Bill C-50 (Historical)

An Act to amend the Canada Elections Act (political financing)

This enactment amends the Canada Elections Act to
(a) enact an advertising and reporting regime for fundraising events attended by Ministers, party leaders or leadership contestants; and
(b) harmonize the rules applicable to contest expenses of nomination contestants and leadership contestants with the rules applicable to election expenses of candidates.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thank you.

Ms. Shepherd, I have two questions for you.

First off, in all these things, you're trying to find the balance, so you want to try to make sure that what you're coming through with is fair and reasonable and, at the same time, improving the current situation, right? Do you feel that Bill C-50 hits the right balance in terms of opening up events to media and allowing lobbyists to attend by ensuring that their names are recorded? In terms of the requirements, as they apply to lobbyists, do you feel the legislation is fair and has the right balance?

[Ruby Sahota, Liberal, Brampton North, ON]

I'll carry on from what you were speaking about.

You mentioned in your introduction and again just now that your main role is to make sure that everyone is following the Conflict of Interest Act. You were saying that Bill C-50 is a small piece of legislation. There are a whole bunch of different regulations and other things that the minister is hoping to bring forward as well.

How much does this small piece of legislation, which is trying to create a little bit more transparency, actually help you to do your job in the administration of the Conflict of Interest Act?

[Karen Shepherd, Commissioner of Lobbying, Office of the Commissioner of Lobbying]

Good afternoon, Mr. Chair and members of the committee.

I am pleased to be here today to participate in your study of Bill C-50, An Act to amend the Canada Elections Act (political financing).

I am accompanied by Bruce Bergen, senior counsel.

As Commissioner of Lobbying, my role is to administer the Lobbying Act, which makes lobbying activities transparent, and to develop and enforce the Lobbyists' Code of Conduct, which sets out standards of behaviour for lobbyists. Together, the act and the code ensure that Canadians have confidence in the integrity of decisions taken by their government.

Lobbying is a legitimate activity.

Having been involved in the making of public policy for many years, I know that exposure to a range of viewpoints is essential to effective policy-making and better decision-making by governments. However, it is important that when lobbyists communicate with public office holders, they do so transparently and with high ethical standards.

My mandate, as outlined in the act, is threefold: maintain the Registry of Lobbyists, which contains and makes public the information disclosed by lobbyists; develop and implement educational programs to foster public awareness of the requirements of the Lobbying Act and the Lobbyists' Code of Conduct; and ensure compliance with the act and the code.

The Lobbyists' Code of Conduct complements the Lobbying Act in enhancing public confidence in government decision-making.

Following a two-year consultation process, a new Lobbyists' Code of Conduct came into force in December 2015. The new code addresses the issue of conflict of interest in more detail to reflect a 2009 Federal Court of Appeal decision that included the concept of apparent conflicts of interest. These new and simplified rules help lobbyists avoid placing public office holders in a real or apparent conflict of interest, specifically when they share close relationships with public office holders whom they have engaged in political activities, and when it comes to the provision of gifts to public office holders.

Given the committee's current study, I would like to discuss rule 9 of the code that deals with political activities.

Some political activities could create a sense of obligation. While we live in a democratic country where both political activities and lobbying are legitimate, lobbyists must ensure that no real or apparent conflict of interest is created when these two activities intersect.

The code explicitly prohibits lobbyists from lobbying members of Parliament and ministers when they have carried out political activities that could reasonably be seen to create a sense of obligation. These activities include organizing a fundraising campaign or event, writing speeches, preparing candidates for debates, and serving on the executive of an electoral district association. The rule extends to a prohibition on lobbying public office holders who work in a minister's or MP's office. By contrast, political activities such as making contributions under the Canada Elections Act, putting a sign on a lawn, being a member of an electoral district association, or attending fundraising events do not create the sense of obligation that would result in the appearance of a conflict of interest.

When the code was published, I released guidance to help lobbyists understand how I intend to apply the rules relating to conflict of interest. My guidance encourages lobbyists to ask themselves the following question when considering political activities: would a reasonable person look at my political activities and consider that they created a sense of obligation on the part of any individual seeking or holding a public office? If the answer is “yes”', then any related lobbying activities risk creating a conflict of interest for that individual and should not be undertaken.

