Bill C-24 (Historical)

An Act to amend the Canada Elections Act and the Income Tax Act (political financing)

Canada Elections Act

[Ted White, Canadian Alliance, North Vancouver, BC]

Mr. Speaker, my very next sentence was leading up to what all this really illustrates. There are problems on the government side and that is what Bill C-24 is really about. The Prime Minister is trying to deflect these problems by claiming that there is a perception of problems and that he has introduced this bill to take care of all those problems, but in fact it definitely will not take care of them.

Because it will not take care of the problems, I move:

That the motion be amended by deleting all of the words after the word “That” and substituting the following therefor:

“Bill C-24, an Act to amend the Canada Elections Act and the Income Tax Act (political financing) be not now read a third time, but be referred back to the Standing Committee on Procedure and House Affairs for the purposes of reconsidering clause 40 with a view to investigating ways in which all taxpayer subsidies for political parties could be completely eliminated”.

[The Acting Speaker (Mr. Bélair)]

I am signalling to you that you are somewhat diverging from the subject at hand. We are discussing Bill C-24. Please come back to the matter.

[Ted White, Canadian Alliance, North Vancouver, BC]

Mr. Speaker, I will go back to talk about the raising of money. As I said earlier in my speech, we just simply do not believe that political parties should take money from taxpayers. They should be required to raise the money from the people who they claim to represent.

The Prime Minister said that we needed the legislation to remove the perception that the Liberal Party was giving lucrative contracts, grants and loans to political supporters, and he is right. Bill C-24 would remove the perception that these things are not happening because there will not be any corporate donor trails for the Canadian Alliance to follow to reveal the corruption. However Bill C-24 would not change the reality of political patronage and untendered contracts being awarded to supporters of the Liberal Party.

There will still be untendered contracts awarded to friends and relatives. There will still be payments for reports that do not exist. There will still be ministerial interference in the approval of loans and grants by government agencies, and it will be almost impossible for us to trace those connections.

The Prime Minister will still be free to make phone calls to the Business Development Bank of Canada and order them to give loans to his friends. It will not change any of that at all. The bill is a fraud. It is an excuse to take taxpayer money and give it to political parties, and it will not make the slightest bit of difference to the awarding of untendered contracts and improper practices that are occurring daily on that side of the House.

While all this is going on, it will be taxpayers who will be watching the Liberal government shovelling money out of the treasury and into the coffers of political parties.

As I said, the Liberals claim they introduced Bill C-24 to deal with the perception that there were problems over there, but there are problems over there. Many of those problems are presently with the RCMP for investigation. The problems were revealed for the main part in response to attacks by opposition parties, particularly the Canadian Alliance, over what appeared to be links between the donations made by corporations and individuals to the Liberal Party of Canada and the subsequent awarding of contracts, grants, loans and special deals.

Let me give an example. The industry minister recently announced a $60 million handout to two private companies in Ottawa headed by an Ottawa billionaire. He should be embarrassed to even ask for the $60 million. A billionaire asked the government over there, the Minister of Industry, to give him $60 million. He is Terence Matthews, an identified Liberal donor. He donated $25,000 recently to the Deputy Prime Minister's leadership campaign.

The minister has claimed that the $60 million awarded to the two companies of Terence Matthews is not a gift, that he expects every nickel to be repaid. How many times have we heard that. Unfortunately, the Technology Partnership Canada program, under which the $60 million was awarded, has a less than satisfactory history of success. It has handed out close to $2 billion but has only been repaid $35 million.

It is hard for the average Canadian taxpayer to imagine how the government could have the gall to give $60 million to a billionaire to fund something that he should have funded himself.

As if the handout was not bad enough just in itself, in return for the generosity, the minister and Technology Partnership Canada have agreed to accept share warrants for a pre-determined number of shares in Mr. Matthew's companies. Now we are in the share market business with taxpayer money. The problem is those shares do not trade on any stock exchange because they are shares in private companies. Their value will be decided at some point in the future by financial institutions and the government. It is unbelievable that we give $60 million to a billionaire, then we take shares and we do not even know what they are worth. It is an absolutely incredible thing.

I figure that if and when Mr. Matthews takes his companies public, which he might do, either we will make some money on these shares or we will lose our shirt. Either way, we really have no business being in this part of the business.

Are you indicating my time is running out or to keep focused, Mr. Speaker?

[Ted White, Canadian Alliance, North Vancouver, BC]

I hear the parliamentary secretary interrupting again and crying out and asking how many bottles of champagne there are at Stornoway. Obviously I do not have an intimate knowledge of the wine cellar at Stornoway, but I would expect the Leader of Her Majesty's Official Opposition, just as I would expect the Prime Minister, to have an appropriate amount of appropriate liquors, wines and foods for the times when he entertains heads of state and important people from around the country.

The leader of my party has an important job to do as Leader of the Official Opposition and it is entirely appropriate that he have the correct tools to do his job. Part of that toolbox involves the wine cellar at Stornoway for the sorts of events that he might hold. He has to interact with the movers and shakers of the business community of the country, with international heads of state and with important people who are interested in the political process and who may want to make representations to him about the way the government is handling the portfolio.

Frankly, if the minister over there or in fact any of the members on that side think they can rattle me by throwing these things at me, they are completely wrong because I feel perfectly comfortable with the positions we take on bills.

I want to get back to fundraising. Raising money eyeball to eyeball from individuals is the way the Canadian Alliance has always done it. We have been very comfortable with that and we would have been happy to continue to work under those rules. Even the 25% average that we have collected from corporations over the past five years, most of it was from small corporations giving $1,000 or less, which is the amount allowed in the bill anyway. When we look at those small contributions, the $1,000 to $1,100 amounts, they are often from mom and pop-type businesses that give a corporate cheque because their accountant only decides at the end of the year whether the money will go under their individual incomes or under corporate spending.

