Information & Ethics Committee on Oct. 4th, 2011

[The Clerk of the Committee, Mr. Chad Mariage]

Honourable members,

Yesterday, I received a letter of resignation from Mr. Nathan Cullen, the chair of the committee. The letter was sent to all the members of the committee, for their information.

As a result of receiving this letter, a vacancy has occurred in the office of chair of the committee.

It is now incumbent upon me as clerk of the committee, pursuant to Standing Order 106(2), to proceed immediately to the election of a chair.

I want to remind members that this same standing order provides that the chair of the access to information, privacy, and ethics committee be a member of the official opposition.

I'm now ready to receive motions to that effect.

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you very much, Mr. Clerk.

At the outset I'd just say that we wish Mr. Cullen well in his endeavours, and we would like to nominate Madame Crowder for the position of chair.

[The Clerk]

Mr. Del Mastro moves that Ms. Crowder be elected chair of the committee.

Are there any other motions?

Seeing none, all those in favour of the motion?

(Motion agreed to)

I declare Ms. Crowder duly elected chair of the committee and would invite her to take her seat.

[The Chair, NDP, Jean Crowder]

Good morning, fellow committee members. I look forward to working with this committee. I understand you have some business at hand, so I'm suggesting we get right to it.

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you very much, Madam Chairman.

We do have business at hand, and we're eager to hear from Mr. Mayrand this morning.

At the previous meeting of the committee, we heard from Ms. Mary Dawson, the Conflict of Interest and Ethics Commissioner. She indicated she had written me a letter in which she had dismissed charges.

I have in hand the only correspondence I received from Ms. Dawson, and in fact it indicates that she has written to Nycole Turmel, interim leader of the NDP, to ask for more information on the issue and it includes a copy of my correspondence. Nowhere in the letter does it indicate that she has in fact made any findings. It's the only correspondence I have, in fact, received from her. I'd like to submit it to the committee as evidence, for circulation to all members.

[The Chair, NDP, Jean Crowder]

Thanks, Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

I would simply add, Madam Chairman, that I didn't circulate that letter because it's stamped confidential. But since it has been referred to in the committee, I'd consider it no longer to be confidential.

[The Chair, NDP, Jean Crowder]

Thank you for that.

Mr. Mayrand, I understand you have some time constraints this morning. Could you please let the committee know what time you need to leave?

[Marc Mayrand, Chief Electoral Officer, Elections Canada]

I have another commitment with the procedure and House affairs committee at 11 a.m. at my office. I would appreciate if I could be discharged around 10 a.m. or so.

[The Chair, NDP, Jean Crowder]

Thank you.

I understand you have about a 10-minute presentation, and then we'll go to the committee members for questions and answers.

I'll turn it over to you then.

[Marc Mayrand]

Thank you, Madam Chair.

It is my pleasure to appear before the committee today. I appreciate your understanding regarding my busy schedule this morning. Thank you for letting me leave at 10:00 a.m.

You have asked to hear from me on the motion regarding the union sponsorship of the NDP 2011 spring convention. At the outset, I would like to make a few clarifications regarding my role as Chief Electoral Officer and that of the Commissioner of Canada Elections.

As Chief Electoral Officer of Canada, I am responsible for exercising general direction and supervision over elections and for administering the Canada Elections Act. In that regard, I may be called upon to explain how I exercise my mandate, including the manner in which the act is interpreted and applied by my office.

I am here today to talk about the rules regarding contributions and, in general terms, how these rules adopted by Parliament are interpreted by my office.

In so doing, however, I have to be mindful of the role and responsibilities of the Commissioner of Canada Elections. Contraventions of the Canada Elections Act are sanctioned almost exclusively by statutory offences that may give rise to prosecutions. By its very nature, such a process requires the conduct of a thorough and independent investigation that meets the highest standards. For this reason, the act provides for the appointment of the commissioner, who is responsible for ensuring compliance with and enforcement of the act.

Subject to a few statutory exceptions, it is for the commissioner to decide when an investigation should be conducted. He conducts his investigations independently of my office and is solely responsible for deciding whether a matter should be referred to the Director of Public Prosecutions, or whether another enforcement action, such as a compliance agreement, is warranted in a particular case.

My appearance today relates to allegations that have been made and widely reported in the media of possible contraventions of the act. These involve alleged contributions made by ineligible entities.

In my previous appearances before this committee, I have been careful to explain the administration of the Canada Elections Act by my office without impeding the work of the commissioner, and I want to maintain that line today. While I can explain the rules regarding political contributions, I will not comment on the specific allegations that have been made.

The Canada Elections Act has a number of rules regarding contributions to political entities, including rules on who may contribute and how much. These rules have been put in place in recent years to avoid the undue influence of a single, large contributor. Under the act, only individuals who are either Canadian citizens or permanent residents may make a contribution, whether monetary or non-monetary. The act also provides that a contribution by an individual to a registered party cannot exceed $1,000 annually. This limit applies to parties registered in an electoral district association, nomination contestants, and candidates. These limits are adjusted annually for inflation. The Canada Elections Act also prohibits circumventing contribution rules as well as collusion to circumvent those rules.