In summary, while I do not regulate political activities, I believe that legislation such as the Lobbying Act, the Canada Elections Act, the Conflict of Interest Act, and the codes which exist for lobbyists and members of Parliament contribute to the confidence Canadians can have in the integrity of the government's decisions.

Mr. Chair, this concludes my remarks. I am now pleased to answer any questions you or the committee members may have.

[Mary Dawson, Conflict of Interest and Ethics Commissioner, Office of the Conflict of Interest and Ethics Commissioner]

Mr. Chair and committee members, thank you for inviting me to appear before you today as part of the committee's study on Bill C-50, An Act to amend the Canada Elections Act (political financing). With me today is Martine Richard, general counsel.

Bill C-50 amends the Canada Elections Act to create an advertising and reporting regime for political fundraising events attended by ministers, party leaders, or leadership contestants where the cost to participate is more than $200. The aim is to increase transparency about who is attending such events. I support the direction of this proposed legislation. As I've said on previous occasions, transparency is important for any kind of regime that touches on conflict of interest.

Bill C-50 does not amend or directly affect the regimes that I administer: the Conflict of Interest Act and the Conflict of Interest Code for Members of the House of Commons. It does, however, apply to some individuals who are subject to those regimes.

Ministers, including the Prime Minister, are reporting public office holders under the Conflict of Interest Act. Leadership contestants and party leaders who are sitting MPs would also be subject to one or both of these conflict-of-interest regimes. I welcome the move to make all party leaders and leadership contestants—and not just ministers—subject to the new advertising and reporting regime. I note, however, that Bill C-50 does not cover parliamentary secretaries, who are subject to the Conflict of Interest Act, as reporting public office holders. The committee may wish to consider that omission.

It appears that the impetus for Bill C-50 was the high level of media attention and public concern about several so-called cash-for-access or pay-to-play fundraisers that have taken place in the last two years. These are events in which a relatively small number of attendees, in return for the price of admission, gain the opportunity to meet a featured minister or party leader. The fundraisers prompted a great many calls to my office and several requests for investigations. The level of public interest in fundraisers involving federal politicians is particularly high at present; however, concerns about political fundraisers were also raised much earlier during my mandate as commissioner. The issue of political fundraising came up in three of my examination reports under the act: The Raitt Report in May 2010, The Dykstra Report in September 2010, and The Glover Report in November 2014. I also addressed the matter in my submission to the parliamentary committee that conducted the five-year review of the act which concluded in 2014.

The Conflict of Interest Act contains only one provision, section 16, that directly addresses participation in fundraising activities. Section 16 of the act reads: “No public office holder shall personally solicit funds from any person or organization if it would place the public office holder in a conflict of interest.” There's no specific mention of political fundraising in the Conflict of Interest Code for Members of the House of Commons.

This provision does not distinguish between political and charitable fundraising. Two elements must exist to establish a contravention of section 16: first, a public office holder must have personally solicited funds from a person or organization or have asked somebody else to do so; and second, it must be established that the personal solicitation would place the public office holder in a conflict of interest.

I should mention as well that one other paragraph of the act relates to political fundraising, and that's paragraph 11(2)(a), which establishes an exception to the gift rule to allow for gifts that are permitted under the Canada Elections Act. As you will recall, the gift rule prohibits public office holders and their family members from accepting a gift or other advantage that might reasonably to be seen to have been given to influence the public office holders in the exercise of a public power, duty, or function.

Other sections of the act, while not specifically about fundraising, could be triggered, but this could occur only at a later date, when a person who made a donation to attend a fundraiser seeks a particular outcome from a minister or a member of ministerial staff.

This would not arise when the fundraiser takes place or when the stakeholder makes the required donation. For example, section 6 prohibits public office holders from making an official decision or participating in making a decision if they know or should reasonably know that, in doing so, they would be in a conflict of interest.