That was one reason that our party supported the $1,000 figure for corporate donations, even though, on principle, we were not opposed to the idea of no political donations. We felt it facilitated individual donations to have that small limit there. I am not sure if it will necessarily stand up to a charter challenge but, nevertheless, the concept is not particularly offensive to us.

As I mentioned, the Canadian Alliance has always raised its money directly from its supporters. When I joined the Reform Party back in 1987 it was very small party and it did not have the benefit of tax deduction status. We had to start from nothing with nothing and within 10 years we became the official opposition in the Government of Canada. That was a big achievement because a party needs a lot of passion from supporters behind it to raise the money to achieve that.

I am actually very disappointed in the bill that the government did not accept some of the recommendations that I made to make it easier for small parties to get started. One of those recommendations was the 50 candidate rule.

The government has consistently tried to prevent parties from having registered status, tax receipt status, by requiring them to run 50 candidates in ridings in a general election. The fact is that when the Reform Party first started we could not do that. This is unfair. It penalizes small parties. The fact is that a party needs 12 members for recognition as a party in this place,

During the hearings on Bill C-2, which was the overhaul of the elections act in 1999 and 2000, the committee, on which I was a member, had representations from most of the small parties operating in this country, the Green Party, the Communist Party, a whole list of them, and I had discussions with them.

There actually was a court case in Ontario that ruled that a party was actually two persons and that running two candidates was sufficient. Even the small parties agreed that was going to the other extreme from the 50 candidates.

Our committee reached an agreement that it should be 12 candidates. I went to the minister with that and said that in order to avoid any more tax challenges, which have already cost taxpayers tens of millions of dollars fighting a ridiculous fight, why do we not make it 12 candidates. I told the minister that all the small parties had agreed to that number, that we could be put it into Bill C-2 and the issue would be finished. There would be no more court cases. The minister was absolutely bullheaded and would not do it. This fight has continued on and will go all the way to the Supreme Court and cost us an absolute fortune.

Bill C-24 gave us the opportunity to revisit the issue. I tried in vain to get the minister to go back to this and change it to 12 members but he would not do it. I cannot help but feel that he has not properly assessed the risk here and that he just does not care about taxpayer money. He seems oblivious to the fact that he is wasting millions of dollars fighting these battles which he cannot win.

One of the other battles in which he is currently involved and one which he cannot win is the one having to do with third party advertising. This is the right, in a free and democratic country, for third parties, that is people outside the political process, to bring up issues and spend money on supporting candidates or issues during election campaigns completely outside the electoral process.

The government has fought that for at least 15 years. First it was the Tory Party and now it is the Liberals. This has been ongoing. The minister has spent tens of millions of dollars fighting against this third party advertising which the courts keep striking down. His argument is that because of a ruling in Quebec, which had to do with the Quebec referendum and that there should be spending limits on the yes and no side in a referendum and no third party interference, that this is justification for applying the same rules to an election.

The fact is that is faulty logic. A referendum has a yes and a no question on the ballot. A person either votes yes or no. There is no other issue.

If a person gives some money to a yes side and some money to a no side to fight the battle leading up to voting day, I think most people, and perhaps all people, would agree it is entirely fair to then exclude third parties from that. Then it becomes unfair. If we want a fair fight, then we allow the yes side and the no side to fight fairly with limitations.

When this is applied to an election, an unlimited number of issues will come to the fore during an election. Political parties will not bring up the things they do not want to talk about. Therefore, it is only fair that third parties be allowed to intervene and spend some money on themselves.

Before I go on, Mr. Speaker, might I ask for unanimous consent of the House to split my time with the member for Surrey Central. If there is unanimous consent for that, I will split my time; otherwise I will not.

[Ted White, Canadian Alliance, North Vancouver, BC]

The parliamentary secretary yells out the Fraser Institute, but the Fraser Institute solicits for donations quite extensively for the work that it does, so I am not sure we can compare it directly with academics.

In any case, the academics who came before us claimed to know what was good for taxpayers and supported the idea that political parties should be funded by taxpayers, but I am not sure these academics really know what is good for the average taxpayer because they do not actually pay taxes.

I know many of them would take offence to that by brandishing their paycheques and saying “Look, there are deductions there, I do pay taxes”. However the fact is that professors, publicly paid workers, people like myself, members of Parliament in this place, do not pay taxes because the money we receive in our paycheques comes out of this big pot of taxpayer money. We take some money out and we put some money right back in. That is not paying taxes.

The people who pay taxes are the private sector workers, the people who create the wealth in this country, and it is the deductions from their paycheques, it is the corporate taxes from the private sector that goes into the big pot from which we take our salaries. Those are the ones who are paying taxes.

When these academics come along and say that they pay taxes and they think it is a good idea that taxpayer money should be used to fund political parties, I think they have a conflict of interest.

In fact, I have always thought it would be a good idea if public sector workers did not pay any taxes at all and were only paid the net amount of their paycheques. Therefore professors, members of Parliament and public sector workers would only get the pay that comes in their net paycheque. They would pay no taxes and they would not have to file tax returns.

We can only think how much money the government would save every year if none of the public servants had to file tax returns because we were not playing this silly game of pretending that they pay taxes when they do not.

I do not think the government's side has consulted with real taxpayers, the people who create the wealth in this country, who actually will be paying the cost of Bill C-24.

