Wallin's corporate board appointments fall well within the guidelines for senators, but such positions should be viewed as conflicts of interest, says Tyler Sommers, coordinator for Democracy Watch, a non-profit citizen advocacy group.
"Because they're allowed to sit on the boards of corporations, [senators] are essentially allowed to act as inside government lobbyists. They can directly push for different legislation and for changing legislation to benefit the boards that they sit on," Sommers says.
Lyse Ricard, the Senate ethics commissioner, was not available for comment.
Historic legacy
The fact that senators can still carry on business activities is part of a historic legacy, Collenette says. When the Senate was established in 1867, it was intended to act as a counterweight to the House of Commons by providing greater regional representation.
Over the decades, says Collenette, senate appointments often became rewards for party loyalists who worked in other fields, particularly high finance.
"Most of them were men from Bay Street, a financial background, and there was no way they would give up that financial background to come up to Ottawa and sit in the Senate," she says. "The whole idea was that the salary wouldn’t be that high, so they could keep their businesses going [on the side].
"Why we have allowed this up to 2013 is beyond me."
The reason the Senate has come under such scrutiny in the past year, Collenette says, is that the existing codes of conduct do not compel senators to be as transparent and accountable to the Canadian public as the elected officials in the House of Commons.
Backbench MPs are allowed to own companies, and a recent analysis by the Huffington Post found that 40 per cent of MPs declare a secondary income.
'Loophole' in the system
Ministers and senior government officials are subject to more stringent rules, and must liquidate any corporate assets or place them in a blind trust.
The reason ministers and parliamentary secretaries are subject to tougher conflict-of-interest rules is because they "have access to the executive, to the government, and know what the heck the government is doing, whereas in theory, the MPs don’t," says federal Conflict of Interest and Ethics Commissioner Mary Dawson.
But Sommers says there is a systemic conflict of interest even among senior government officials, when it comes to freelancing and even daily parliamentary responsibilities.
Federal Conflict of Interest and Ethics Commissioner Mary Dawson, centre, oversees issues regarding extra income among MPs. (Canadian Press)
Ministers and senior government officials must recuse themselves from running corporations and put their investments in a blind trust. But because they themselves appoint the trustee of their investments and have a general idea of what’s in their portfolio, they could still consciously make decisions that benefit them financially, says Sommers.
"The loophole in this system is that so long as politicians are making decisions that apply generally, they're allowed to be in a conflict of interest," says Sommers.