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.

[Duff Conacher, Co-Founder, Democracy Watch]

Thank you very much, Chair.

To members of the committee, thank you for this opportunity to present to you today on Bill C-50. As mentioned, I am co-founder and coordinator of Democracy Watch and chair of the Money in Politics Coalition, which is made up of 50 organizations with a total membership of 3.5 million Canadians.

The coalition has been advocating changes to the federal and provincial political finance systems now since 1999, and is calling for changes to Bill C-50 to stop cash for access and the influence of big money in federal politics.

The bill, I believe, based on the framework, in that it addresses contributions in some sections and others, can be amended by the committee and sent back to the House, and should be, to make changes to ensure that wealthy individuals cannot use money as a means of unethical influence over politicians or parties, and also to stop the funnelling of donations, which has happened in every jurisdiction in Canada that has banned corporate or union donations but that has maintained much too high a donation limit, such as at the federal level.

The $3,100 a year to a party and its riding associations is much more than an average voter can afford. That amount violates the fundamental democratic principle of one person, one vote. It allows people with money, who can afford to make that maximum donation, to use money as a means of influence.

To think that anyone who is donating the maximum does not get some kind of return on that is naive, based on what we've seen in the past across Canada with various fundraising scandals. Even if it is simply an invitation to a Laurier Club event, that is access that you can only buy, and is therefore undemocratic and fundamentally unethical.

Sports referees can't take gifts from players, so why are politicians continuing to allow themselves, as the referees of what is in the public interest, to essentially be influenced by large gifts of money, property, or services, up to $3,100 annually, in terms of what can be given to a party or a riding association?

The coalition and the more than 11,000 voters who have signed the petition on change.org are calling for changes that will stop big money in federal politics and stop cash for access. These are to lower the donation limit to $100, as in Quebec; strengthen enforcement and penalties for violations; and only bring back per-vote funding or some kind of matching public funding such as Quebec has if the parties can actually prove, and candidates can actually prove, that they need this public financing in order to prosper financially.

These are the major changes that we are calling for.

As well, loans should be limited to the same amount as donations. If donations are limited but loans are unlimited, then federally regulated financial institutions can use loans to essentially buy influence with the parties. Yes, they have to give those loans on the same terms as they loan to anyone else, but giving a loan to a candidate or a party helps the candidate or party.

Clinical psychologists have tested thousands of people across the world, and found in every case that even small gifts have influence on decision-making. One of the best-documented areas is with doctors and prescriptions, even with doctors receiving free samples from drug companies that they don't use themselves but can pass on to their patients. It doesn't save the doctor any money at all, but just giving free samples to doctors has been shown through clinical testing to influence their prescribing decisions, although the doctors deny it across the board.

To think that donations do not have an influence over any politician or party official is to pretend they are not human. Humans across the world have been tested by clinical psychologists in double-blind studies, and it's been found that even small gifts influence everybody.

That's why the solution, the way to stop the influence, is to limit the donation that can be given annually to an amount that an average voter across the country can afford, and that's $100. That's what Quebec has done. It's a world-leading system. The public financing is too high. It doesn't have to be as high as it is. In terms of the donation limit, the fact that a donation above $50 has to be routed through Elections Quebec ensures that funnelling cannot happen and that people are only giving their own money and only giving no more than an average voter can afford.

The too-high donation limit federally also facilitates funnelling, which has been seen at the federal level with SNC-Lavalin. In Quebec, finally Elections Quebec did its job in 2011 and looked back five years and did an audit of donations. It had banned corporate and union donations in the late seventies and there had always been rumours that corporations were funnelling donations through their executives and their family members and through employees and their family members. Elections Quebec finally did an audit in 2011 after the corruption scandal broke there, and they found $12.8 million in donations that had likely been funnelled from businesses through their executives and family members. That was $12.8 million over a five-year period.

Funnelling is happening at the federal level. Elections Canada promised to do an audit four years ago. It hasn't done it yet. If they do, they will find it. It's been found in Toronto and it's been found in every jurisdiction that's banned corporate and union donations but left a donation limit that is too high and that facilitates funnelling, as the federal donation limit does. With the $3,100 limit, you get 10 executives and their spouses to each give $3,100, and boom, you've given $62,000 to a party.