Under section 7, the issue is not who a public office holder may speak with at a fundraising event, but whether that person is given preferential treatment after the fact. Section 7 is problematic, however, because it's so limited in scope. It does not prohibit all preferential treatment, only preferential treatment based on the identity of the person who makes the intervention. I have always wondered why it couldn't just be preferential treatment.

Sections 8 and 9 prohibit public office holders from using insider information to improperly further or seek to improperly further a donor's private interests, and from seeking to influence a decision in order to do that.

On several occasions I have recommended strengthening the fundraising provision of the act, for example, by putting in place a more stringent rule for ministers and parliamentary secretaries. I even went so far as to say in my 2012-2013 annual report that I could support an absolute prohibition on ministers and parliamentary secretaries attending fundraising events, if the government wanted to go that far.

In The Glover Report, I recommended amending the act to include a contravention for ministers or parliamentary secretaries who knew or should have known that funds were being solicited by their staff in circumstances that would place them in a conflict of interest and who failed to take appropriate action. I've also referred on several occasions to the Prime Minister's accountability document, which has since been updated and renamed Open and Accountable Government. Some of its provisions could be added to the act.

I have suggested as well that the House of Commons consider implementing a separate code of conduct to address the political conduct of members and their staff, including political fundraising.

As amendments to the regimes that I administer are not the issue currently before the committee, I mention these recommendations only as a context and to establish my long-standing general position that fundraising rules should be tightened.

The amendments to the Canada Elections Act proposed by Bill C-50 promote transparency with respect to fundraising activities.

I think it is a positive measure that would benefit our electoral process. It will also help to apply the Conflict of Interest Act more effectively. The easier access to the names and addresses of participants in these fundraising activities could be useful to the office if it has to investigate an allegation that a participant in such an activity obtained an advantage from a minister.

That ends my opening remarks. I will be pleased to answer your questions.

[The Chair, Liberal, Larry Bagnell]

Just before we go to the witnesses, I want to remind the committee members that we have an extra-long meeting today with an extra half-hour for witnesses at one o'clock for the Elections Ontario person. If people could try to get their amendments in by five o'clock today, then they can be distributed to committee members for Thursday's clause-by-clause.

Welcome back to the 73rd meeting of the Standing Committee on Procedure and House Affairs. We are studying Bill C-50, an act to amend the Canada Elections Act (political financing). We are pleased to have with us Mary Dawson, Conflict of Interest and Ethics Commissioner. She is accompanied by Martine Richard, general counsel. We are also joined by Karen Shepherd, the Commissioner of Lobbying. She is accompanied by Bruce Bergen, senior counsel.

As I say to all the witnesses, you are here and prepared for Bill C-50. If someone asks you a question about something else, it's up to you whether you answer. You don't have to answer that.

First of all, we have opening statements.

Ms. Dawson, you have the floor for any opening statement you would like to make.

[John Nater, Conservative, Perth—Wellington, ON]

This is very quickly for either of you.

Mr. Montigny, you mentioned this perhaps leading into a type of lobbyist registry. Do you see as a potential cost or resource challenge for Elections Canada developing an entire apparatus to deal with a registry beyond perhaps what's envisioned in Bill C-50?

[Eric Montigny]

Absolutely.

First, it's a matter of consistency. I see Bill C-50 as a first step. Clearly, people are always asking for more transparency. My concern is that the media or the general public will ask what we have to hide during an election period that we don't hide the rest of the time. People will wonder why there are two systems, one during the election campaign and another the rest of the time. Inevitably, elected officials will be asked why there are two different systems.

Of course, we could say that the pace is more frenetic during an election campaign because more events take place. The reports can be produced later; there are other obligations. Pressure will be strong on elected officials to apply the same provision as outside an election period, for the sake of consistency.

I'm trying to see two steps ahead. To use a very Quebec image, I think that Bill C-50 puts your hand in the wringer. Questions will inevitably be raised about the application of the same principles in an election campaign. We will then move to a registry like a lobbyists registry, the principle of which is to regulate relationships of influence.

I'm talking about activism today and preserving the activism link associated with campaign donations.

Does that answer your question?

[Dr. Leslie Seidle, Research Director, Institute for Research on Public Policy, As an Individual]

Thank you, Mr. Chair, for inviting me to take part in your study of Bill C-50.