If the government would have given us this summer to go back to our ridings and talk to the people in our ridings about the cost of this bill, I think there would have been a huge public uprising against it, and by the time we returned here in September the Prime Minister would not have been able to get his pet project through this place because there would have been too much public reaction.

On Tuesday, as I mentioned, less than three hours after we had begun this debate, the government House leader was up on his feet moving an end to the debate.

The fact is that Bill C-24 was the brainchild of the Prime Minister. It was clearly for him the most important piece of legislation on the agenda. That is incredible because we have issues like SARS, mad cow disease, youth crime, the definition of marriage and enormous budgetary overruns with the gun registry, into which we keep finding new amounts of money disappearing but for which the government failed to tell us. We also have the issues of corruption and bribery charges at Citizenship and Immigration, the need to establish a national sex offender registry, which has been dragging on for years and years, and an urgently needed revision of the Indian Act.

All of those things were taken off the table so the Prime Minister's bill, forcing taxpayers to pay for the day to day operations of the political parties, could be rammed through the House.

The bill will soon be in the other place. However, once it receives royal assent, the voters of Canada will have been placed in the position of having to pay to vote in a federal election. This will not be handing over cash to the poll clerk at the polling station. They will not have to pony up with their credit cards or open their wallets and bring out a toonie. It will not be by direct payment at the polling station but it will be via a raid on the public treasury by the government subsequent to election day.

For each and every vote cast, $1.75 will be taken from taxpayers to be shared among the major political parties based upon their percentage of the vote.

What that means, if we use the year 2000 election figures, is that the Liberal Party will receive more than $9.5 million from taxpayers starting in the year 2004 when this bill comes into force.

[Ted White, Canadian Alliance, North Vancouver, BC]

Mr. Speaker, I would like thank the parliamentary secretary for his acknowledgement of my help during some of the drafting of the bill. I would not want that to be interpreted as support for the bill because, in fact, we do not support the bill.

It is a shame that we are not on questions and comments. I would have liked to ask the parliamentary secretary, when he mentioned the important work that parties do between elections that needs to be funded, what exactly is this important work that his Liberal Party does between elections that warrants the transfer of $9.5 million a year to his party's structure, not to the parliamentary wing but just to the administrative arm of his party?

I would have wanted to ask him that question because frankly I would have difficulty identifying anything that the Liberal Party administrative wing does for anybody in Canada between elections. Frankly, it is going to use the $9.5 million simply to run its offices and keep people on the payroll who are not actually contributing much to the running of the country at all.

I am not sure that this public funding can be justified on the basis of the important work. That is very self serving and it is certainly a judgment of the party itself. I would suspect that if we went out onto the street outside of this place and ask Canadians if they could identify some of the important work that parties do for them between elections, I bet they would not be able to identify a single thing. We may think it is very important, but I am not sure that the average taxpayer would think so.

If I had been able to ask him questions, I would have asked, what is the unholy rush to push this bill through the House? We barely had this bill back in the House from committee for less than three hours of debate and the government House leader was standing in his place moving time allocation on this bill and closing down the debate. What could possibly be the emergency that would require the closing down of debate in less than three hours? That averages out at less than half a minute of speaking time for every member of this place. Is that reasonable, Mr. Speaker? I think not and I can see you are almost nodding your head, so you probably do agree with me. It is unreasonable to be moving time allocation on a bill with less than three hours of debate in this place.

The fact is the bill would not be in force until January 1, 2004. There is a lot of time for further consultation and I will talk about the quality of the consultation of the government side a little later in my speech. There is plenty of time for consultation over the summer break while we are back in our ridings. We can talk with average Canadians instead of academics and interested parties or special interests. We could speak with our own constituents over the summer and we could come back here in September with the true message for the government. That is when we should be continuing the debate and passage of this bill. It should not be rammed through as it will be tonight. We are adding barely two hours this afternoon. Frankly, it is a disgrace, Mr. Speaker, and I am sure you feel as embarrassed about it as I do.

I am surprised that almost all of the members on the government side appear to feel no guilt whatsoever for the fact that they are making a blatant grab of taxpayers' money from the treasury to transfer it to the coffers of political parties. I cannot believe for a moment that average taxpayers would think that was a good thing to do. They would be shocked. I suspect many Canadians do not even realize what is happening with this bill. They are being asked to pay to vote because when they go to the polling station and cast that ballot, it is as if the poll clerk was asking them to open their wallet, slap down the credit card so that they could put $1.75 on that credit card. That is the effect this bill would have. It would make voters pay for the transfer of money to political parties.

I suppose that taxpayers could protest this bill by not turning out to the polls because if no one turned out none of the political parties would get any money. In actual fact, this bill could have the opposite effect to the one that the government claims. It claims that it would reduce taxpayer or voter cynicism and encourage more people into the political process, and get them involved in the voting process. There is a potential for taxpayers to perhaps give us the Pierre Trudeau salute and not turn out at the polls. Thus they can deprive us of that $1.75 that is going to be transferred.

If there was another question I could have asked the parliamentary secretary when he was up, it would have been about the nomination contestant rules. He mentioned the reporting requirements that would be required now for nomination races. The fact is they are very complicated. It would often require an auditor or a special agent. Records must be kept of all the types of donations, by category and class of donor. Reports must be filed with the Chief Electoral Officer. A special bank account must be opened to administer the files, records must be kept, and bank statements sent to the Chief Electoral Officer. This is an extremely complicated process. In fact, even for those of us who are used to working within a bureaucratic environment, it is quite a daunting piece of legislation when we look at what we would have to go through for our nomination meetings next time around.