That's big money. That has big influence, and the only way to stop it is to lower the donation limit.

Democracy Watch has filed complaints about the fundraising events held last year and in years past with the Commissioner of Lobbying. We're hoping that the Commissioner of Lobbying at least will stop lobbyists who are registered or should be registered from participating in such events, but Bill C-50, despite making the events transparent, is not going to stop cash for access. MPs will still be allowed to do the events. The staff of cabinet ministers can be at events without it even being disclosed under Bill C-50, so there's not even transparency about a senior government official being at an event, only people who are candidates or party leaders or cabinet ministers. The bill will not stop cash for access. It will not stop the influence of big money.

There is a problem with big money. I will give you just one example of an analysis that Democracy Watch did. It was very difficult to do because of the way Elections Canada discloses the donations, but I did a ton of number-crunching and I determined that in 2015 the federal Liberals received almost 23% of their donations from just over 4% of wealthy donors, who gave $1,100 or more to the party. To do that analysis of what happens at the riding association level is not impossible, but it would take months and months, because Elections Canada doesn't consolidate any of those figures. That's just donations to the party: 23% of the party's money came in from donations from just 4% of wealthy individuals who could afford to give $1,100 or more. That's a cash-for-access system. Those people at the time would have been invited to a Laurier Club event, possibly other events. I'm quite sure if the Access to Information Act were to be extended to ministers' officers, we would find that they get their calls returned more quickly than others, get meetings more quickly than others, get access to staff and senior government officials more quickly than others across the board. We don't have the kind of transparency that would prove that. I hope we will get it through Bill C-58, as the Liberals promised to extend the act to ministers' offices, or through the changes to the Lobbying Act, which has to be reviewed this year.

Within the framework of Bill C-50, I believe it's completely within order under the parliamentary rules for you to make these changes to Bill C-50, because the bill mentions contributions and all the other areas I've talked about.

I have not made a written submission to you today, but there is a news release up today on Democracy Watch's website that will be translated and distributed by the clerk, so you will have all the details.

I welcome any of your questions. Thank you very much.

[The Chair, Liberal, Larry Bagnell]

I call the meeting to order.

Good morning, everyone. Welcome to the 72nd meeting of the Standing Committee on Procedure and House Affairs. This meeting is being held in public. Today we are continuing our study of Bill C-50, An Act to amend the Canada Elections Act (political financing).

Our witness during today's first hour is Duff Conacher, co-founder of Democracy Watch and chair of the Money in Politics Coalition.

Thank you for being here, Mr. Conacher. You have 10 minutes for your opening statement. The floor is yours.

[David Christopherson, NDP, Hamilton Centre, ON]

Okay, it's getting us partway there.

All right, let me ask this question. Were you consulted on the development of Bill C-50?

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

In a situation where the ticket price is under $200, let's say $150, and the prime minister or a minister is present at those events, would it be within the rules that further donations could be solicited at the event? It's $150 to attend the event, but then at the event there's a representative of the Laurier Club, for example, encouraging a maximum donation at that event. Would that be permissible within the current provisions of Bill C-50?

[Chris Bittle, Liberal, St. Catharines, ON]

Bill C-50 contains a number of exemptions to the reporting requirements, predominantly for those who are executing the fundraising event. However, it's not clear if a personal support worker for an attendee would also be exempted if they attended in the course of their employment. Would you support an exemption for people like a personal support worker who may be present at the fundraiser in support of someone who has paid to attend, so in terms of an accessibility piece?

[Chris Bittle, Liberal, St. Catharines, ON]

Many fundraisers offer a chance to buy a table's worth of tickets. In that case, some donors may donate much more than the single ticket price. However, in that practice, they have actually purchased a number of tickets and could invite a number of guests. For example, there could be a $50 fundraiser where donors are invited to buy a table for $500. Based on your reading of Bill C-50, would that option, the option to buy 10 tickets for $500, trigger the new regime, assuming a designated politician was in attendance?