My presentation will be in two parts. First, I will make some general observations about the purpose of the bill, intended to situate it in the context of the ongoing development of the regulation of political finance under the Elections Act, and then I will have a few comments about certain provisions of the bill.

Canada's regulatory framework for election and political finance is considered, with justification, to be one of the most progressive in the world. It is based on a number of principles, one of which is transparency. As with other parts of the Canada Elections Act, the means to further that principle have evolved over time. Often this has occurred in response to scandal or to concerns about the potential for financially well-endowed interests to exercise undue influence over the federal, political, and legislative processes. We can think, for example, about the Pacific scandal of 1872 as well as the Rivard affair and related controversies about irregular party funding during the Pearson government in the mid-1960s.

In response to the first, the Pacific scandal, Parliament introduced a requirement in the 1874 Dominion Elections Act that candidates report on their election spending. However, there were no sanctions or an effective enforcement body, and the provision became a dead letter.

In response to the controversies of the 1960s and the pressures on political parties for financing election campaigns, the Pearson government appointed the committee on election expenses in 1964. It's often referred to as the Barbeau committee. Significant parts of that report were enacted in the groundbreaking Election Expenses Act of 1974.

Over time, two developments have occurred to strengthen transparency in federal political finance. First, the reporting requirements have been extended beyond parties and candidates that were covered by this 1974 statute to other entities—constituency associations, leadership contestants, nomination contestants, and third parties. I might add that this extension follows from some of the recommendations of the Royal Commission on Electoral Report and Party Financing. I was the senior research coordinator for that commission, so I am slightly biased. But sometimes it takes quite a while for the work of royal commissions to actually be implemented, and this is an example where the extended reporting that the Lortie Report recommended actually came into place some ten years later.

The second development is that some of the requirements that were instituted in the seventies have become more demanding. For example, since 2004, political parties must report on their contributions at the end of every three-month period rather than annually.

Bill C-50 fits within the pattern of developments I just sketched. First, if passed, it will extend reporting requirements, with some exceptions, to those attending most fundraising events sponsored by parties represented in the House of Commons as well as events sponsored by their leadership and nomination contestants, providing they meet certain criteria.

The bill also responds to concerns about the potential influence of people who attend fundraising events in addition to those who make political contributions. For those who do contribute, the identity is reported under the already existing requirements.

Particular concern has been expressed about the attendance of non-Canadian business leaders at certain fundraisers. I don't need to go into any more detail about that; you're aware of what I'm talking about. In light of the ban on foreign contributions to federal political entities, which I am sure most Canadians support, I share that concern. I share a concern about the attendance of foreign business leaders, and indeed, foreign interests from different sectors that happen to be business leaders who have been mentioned in some of the commentary about fundraising.

I would underline, to sum up, that political finance reporting requirements are intended not only to allow the public, the media, and others to have reasonably timely access to relevant information but also to serve a broader purpose. My colleague has referred to that as well.

The Lortie report included the following observation: “Full disclosure of information on financial contributions and expenditures is an integral component of an electoral system that inspires public confidence.” The Minister of Democratic Institutions also drew this link when she spoke on a second reading last June 8. She stated, “Canadians have a right to know even more than they do now about political fundraising events...so that [they] can continue to have confidence in our democracy.”

I should add that what the bill will intend to do, and what the Canada Elections Act does already, needs to be situated in a broader context. We can't put all the freight on the shoulders of the Canada Elections Act. We have lobbyist registration; we have ethical codes of conduct; and we have officers of Parliament who are charged with implementing the statutes and the regulations under them, and you're hearing from two of them later today, including my former colleague Mary Dawson.

Turning to the provisions of Bill C-50, I have three brief comments. First of all, there have been questions about whether the reporting requirements should also apply to political parties in addition to the party in government. In response I would say that first of all, it's entirely possible that an opposition party becomes a governing party. That's a fundamental part of our system, and it happens all the time. In the meantime, its leaders and MPs participate in the legislative process. It is therefore legitimate to apply similar rules to the fundraising activities of opposition parties. Moreover, the political finance regulatory scheme, as set down in the 1970s and modified since, is not based on a distinction between the governing and other political parties. Rather, it requires political parties, whether they're represented in the House or not, to apply to register providing they meet certain criteria. Once they do so, the same rules, whether they're on reporting, spending, or contributions, apply to all the registered parties. There isn't a distinction between whether you're in government or sitting on the opposition side, or indeed whether you're inside or outside the House, providing you're registered.