When the parliamentary secretary claims that it would make it easier for women or any traditionally disadvantaged people to get involved in the race because they have restricted the amount of money people can spend, he completely fails to mention that the increased bureaucracy would turn off a lot of people. It would actually discourage them. In fact, I took a section of this bill home with me last weekend to north Vancouver and I showed a few lay people that section of the bill. I asked them if they would be interested in running for office if they had to do this. Every single one of the people said that it would be a discouragement to run for office because of the amount of paperwork that would be required.

Certainly those who do not have a business background would be further discouraged. Someone who is used to working as a receptionist and might like to run for office or give it a try would take a look at this and say that what is being proposed in Bill C-24 is an administrative jungle. It may be too complicated for people to bother. We may be eliminating a number of people from the possibility of running for office who have the sorts of skills that would be useful here, but will not run because they do not have the skills that would enable them to run these complicated bureaucratic reporting rules.

I would like to talk about the consultation process because the parliamentary secretary mentioned that the key elements of this bill are a result of a great deal of consultation. The fact is there was virtually no consultation with taxpayers. I sat on the committee. In fact, I have been the Canadian Alliance critic for this bill ever since it was at second reading in this place. I sat on the committee with the other members, so I saw all of the witnesses who came forward. I even put forward a list of people to invite. The fact is the academics and special interest groups who came before the committee were not necessarily representative of average Canadians.

Last weekend while I was back in my riding I asked a few average taxpayers, friends, and relatives how much they knew about Bill C-24 and whether or not they felt comfortable with the notion of taxpayers' money being transferred to political party coffers. Again, people rejected this notion that it was a good idea to take taxpayers' money and transfer it to political parties.

When the government side says there has been consultation, it was very selective in who it consulted. It brought in a bunch of academics. With all due respect to academics, the fact is academics rely on taxpayers for their salaries and many of them have spent their entire lives being paid by the public purse.

[Geoff Regan, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I am very pleased to have this opportunity to participate in the debate at third reading on Bill C-24, an act to amend the Canada Elections Act and the Income Tax Act (political financing).

The key elements of this bill are the result of a tremendous amount of consultation. An important part of the consultation process occurred during the hearings of the Standing Committee on Procedure and House Affairs. The committee heard from some forty witnesses representing a wide spectrum of political parties, interest groups and individuals.

In my remarks today, I would like to focus on the key changes that have been made to the bill, all of which I believe have improved the legislation, while at the same time respecting the fundamental principles of this important initiative.

As I move forward to examine some of these changes, I think that it will become clear that not only have those principles been respected, but that the government has also been very sensitive to the concerns of political parties and individual members.

In the area of disclosure, I believe the discussion to date has clearly shown that there is a great deal of support for the extension of disclosure requirements to electoral district associations, leadership contestants and nomination contestants.

Interestingly, apart from the supporting commentary, the comments on the disclosure provisions have come from two different directions. Some have argued that the provisions do not go far enough, while others feel the provisions place too much burden on political participants

I believe that, with the amendments, we have been able to address both of these concerns to a certain extent, while at the same time maintaining what are very reasonable requirements.

On the one hand, the bill now requires that political parties who receive the quarterly allowance would have to submit a quarterly report on the contributions they receive. This obligation would not come into force until January 1, 2005, to allow parties some time to gear up to this further requirement.

On the other hand, there have been a series of significant changes, which I believe will go a long way to appeasing concerns about the increased burden.

First, for very small donations, parties would not be obligated to provide receipts. Initially, the bill had proposed that all contributions of $10 or more would have to be receipted. Now, when parties have fundraisers where they pass the hat, no receipt would be needed for donations up to $25. I would like to thank the member for North Vancouver for his work in the drafting of this motion.

Secondly, the threshold beyond which nomination contestants would have to file a report on contributions received or expenses incurred has been increased from $500 to $1,000. This change reduces the administrative burden imposed on nomination contestants.

The bill has also been amended to simplify the registration rules for electoral district associations following a redistribution process. Existing registered electoral district associations would be able to continue their existence in a new district upon the dissolution of their old districts by application of the Electoral Boundaries Readjustment Act.

A pre-registration process would allow other associations to pre-register so that they can come into existence immediately when the representation order becomes effective.

Finally, electoral district associations would be relieved from the obligation to report contributions received since the 2000 election, when they register.

Limits on contributions from individuals and the prohibition on corporate and union donations form the backbone of the bill's measures, aimed at limiting the perception of undue influence from the wealthy, from corporations and from unions.

During the hearings, most witnesses made it clear that they felt the $10,000 limit for individuals was too high. The committee ultimately accepted an amendment that would reduce the limit to $5,000. I am confident that in the end the $5,000 limit will provide an appropriate balance between achieving our objective of removing the perception of influence while at the same time recognizing the importance of financial contributions for a healthy electoral system.

I would like to add that another important amendment has been made to allow candidates to contribute an additional $5,000 to their own campaigns, the idea being therefore concern about people influencing government or candidates and so forth, and we do not see the need to be concerned about candidates influencing themselves.

Another amendment accepted by the committee provides that leave with pay given to an employee who is running as a candidate would not be counted as a contribution by the employer during the election period. I want to emphasize that it is only during the election period and not before the election period. Furthermore, party membership fees of up to $25 annually would not be considered to be a contribution.

With regard to the prohibition on corporate and union donations and the $1,000 exception, we have seen a range of views expressed in the past few months. Some have argued that there should be no limits or higher limits, while others have argued that corporations and unions should be banned outright from contributing.

As the minister and I have made clear all along, moving the prohibition or increasing the limit would in my view go against a fundamental principle of the bill. At the same time I recognize, as the government does, that the $1,000 exception is important to political participants at the local level.

