison Strategies principal David Valentin. But now, “the Ontario Liberal vote is up from 18% to 36% since the 2022 election. Meanwhile, the PCs have dropped from 49% to 35%. This is now anyone’s game.”
Holland’s and Smith’s career moves are permitted by New Brunswick’s and Ontario’s conflict of interest rules, respectively. Both provinces set 12-month bans on activities like direct lobbying after a former official leaves office, but do not bar other employment with a company that does business with the official’s former government.
Laurence Myre Leroux, AtkinsRéalis’ manager of external communications and media relations, said both new hires received guidance from their provincial integrity commissioners before accepting their new gigs.
“While we understand your concerns and the sensitivity of hiring former elected officials, we want to make it clear that we comply with all the rules applicable to this situation, and that we are exercising increased diligence to ensure that guidelines are followed,” Myre Leroux wrote in an email.
She said Atkins was “delighted” to welcome Holland and Smith into the fold “given the renewed interest in nuclear power in many jurisdictions”.
But Democracy Watch co-founder Duff Conacher said neither official would have been allowed to make the move if they’d been serving in the federal cabinet. And Smith would have been barred by Ontario rules if he had been working as minister’s staff, rather than as minister.
A Preceding Transaction
“At the federal level you wouldn’t be allowed to do what they did,” Conacher told The Energy Mix.
“There’s a preceding transaction, a negotiation they provided advice on. They were both quoted in AtkinsRéalis’ news release.”
That was a reference to an April 13, 2022 release in which Candu Energy and Saint John, New Brunswick-based Moltex Energy announced a “strategic partnership to advance the development and deployment of next-generation Small Modular Reactor (SMR) nuclear technology in Canada,” including a “first of a kind” installation in New Brunswick. In that release, Holland and Smith both showed up as early boosters for the partnership.
“New Brunswick welcomes investment in clean energy, especially as it builds on the province’s established core of expertise in nuclear technology,” Holland said. “This agreement contributes not only to the growth of long-term, high-quality jobs in New Brunswick’s energy sector; it also recognizes the leadership role of both Moltex and the province in advancing the next generation of nuclear technology.”
“I’m thrilled to welcome this new partnership between Moltex and SNC-Lavalin that builds our provincial energy industry, one renowned for its talented work force and strong nuclear supply chain,” Smith added. “This partnership enhances our clean energy advantage and reputation as a global hub for SMR expertise, making Ontario an even more attractive place to do business and create jobs.”
The release cited Candu Energy as a subsidiary of SNC-Lavalin, the politically connected but often deeply troubled global firm that eventually rebranded as AtkinsRéalis in September, 2023. But not before it set up Candu Energy by acquiring key commercial nuclear contracts, intellectual property, and personnel from federally-owned Atomic Energy of Canada Ltd. in 2011.
‘You’re Never Allowed’
Neither Holland nor Smith would have been allowed to join AtkinsRéalis if they were bound by the federal Conflict of Interest Act, Conacher told The Mix.
“You’re never allowed to act on behalf of any person or organization connected with something you were involved with in government. It’s not 12 months. It’s never. You’re never allowed,” Conacher said.
“And then secondly, you’re not allowed to give advice to anyone using confidential information,” he added. That amounts to a blanket restriction because “they learn things every day that are not disclosed,” which means all the advice a former cabinet official gives is based on confidential information.
“How do you unknow what you know and then give advice pretending you don’t know what you know? It’s impossible.”
That concern doesn’t apply in New Brunswick or Ontario, and Conacher said New Brunswick’s conflict of interest rules are the weaker of the two. In mid-August, Holland was listed in the federal lobbying registry as an AtkinsRéalis senior officer whose lobbying activities represented more than 20% of his duties.
Other Ways to Be Useful
But direct lobbying isn’t the only way, or even the most useful way, a former cabinet minister can help out a new corporate employer.
If a provincial ban applies only to lobbying, “you just don’t make the representation,” Conacher explained. “You give strategic advice to the company’s lobbyists on who they should be talking to, who’s the real decision-maker in cabinet, and what you should be saying to make something go through smoothly or get some extra benefit, like a subsidy or a [deadline] extension without any penalty. And that’s why they’re hired—because they have that inside knowledge.”
Although the federal government and every province have some form of ministerial committee on policy and priorities, “it’s hard to tell from the outside who really holds the power in a government, and who’s the real decision-maker on any issue,” he added. “People on the inside know this stuff, and that’s valuable information because you want to lobby the real decision-maker, not the person who’s identified as the decision-maker.”
In Ontario, the rules are more rigorous for ministerial staff than for the cabinet members they work for. Conacher said the Public Service of Ontario Act sets no limit on a ministerial staffer’s duty to withhold confidential information from a future employer, and prohibits their use of that information in future businesses or undertakings.
“In other words, if Todd Smith were former ministerial staff instead of a former minister, he would not have been allowed to take this job. And that’s perverse, because he had more power in government as a minister than his ministerial staff had.”
AtkinsRéalis spokesperson Myre Leroux told The Mix the company “has implemented a first-class integrity programto promote and facilitate ethical decision-making; this program includes rigorous internal controls designed to reduce or eliminate the risk of real or perceived conflicts of interest.” The seven-page document [pdf] deals primarily with disclosures: it states that having a conflict of interest (COI), real or perceived, “does not constitute wrongdoing or a breach to our Code. However, not deliberately disclosing a COI situation is a breach of the Code and of the terms and conditions of employment, which may lead to disciplinary measures.”
Based on that procedure, Myre Leroux said, “our Integrity team carried out a full analysis of Mr. Holland’s file and Mr. Smith’s file prior to their hiring.”
Thank you for the excellent reporting!
So necessary to understand, and frankly even become aware of this.
Thanks Michael!