Secondly, Bill C-50 provides that a party or other entity must publish information about a fundraiser on its website at least five days before the event takes place. This is too short. Such events are planned weeks, if not months, before they are held, and in my view the five-day period should be lengthened. If the announcement needs to be modified, for example if a minister has been invited to come and he or she cannot come at the last minute, the notice on the website can be modified. Indeed, the bill already specifically covers updates.

Finally, along with Jean-Pierre Kingsley, with whom I worked a little over 10 years ago, I find the sanction of a $1,000 fine for non-compliance too weak. The level of the sanction should send a message that the new requirements must be treated seriously.

The second part of the bill covers leadership and nomination contest expenses. As I understand it, these amendments flow from an interpretation note the Chief Electoral Officer issued in August 2015 and from his report after the election of that year. Beyond saying that it is important to align the text of the Canada Elections Act with Parliament's intent, I don't have any specific comments on that part of the bill.

I will be happy to answer your questions and comments.

[Eric Montigny, Professor, Department of Political Science, Université Laval, As an Individual]

Good morning.

I thank the Committee for inviting me to speak today.

The last time I appeared was during consultations on electoral reform and the voting system. I hope that your work will reach a more satisfactory conclusion this time.

First of all, I would say that making a contribution to a party remains a fundamental democratic exercise, a fundamental democratic right even. In a political system, giving money to a party is as much a type of political expression as it is activism. This is the first thing that we should keep in mind. It is also a way to support a cause, a political stream and, generally speaking, democracy.

Contributing to a political party is also a means for political parties and elected officials to stay in touch with civil society. It is also a way to energize a party’s militant grassroots or to aim to do so.

As such, it is important to think about it and to question amendments to the political financing provisions of the Canada Election Act. I would add that it is critical to examine the oversight role that the State must play when it comes to political financing. My remarks and my analysis of Bill C-50 address those issues.

The rules of political financing are at the core of a democratic regime. We must be aware of the fact that Bill C-50 can impact the balance of political forces and the arrival of new players in a partisan system. That is the case when the rules of political financing are directly or indirectly concerned.

The State has a definite responsibility regarding transparency and equity among voters. That is the oversight role that it must play when it comes to political parties and their financing.

Over the years, Canada has managed to develop a model that differs from the one in the United States and which gives central stage to the voter. It has been a fundamental principle of the Canada Elections Act for a few years.

After further analysis of Bill C-50, we find that it does not question the principles of transparency and voter primacy, but upholds them. It will, actually, increase transparency, but it will not solve the structural problems raised in the political debate, including those related to equity and trust, despite its objectives.

Generally speaking, what are the goals of Bill C-50? First of all, it aims at fighting a certain type of cynicism in response, of course, to critics raised regarding access to elected officials based on political contributions. It seeks to avoid situations in which contributing to a political party is perceived as a way for the richest members of society to get a privileged access to politicians.

In what way does Bill C-50 meet these objectives? First of all, we must recall that, like most bills on election regulations, this one stems from a media frenzy. The party-managed registry of financing activities that will be created as a result of this bill will most likely end up being managed by the Chief Electoral Officer.

One of the important consequences of this bill is that, once it’s passed, it will lead to a registry of lobbyists logic. It is a structural effect that must be debated and given some thought. In other words, the bill will create a dynamic similar to that of a registry of lobbyists.

In a democratic financing system, the origin of donations must, of course, be made public. Bill C-50 goes further when it asks that financing activities be published in a registry, five days in advance, followed by the names of participants. It is a political or transparency dynamic more similar to the prior disclosure of influence activities than to activist activities.

Similarly, the bill could have adverse effects on political dynamics. Initially, such a process will be much more difficult to handle for smaller parties than for the strongly institutionalized ones that enjoy a well-established partisan bureaucracy to manage accountability. That is the first thing.