Taking everything into consideration, it is clear that we must take the strongest possible measures to ensure that the perception of influence is removed from the system. That can only be achieved through the prohibition.

That being said, there have been some significant amendments made to this section of the bill. Corporations, unions and associations would be allowed to make a second contribution up to $1,000 when a second election was held in the same riding in the same year. Furthermore, corporations, unions and associations would be allowed to make a further $1,000 contribution to a winning nomination contestant when a first contribution was made during that year to a nomination contestant who did not win the nomination contest in that riding.

In other words, if one person runs for the nomination and loses and a company gives a contribution to that first person and the person loses, there should not be a concern about that first contribution influencing the person who won. Therefore the ability is there to give a donation also to the winning candidate.

With regard to spending limits for nomination contestants, some members indicated the limit of 50% would still be too high to ensure that nomination contests were open and fair to all potential candidates. As a result, the committee accepted an amendment that would see the spending limit reduced to 20% of that limit allowed for candidates in the last election. This should result in a much more level playing field for nomination contest.

We heard a great deal of concern about this issue from witnesses, especially from some of our colleagues in the House, particular those who are women. They felt that allowing large amounts of money to be spent on nomination races too often gave an advantage to male candidates and disadvantaged women candidates. By limiting the spending on nomination candidacies or nomination campaigns to 20% of the limit in the last election should be quite a reasonable limit and should stop that problem in the future, and provide a much more level playing field.

Finally, I would like to turn to the issue of public funding which has received the most attention out of all the measures contained in the bill. During the committee hearings, public funding was clearly the key issue for many witnesses, and in particular, the public allowance. Many witnesses pointed out the important role of public funding and, in particular, the need for ongoing public funding for parties so they could undertake the important work they needed to accomplish in between elections.

With regard to the public allowance specifically, the discussion was not centred on getting rid of it but rather on different types of formulas that could be used. The end result of this discussion did not really produce a unanimous opinion on the best formula or on the right level for that allowance.

But as I have maintained throughout the process, and as the minister has maintained, while one of our key objectives is to eliminate the perception of influence through contribution limits, and the prohibition on corporate and union donations, we must accomplish this in a way that ensures that parties and candidates do not end up losing.

We need to ensure that political participants have the funds they need to be compensated for the loss in union and corporate contributions. Again, we have listened to their concerns and there have been a number of important amendments. The quarterly public allowance has been increased from $1.50 to $1.75 per year per vote received in the previous general election. Early in the process members expressed their concern that the allowance was not indexed. Some were concerned about the level of it and whether it was sufficient. We listened to those concerns and that resulted in the change in the level. But also there was a concern about the fact that it was not indexed. The minister has responded to these concerns and now the allowance would be indexed under the bill.

The Receiver General would be entitled to pay part of the public allowance to a party's provincial or territorial association if so authorized by the party leader. As a transitional measure to assist parties, the 2004 allowance would be paid in a lump sum as soon as possible after the act comes into force. Parties would be provided with a reimbursement of election expenses at a rate of 60% for the next election only, as a transitional measure. Thereafter the rate of reimbursement would be at 50% as originally proposed in the bill.

We know that this will be a substantial change in the way things happen. Usually, during an election campaign, parties are able to raise a considerable amount of money with fundraising efforts. In the past, money came from corporations, unions and so forth. That will not be possible any more so instead we have this process where at the beginning of next year the amount for next year will be given out at the beginning rather than on a quarterly basis which should assist parties with the transition. As well, we have the 60% rebate for the next election which should help with that transition process.

The rate of reimbursement of a candidate's election expenses has been raised from 50% to 60% across in all ridings. We can all agree that these are significant amendments which recognize the important role played by parties and candidates in our political system.

With the important amendments that have been made, I believe we have been sensitive to the concerns that have come forward, and we have acted on them.

As a result, we have improved the legislation, while at the same time respecting the principles of the bill and achieving our important objectives.

In the end, we have a bill that builds on our political traditions, and that would go a long way to helping us achieve our objective of having an electoral system that all Canadians can believe in.

I call on all members to support this important legislation.

[Anne McLellan, Liberal, for the Minister of State and Leader of the Government in the House of Commons]

moved that Bill C-24, an act to amend the Canada Elections Act and the Income Tax Act (political financing), be read the third time and passed.

Political Party Financing

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, the hon. member across is pretending today that he is in favour of Bill C-24 and to have the rules in place now regarding everything that is in the bill including transparency. He and his party have systematically blocked this bill at every occasion, but today the bill will pass and it will be the law of the land.

[Gerry Byrne, Liberal, Minister of State (Atlantic Canada Opportunities Agency)]

Mr. Speaker, there is always a time and place for supporting community events, especially when they are very important to the constituents.

I say to hon. members opposite that maybe this is a good example of how they will be supporting Bill C-24, the political financing act, because they agree with transparency.

Citizenship Act

[Geoff Regan, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, I am pleased to have the opportunity to clarify for the opposition the important role that public funding plays in our political system. Of course, it already plays an important role in our system.

In 1974 Parliament laid the foundation for election financing in Canada by enacting the Election Expenses Act which introduced spending limits for registered political parties and candidates; reporting of party and candidate spending and revenues, and public funding through income tax credits for political contributions; and partial reimbursement of election expenses for parties and candidates. Even back in 1974 we started to introduce public funding for the political process. In fact, as things stand now, even without Bill C-24 approximately 60% of political funding in this country comes from the public purse. It is not a new element in Canadian politics.

All the parties in the House have benefited from these provisions, including the Canadian Alliance. After the 2000 election and in previous elections when there were Reform Party candidates or Canadian Alliance candidates or CRA, it is clear that they received rebates, particularly those candidates who had more than 15% of the vote.