[Chris Bittle, Liberal, St. Catharines, ON]

In your report after the election you made a recommendation that there be administrative and monetary penalties regimes in order to help with enforcement. Would such a regime help with the enforcement of the provisions in Bill C-50?

[Stéphane Perrault, Acting Chief Electoral Officer, Elections Canada]

Thank you, Mr. Chair.

I'm happy to be here today to speak to Bill C-50. I will try to keep my remarks brief to leave as much time as possible for questions from the members.

Bill C-50 has two main elements, both related to political financing. The first element is a new regime for reporting on certain fundraising events. The second element is more technical and relates to correcting a long-standing problem regarding the regulation of leadership and nomination campaign expenses and contributions. I will speak to each aspect in my remarks, but will focus primarily on the first component of Bill C-50.

I have also distributed a table containing a few technical amendments for the committee's consideration for the better administration of the proposed provisions in this bill.

The first element in Bill C-50 is a new regime for reporting on regulated fundraising events. The requirements for disclosing information and reporting apply only to certain fundraisers. To fall within the scope of the bill, a fundraiser will need to have all of the following three elements. First, it must be organized for the benefit of a party represented in the House of Commons or one of its affiliated political entities. Second, the fundraiser must be attended by a leader, a leadership contestant, or a cabinet minister. Third, it must be attended by at least one person who has contributed over $200 or who has paid an amount of over $200, part of which includes a contribution, as a condition for attending the fundraiser event.

In this regard, I note that the bill offers a calibrated approach. Not all parties will be subject to the new requirements and I believe that is a good thing. Similarly, the rules will not apply to all fundraising activities, but only those for which a minimum amount is charged to attend and where key decision-makers are also present.

There is also an important exception for party conventions, including leadership conventions, except where a fundraising activity takes place within the convention. The convention itself is exempted, but if there's a fundraiser that meets all the conditions within the convention, then that is caught by the new rules. Again, this reflects a concern to achieve a proper balance and I think it is wise.

However, I note that donor appreciation events held at party conventions will be exempted from the proposed rules. I understand that this reflects a concern with regard to the fluidity of attendance at such events and practical difficulties in applying the rules. This is something that the committee may wish to examine.

In order to improve transparency, Bill C-50 provides for two types of disclosure to be made with respect to regulated fundraising events. First, a notice of such events must be prominently posted on a party’s website at least five days prior to the event. Second, a report must be provided by the party. Even if the fundraiser is made for the benefit of affiliated entities, it is the party that must provide the report to the Chief Electoral Officer within 30 days of the fundraiser. This report must include details of the fundraiser, including the names and partial addresses of attendees, and the names of any organizers of the event. There are some exceptions to protect the privacy of people working at the event or underage persons who may be attending.

These disclosures would vary during a general election. Notice of a regulated fundraising event would not be required and a single report for all fundraising events held during a general election would be due to the CEO within 60 days after polling day. In practice, this may prove to be a tight timeline. There are clauses for extensions, but I think that we’ll see over time whether that 60-day period is a good balance.

Generally speaking, the bill increases the transparency of political fundraising, which is one of the main goals of the Canada Elections Act. It does so without imposing an unnecessary burden on the smaller parties that are not represented in the House of Commons or for fundraising events that do not involve key decision-makers.

That said, I am proposing a number of minor and technical amendments to improve the administration of Bill C-50.

First, as parties are required to publish notices on their website of fundraisers covered by Bill C-50, I would propose that parties be required to also notify Elections Canada of such a publication. This will assist Elections Canada in administering the Act and in ensuring that the reports to be submitted 30 days later are indeed submitted.

Second, so that the bill more closely mirrors current authorities in the Canada Elections Act for other reports, I am recommending that the CEO be permitted to request, in writing, substantive corrections and revisions to reports submitted after a regulated fundraising event.

Consideration should also be given to adding an offence for filing a false, misleading, or incomplete report so as to bring this bill in with other components of the existing regime for financial returns.

I will now turn briefly to the second element of Bill C-50, which deals with the definitions of leadership and nomination campaign expenses in the Canada Elections Act.