Moreover, the bill will increase political parties’ risks of breaches, penalties, and blame given the multiplicity of their financing activities. It could also deter certain activists from contributing to political parties; at least, that is what I fear. It confirms the perception that it is suspicious to make a contribution to a political party while, in reality, as I was saying from the outset, contributing to a political party is an exercise in democracy and activism. Even though, in its current form, the bill includes exemptions during an election period, the political dynamics could lead to these exemptions being called into question.

Let’s come back to the bill’s objectives. In order to reduce cynicism and to show that the perception that donors get access to elected officials in exchange for contributions is false, I believe that we must think more about lowering contribution thresholds. We must lower the annual contribution thresholds to a political party. We must also think about reintroducing a type of State allowance.

As for the other aspect concerning the oversight of nomination contests and leadership races, the bill responds to the Chief Electoral Officer’s recommendations to account for all expenditures. No one is better positioned than him to establish the appropriate legal terminology to achieve these objectives.

As far as I’m concerned, the questions arising from the analysis of the bill centre around two elements. Why not extend its provisions to include the election of all national party officers? We know that there are campaigns to elect committee chairs and different national executive positions within a party, which are, ultimately, prestigious positions.

Why not also review anonymous donations? We know that Canadian legislation is much more tolerant than that of other jurisdictions, for instance Quebec.

In conclusion, your committee’s work is essential to democracy. The study of political party financing goes beyond a bill to encompass the balance of political forces both in a Parliament and in civil society. By changing the rules of financing, we intervene in what constitutes the sinews of war in politics: funding.

It is important to assess both the positive and potentially negative impacts of amendments. I’m afraid that Bill C-50 will change the perception of what constitutes a political donation — which, in my opinion, must be associated with political activism rather than a gesture of influence — by adapting or integrating a dynamic specific to the registry of lobbyists.

Thank you for listening to me.

[The Chair, Liberal, Larry Bagnell]

Good morning. Welcome to the 73rd meeting of the Standing Committee on Procedure and House Affairs. The meeting is being held in public. Today we are continuing our study of Bill C-50, an act to amend the Canada Elections Act with respect to political financing.

Our witnesses today during the first hour are Professor Eric Montigny, department of political science, University of Laval; and Dr. Leslie Seidle, research director, Institute for Research on Public Policy.

Thank you both for being here. You'll each have up to 10 minutes for opening statements and then we'll have questions related to Bill C-50. With all your knowledge, if you're asked a question on something else, it's up to you whether you wish to answer.

Thank you, and we'll start with Mr. Montigny.

[David Graham, Liberal, Laurentides—Labelle, QC]

Who would have to be invited to the event in order for it to be subject to Bill C-50?

[David Graham, Liberal, Laurentides—Labelle, QC]

That's interesting.

I'm going to switch gears now.

You talked about the people to whom Bill C-50 should apply: ministers' agents, opposition leaders, and third parties. Who are all the people you think the bill should apply to?

[The Chair, Liberal, Larry Bagnell]

Welcome back to the 72nd meeting of the Standing Committee of Procedure and House Affairs, where we are currently studying Bill C-50, an act to amend the Canada Elections Act in relation to political financing.

Our witness in the second hour is Jean-Pierre Kingsley, Canada's former Chief Electoral Officer from 1990 to 2007, certainly an icon in Canadian elections history. I'm sure people who have been here a long time, such as David and Scott, know you well from previous meetings and previous topics.

We're very excited to have you here today. We look forward to your opening comments.

[David Christopherson, NDP, Hamilton Centre, ON]

Not at all, before or after—nothing. That's interesting.

You raised a lot of interesting issues. I find it interesting too that you didn't spend a lot of time focusing on the details of Bill C-50. Is that because you just don't think it's making that much difference, and so you kept your comments at the macro level where you thought they would make a difference, or did you just run out of time?

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Chair.

Thank you very much for being here, Mr. Conacher.

First, as you're one of the premier grassroots organizations, was there any consultation with your organization on the development of Bill C-50?