It is important to keep in mind that political parties have a variety of possible revenue sources that are not contributions and that are not subject to these rules. Political parties may receive various subsidies, including the quarterly allowance and a partial reimbursement of their election expenses. Beyond that, other political parties may also have investment or commercial revenues. For example, a number of federal parties own or have historically owned buildings. The party may rent the building, or part of the building, and may decide to sell the building. To the extent that such transactions are true commercial transactions done at fair market value, they do not involve the making of any contribution. However, if someone pays more than the fair market value for a good or service provided by a party, this would constitute a contribution and be subject to the restrictions I mentioned earlier.

With respect to the matter that is before the committee, it is important to keep in mind that, while labels such as advertising and sponsorship are sometimes useful in drawing distinctions, they may also confuse the matter. When a political party receives money from another entity, the key issue is whether the amount provided is a contribution. If the money is provided in the context of a transaction for goods and services, and the amount corresponds to the fair market value of the good and services, there is no contribution.

In the case of advertising space allegedly sold by a party, the first question to be asked is whether there is a market for the advertiser such that it may truly be considered a commercial transaction. In my earlier example of a building owned by a party, it might be possible for the party to sell space on its outer walls for street advertising. If there is indeed a market and the possibility of a genuine transaction, the second question is whether the amount paid for the advertising space represents fair market value. If the amount received is greater than the value of any service provided, then a contribution will have occurred.

Determinations regarding the existence of a market and fair market value of a good or service are essential questions of fact that involve careful consideration of all circumstances in a particular transaction.

A situation was recently brought to my attention regarding alleged funding of the New Democratic Party convention last spring. I have referred the matter to the Commissioner of Elections, who is looking into it. Under the circumstances, I will not comment on this situation, but I am otherwise happy to assist the committee and answer questions members may have regarding relevant rules.

Thank you.

[The Chair, NDP, Jean Crowder]

Thank you, Mr. Mayrand.

I will now go to the committee members, starting with Mr. Angus.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, Mr. Mayrand, for coming. We have immense respect for you because the obligation to ensure accountability in the electoral process is the cornerstone of democracy. I must say, you seem like a good and serious guy, but I'll tell you, all members of Parliament live in fear of having Elections Canada phone and say they haven't signed off on this form or that. You are thorough and hold us very much to account.

I'm interested in your comments today. It's incumbent on members of Parliament, especially members of the ethics committee, to be able to differentiate between legitimate issues and specious claims for investigation. For example, my colleague Mr. Del Mastro has been raising a ruckus about advertising at conventions. I was wondering if he fully understood the rules. I went to your Elections Canada site, and I found it very helpful. There is a fact page. It's like convention spending for dummies. It asks if it's legal for a “corporation, trade union or unincorporated association [to sponsor] an event held by a registered party, including a convention, or otherwise buy visibility at such an event by holding, or paying for, a reception at the event or providing or paying for signs, flags, pens, notepaper, etc. advertising the entity”.

The answer you provide on your facts page is that there is nothing wrong with that as long as the entity pays full commercial value, not less or more than what is legitimate. Is that true?

[Marc Mayrand]

Correct.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

Now, the New Democrats have sold advertising at three recent conventions that I was at: 2006, 2009, and 2011. Are you in receipt of all the audited statements for those conventions?

[Marc Mayrand]

Not for 2011, which is due in July next year.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Let's talk about 2006 and 2008. Those were returns that were given to you. The advertising was defined by third-party independent auditors before they were moved on to convention. Did you flag violations in those audited reports?

[Marc Mayrand]

The audited financial return would not likely allow us to detect this kind of situation. It's not detailed enough to identify any revenues, commercial revenues, in enough detail to ask questions on this matter.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Did you have any reason to suspect that illegal activities were—

[Marc Mayrand]

There was a media report regarding the convention of 2009 that we've been looking at, again, largely similar to the allegations that we're having for the 2011 convention.

[Charlie Angus, NDP, Timmins—James Bay, ON]

In the allegations that Mr. Del Mastro made last week, where he said the New Democrats flaunted the law and they accepted gifts from a third party, particularly that NDP leadership had been given amounts of $25,000, $35,000 or $50,000 in gifts, did he present that evidence to you for investigation?

[Marc Mayrand]

No, I think that's part of various media reports that have been published on the matter.

[Charlie Angus, NDP, Timmins—James Bay, ON]

No, these were his statements to our committee. He had evidence that we received illegal gifts in the nature—

[Marc Mayrand]

I haven't received any correspondence from Mr. Del Mastro.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Haven't the parties presented that evidence to you? They said as well that they had evidence that we had received “tens of thousands of dollars of illegally received donations”. Now that would seem to be the cornerstone of a serious major investigation. Did they present the evidence of these illegal gifts that were being given to the top NDP leadership?