I am looking forward to hearing from the hon. member when he speaks again in a moment because I am interested to know how many of the members of Parliament on his side returned the reimbursement they received if they are so strongly against public funding of the political process. I think we will find that the answer is none, but I will leave it to him to answer the question. Perhaps he can fill us in and enlighten the House on how many members on his side actually returned those rebates.

Canadians have long accepted the importance of providing financial support to political participants. Indeed, this fact was made repeatedly during the discussion on Bill C-24 in the Standing Committee on Procedure and House Affairs on which I sit. I heard it many times from many of the witnesses we heard from during the meetings we had on this topic.

Canadians recognize the important role played by parties in our system in developing policy and representing the views of Canadians on an ongoing basis. They recognize that parties justifiably require some public resources to carry out those functions. They know that the policy development process is an important one for all of us. They know it is important to have the outreach that parties engage in and that it costs money, but it is important to support that process.

Canadians also know that parties have varying abilities to raise money and to finance themselves. It may not always reflect the number of people in the country who support them, but this process will allow that to happen so that it will reflect the support they receive in an election.

Is there some other ideal way that might be better than this? Maybe someone can come up with one, but of all the various ways that have been examined that might fund political parties and fund the process, this is the best of those that are available.

That is why it is being used now in Quebec, New Brunswick and Prince Edward Island. That is why it is the system that we have adopted. It is the best we have seen. There are others, but I think they have many flaws in them. This system may not be perfect, but it is the best available. I think it is a good system.

[Scott Reid, Canadian Alliance, Lanark—Carleton, ON]

Madam Speaker, my question this evening is on the subject of Bill C-24, the political financing act. Last week I rose in the House to question the government about the proposed amendments to the bill. Now that the amendments have been officially tabled and voted on, this may be somewhat academic, but I want to ask some further questions about these amendments.

First let me outline some of the amendments that were tabled yesterday and have just been voted through. The direct statutory annual allowance paid to parties will go from $1.50 per vote that the party obtained in the last election to $1.75 per vote. Incidentally, this is going to guarantee the Liberals an annual subsidy of over $9 million, year in, year out.

The reimbursement of election expenses to individual candidates who win more than 15% of the vote will be raised from 50% to 60% of their election expenses. Similarly, the reimbursement for election expenses to national parties is being raised from 50% to 60%. This represents a massive grab of taxpayers' money for political parties, particularly of course for the Liberal Party of Canada, which is hoping to lock in its political success from the past election through a formula which ensures that each party will be paid according to the number of votes that it received in the prior election.

Voters often change their minds during a government's mandate. With this new system, a party's chances at the next election are tied to its performance in the previous one, and this is a problem which I can best explain by means of an historical analogy.

In the 1988 election, Brian Mulroney and the Progressive Conservatives won a strong mandate and more votes than the other parties. In the 1993 election, the Conservative vote collapsed. The Liberal vote soared, as did the vote of my party, the Reform Party at the time, and the current Prime Minister came to power. Clearly voters had changed their minds during that mandate. However, had the proposed new funding rules been in place during that period, the Progressive Conservatives would have continued to receive $1.75 each year for every single ballot they had received in the 1988 election, even as their popularity plummeted and the popularity of the parties that opposed them rose. Those other parties would have been denied a level of financing that would have been commensurate with the level of support they were receiving from the public, given the fact that many of the voters who had formerly supported the Conservatives had since decided that some other party now best represented their point of view and deserved their support.

It goes without saying that the same situation would occur today if the Liberals were to find their support level declining from the levels they enjoyed in the election of November 27, 2000. The same thing would be true if my party, the Canadian Alliance, or any other party were to see its level of support go up or down. Like flies caught in amber, their annual subsidies would go on reflecting the electoral results of a prior election without any reflection of how voters are thinking.

To avoid this kind of confusion, I strongly recommend to the House the amendment suggested by former NDP leader Ed Broadbent. In a presentation to the House of Commons committee considering this bill, Mr. Broadbent suggested that instead of basing the annual payment to parties on the results of the prior election, citizens should be permitted to direct their proportionate share of the subsidy to the party of their choice each year by means of a question that would be included on their income tax return form. Already it is possible to register for the voters list by doing this.

This solution would be fair. It would be democratic. It would allow people to give money to the party they actually support should they find their support changing, or even to a minor party which has no representation in the House of Commons. This was not considered in any serious way during the debate over the amendments to this bill. My question to the Parliamentary Secretary to the Leader of the Government in the House of Commons is simply this: Why was it not considered?

Canada Elections Act

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

Madam Speaker, it gives me pleasure to speak on the third group of amendments. I want to start by commenting on the last suggestions made by the hon. member who just spoke. He referred to Bill C-2, which I also sponsored. His colleague from North Vancouver sat on the committee when we dealt with this bill.

According to him or whoever wrote his speech, the bill tightens the elections rules in a way that is too tight. In other words, it does not give opportunities to smaller political parties. This is revisionist history at its best, because of course everyone who was around here after the 1993 election remembers that the first set of amendments we made to the Elections Act, after our government came to power, was a bill sponsored by a then Reform MP to tighten up because marginal political parties were getting a subsidy. The bill was under the name of Ray Speaker, I believe, and it had to do with eliminating the subsidy to a group that called itself the Natural Law Party, because it was a fringe group and not a political party in the traditional sense of the definition. It served to do just that.

Whoever wrote his speech failed to take that into account. The hon. member should go back to him or her and ask the writer to read Hansard . Hansard is good stuff. It tells us all kinds of useful information, particularly about what we did ourselves. That is always useful.

He may also want to take the transcript of the Standing Committee on Procedure and House Affairs. The then chairman of the committee, the hon. member for Kingston and the Islands, was just excellent at chairing that committee. So excellent were his skills that he is now the Speaker of the House of Commons. It was at this committee that we did the work at the initiation of a Reform, now Alliance, MP. So much for that.

I would now like to speak to Motion No. 12. I agree with the member who just spoke. The amendment proposed by the New Democrats simply does not work. Incidentally, I proposed this amendment following a speech by a colleague of the hon. member opposite, the member for North Vancouver, who indicated that there was a flaw.

He was right. This flaw did exist. If there were no receipts for funds collected by riding associations since 2000, we would not know what to do. Before 2000, fine, there is a type of grandfather clause. However, for money collected since 2000, we have to know where it came from, but there was no rule saying that we had to know where it came from, so we did not know.

Which is why he was right to raise this point. The member for Edmonton—Strathcona is quite right when he says that this motion moved by our colleague from the New Democratic Party does not work.

If this motion were to be carried, there would be thousands of dollars in riding association accounts that would go nowhere; they would be in a sort of limbo, because it would be impossible to track them. For this reason, we cannot agree to the amendment proposed by my colleague.

I thank all members for their contributions to report stage. I ask them all to vote for Bill C-24.

[Rahim Jaffer, Canadian Alliance, Edmonton Strathcona, AB]

Madam Speaker, it is a pleasure to speak to the Group No. 3 amendment to Bill C-24. This is the first opportunity I have had to address this bill. There has been a lot of excitement on both sides of the House pertaining to this legislation. I wish it were more favourable. I wish the government had put more teeth into the legislation and had actually carried through with some of the things that unfortunately are missing from the bill. Within my discourse I will try to address some of the bill's failures.

One thing that is astounding in discussing this bill is the timing of the bill being in the House and the priorities of the government. The government is trying to rush through legislation which, in its opinion, is very important especially at a time when there are crises going on across the country. As members know, SARS is causing problems for many people around the Toronto area and there is the problem of mad cow disease out west and its effect on the livelihoods of cattle producers in that part of the country. We have faced other problems and challenges across the country over the last number of months, and on the eve of the last week of Parliament we are discussing a bill that is strictly in the interests of this particular government.

Bill C-24 has been brought forward because the government wants to address, possibly even corruption, in political financing. It is the same government that has been in power for the last 10 years. There is some sort of ironic logic that comes with this bill if the government is trying to address issues of influence peddling or corruption or whatever it might be or even if it is trying to mask these issues because the government will in fact benefit from the changes in this legislation by receiving more public money in the case of subsidization.

The reason we have this legislation is that the government has been incompetent in dealing with many issues pertaining to transparency and accountability. The government has been incompetent in dealing with all the things that Canadians want to see from their government. The Liberal government has been lacking on those issues and it has to bring in legislation to mask the problem. It is trying to deal with the fact that it has managed things so poorly over the last number of years it has been in power and now we are debating this legislation at this period in time. Bill C-24 contains only half measures when it comes to what Canadians would like to see with regard to having financing legislation in place that would in fact bring in the things the government talks about.

I would like to address for a moment Motion No. 12 which is an NDP motion. We feel there is a lot missing in Bill C-24. We in the Alliance will oppose this motion. We feel the motion would actually work against riding associations across the country. The motion put forward by our colleague from Winnipeg Centre requires a registered association of a political party to provide all information with regard to contributions. Where it becomes problematic is if an association misses its reporting deadline, it could be convicted of a criminal offence and could face up to $5,000 worth of fines.

It seems that this sort of amendment is unnecessary. The bill already contains provisions for associations to do this. I am curious as to why the NDP feels that we need to punish some of the riding associations. If they made an honest mistake, why would we want to punish them in this way?

I do not think we necessarily need this amendment. However our colleagues from the NDP feel it is something that needs to be dealt with. I think it is a short-sighted amendment and one which may not necessarily work in the interests of riding associations. If anything, I think it would work against them. The Canadian Alliance will be voting against Motion No. 12.

I would like to address some of the failures in Bill C-24, and there is no shortage of failures unfortunately. An hon. member across the way is encouraging me to carry on with my discourse. I know he wants to learn about these failures and maybe he will try to amend the legislation.

What does Bill C-24 fail to do? It fails to fix the underlying problem of awarding government grants, contracts and loans to supporters of the party in power. If anything, Bill C-24 would make it more difficult to detect and expose such behaviour.

What is interesting, and this is what I was talking about earlier as I opened my discourse, is the fact that we have this legislation being brought forward by a government that obviously has had one problem after the other when it comes to issues of contracts, scandals, loans, all these particular things that may in fact control the influence of these contracts, how money is spent and how it is awarded. This government has been in power for the last 10 years and now puts forward legislation to deal with these problems that have unfortunately only become worse under this government, yet it fails to address all the particular problems for which it has actually been accused of abuse.

Bill C-24 fails to correct the 50 candidate rule, which was struck down by the courts. I will just address this issue very quickly. In 1999, an Ontario court struck down the sections of the elections act which required a party to run 50 candidates in an election to remain on the register and to have its candidates listed with party affiliation on the ballot. The court indicated that two candidates should be sufficient to be recognized as a party.

During the revision of the elections act in 2000, the Liberals reinstated the 50 candidate rule even though the case is still under appeal to the Supreme Court of Canada. The government says it is protecting voters from frivolous parties, but it is actually trying to limit competition on the ballot. Voters in countries that have other types of proportional representation systems often make their selections from up to 35 parties on the ballot. They have shown that they are capable of distinguishing between frivolous and serious candidates.

Are the Liberals trying to tell us that Canadian voters are not capable of making the same type of distinctions? I would only expect it from this government. It does not seem to want to allow Canadians to at least make decisions about who they want to represent them. Instead, it is trying to restrict more involvement from other political parties.

I would like to focus specifically on where Bill C-24 fails to end the patronage appointments to positions in Elections Canada. That is something I touched on briefly, but let us just follow up on this problem, where this legislation could have made such a huge impact on changing the way that patronage currently takes place.

Bill C-24 fails to end the practice of the governor in council making patronage appointments to fill returning officer positions at Elections Canada. Returning officers are presently political appointees of the Prime Minister. This is outrageous, considering that Elections Canada is supposed to a non-partisan electoral organization. The voters of Canada should not have to put up with the Prime Minister appointing Liberal Party hacks to prime positions as returning officers within Elections Canada. That works against an open and democratic system. The Chief Electoral Officer has repeatedly stated during committee hearings that it is critical he be given the power to hire returning officers based on merit.

He has also repeatedly stated that ideally he would like to adopt the provisions contained in a private member's bill put forward by one of the Canadian Alliance members, the member for North Vancouver, who also has done an incredible job in researching and working on this bill on behalf of our caucus. I would like to congratulate him for that. He put forward a private member's bill with respect to this. That bill would have eliminated the patronage at all levels of Elections Canada.

During the revisions of the Canada Elections Act a few years ago, the Chief Electoral Officer made it clear that he would not recommend adoption of the Canada Elections Act to a third world country or an emerging democracy. His exact words were:

...obviously when I go out on the international scene I do not recommend that the Canadian system be emulated where it comes to the appointment of returning officers. I clearly indicate, as I do in Canada, that the appointment of returning officers under the present system is an anachronism.

It is archaic. Elections Canada has repeatedly asked the government to release it from the system of patronage and allow it to hire its own staff for elections by advertising and interviewing like any other independent organization.

These are just a couple of the failures of this legislation. I could go on for a while, and I know that the hon. House leader of the government would love me to do so. Unfortunately, in the limited time we have I will have to conclude quite quickly, but hopefully the government will take heed some of the suggestions being made by my colleagues here in the official opposition and improve the legislation in the interest of Canadians, because Canadians deserve it.

[Carole-Marie Allard, Liberal, Parliamentary Secretary to the Minister of Canadian Heritage]

Madam Speaker, this House is witnessing an historic moment. We are going to take a very important step to improve Canadians' faith in our electoral system.

I was elected in November 2000. As a candidate, I had to learn the electoral financing process, personally invest in order to run in the election and ask my party for financial assistance. I won and immediately thereafter I had to start talking financing in my riding.

First, I had to pay back my election debt and the money I borrowed from my party. I must say it was not easy to understand all the rules of the financing system, but I did my share for my party. I wanted my riding association to have access to a fund in order to help my constituents.

I must say that in 20 years of being a journalist, I always believed that the system's transparency was guaranteed by the act of disclosing political contributions. The logic was simple: if a company obtained a government contract, we looked to see if it had contributed to the party and we would go so far as to conclude, of course, that there was a cause and effect relationship.

But after hearing the opposition members drawing this simple conclusion, journalists reported a number of cases and the public also drew its own conclusions. That is why, today, we must tighten the rules and be even more vigilant. This government decided to do this, and we should be proud of it.

I would like to take this opportunity to explain why, in my opinion, the opposition's amendment, Motion No. 12, must be defeated.

The purpose of this bill is to overhaul the rules regarding political financing. There are new rules regarding nomination contests. These contests, their management and financing were not previously regulated by the Canada Elections Act. Similarly, the bill proposes rules for financing contests to select the leaders of registered parties, also not previously regulated.

As the hon. members know, this bill makes significant changes to allowable contributions, as well as to the categories of eligible donors. Finally, the bill provides for a much more complete system in terms of the disclosure and publication of contributions made to nomination or leadership contestants, candidates, riding associations, and political parties and provincial and territorial divisions of registered parties.

These are significant changes. I believe that these changes mark a key moment in the evolution of our electoral democracy. They help to ensure the trust of Canadians in our political system, and this is essential to the future of our parliamentary democracy.

These new rules change the way political parties will be financed in the future. Bill C-24 gives us a glimpse of the future, but it also raises questions. For example, what about contributions made before this bill comes into force.

The opposition is proposing reintroducing a section that was in previous legislation. I believe we must draw the line. Previous contributions should not be affected by the new rules.

In keeping with the bill, when amounts are transferred from trust funds, for example, to the accounts of riding associations before the bill comes into force, they will be recorded as part of the association's overall assets.

In many cases, the origin of these funds cannot be determined because they have accumulated over the years. The information might not be available any longer. So why get ourselves into such an impasse?

I must admit that I have trouble seeing the advantage for Canadians, and for our democratic system, in imposing rules which would result in exclusion of contributions made to a constituency association prior to the effective date of the bill.

On the contrary, I believe we need to turn over a new leaf. It is preferable for all this money to go to the constituency associations before Bill C-24 takes effect, even if this means they will be able to benefit from funds of unknown origin, and share the benefits with the constituents. The future is what is important. For that, we have guarantees. All funding will have to be reported. It will be recorded in the system and the constituency associations will need to be accountable.

Public confidence in the integrity of our electoral system has been seriously undermined in recent years. Transparency and accountability requirements are essential to the integrity of any political system. With this new legislation, Bill C-24, we have some rules to guarantee that transparency.

I therefore feel we have adequate guarantees, which will provide us with the means of achieving this objective of restoring public confidence in our electoral system.