This aspect of the bill responds to a recommendation made by Elections Canada and recently unanimously endorsed by this committee. The purpose of this change is to ensure that all expenses and contributions made in relation to leadership and nomination contests are regulated.

Not surprisingly, Elections Canada supports these proposed changes. The current definitions are not aligned with the goals of the act and are difficult for both nomination and leadership contestants to understand and comply with.

There is, however, an amendment that is contained in our table of amendments and that I would recommend be made to this part of the bill. It is essentially meant to ensure that only expenses and contributions in relation to leadership and nomination campaigns are captured by the new definitions and by the rules on expenses and contributions.

I would say, respectfully, that there was an unintended broadening of the definition and that the wording of the definition needs to be clarified.

That is all I have to say. Thank you.

I would of course be pleased to answer any questions the committee members may have.

[The Chair, Liberal, Larry Bagnell]

Hello everyone.

Welcome to the 71st meeting of the Standing Committee on Procedure and House Affairs. This is a public meeting.

Today we are continuing our study of Bill C-50, An Act to Amend the Canada Elections Act (political financing).

The two witnesses are from Elections Canada: Stéphane Perrault, acting Chief Electoral Officer, and Ms. Anne Lawson, general counsel and senior director, legal services. Thank you for being here.

I will now give the floor to Mr. Perrault so he can give his presentation.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Okay. Thank you. To me, that didn't really explain why the Prime Minister didn't simply choose to follow the rules rather than making a legislative change.

At any rate, I'd like to ask you about the June 19 fundraising event the Liberal Party held that featured the Prime Minister speaking. It was after promising to abide by the rules of Bill C-50 and be open to the media. Can you explain why, even after that, the Liberal Party staff restricted media access? I know of at least a couple of instances where it happened. The Ottawa bureau chief of the Huffington Post, Althia Raj, and Joan Bryden from the Canadian Press were being denied access, or restricted access. Can you explain why, once the media was allowed inside, they were cordoned off in one particular area and not allowed to mingle with the guests? Can you explain why a Montreal reporter with the Canadian Press was told to leave?

Minister, I don't understand why you're bothering to put rules in place when it's quite clear that the Liberal Party is simply going to break them.

[Blake Richards, Conservative, Banff—Airdrie, AB]

Sure.

Anyway, for those who are listening today, I'd like to quickly summarize the actual reason you're here today and how Bill C-50 came to be, and I want to be clear about it. It's because the Liberal Party was selling access to the Prime Minister at events where tickets were costing up to $1,525. That's the reason. These were cash-for-access events, where the Prime Minister has openly admitted that he had people trying to lobby him, which was a clear violation of Liberal Party rules and a clear violation of the Prime Minister's own ethics code. These cash-for-access events resulted in the Ethics Commissioner and the Commissioner of Lobbying launching investigations. The only reason Bill C-50 is before us today is that the Liberal Party got caught breaking those rules. In fact, the Prime Minister got caught breaking the very rules that he himself created.

Just for a little clarity, I'd like to read from the Prime Minister's own “Open and Accountable Government”, a principle document. I'll just read the first paragraph of annex B. It's a brief one:

Ministers and Parliamentary Secretaries must avoid conflict of interest, the appearance of conflict of interest and situations that have the potential to involve conflicts of interest.

Further down it says:

There should be no preferential access to government, or appearance of preferential access, accorded to individuals or organizations because they have made financial contributions to politicians and political parties.

I wonder, Minister, if you could explain why the Prime Minister just doesn't simply abide by the rules, the ones that he himself, in fact, set in place. If he would just abide by those rules, then we wouldn't have to be having this conversation.

[David Christopherson, NDP, Hamilton Centre, ON]

I would love to debate that with you sometime, but I do appreciate your giving me your unvarnished opinion. Thank you.

Moving now specifically to Bill C-50, Chair, my colleague Mr. Reid just said that Bill C-50 was not very substantive in his opinion. He's being very kind. This has so little impact at the end of the day that this could be a Seinfeld episode.

Let me pick one: five days, for instance; now democracy will be saved because five days ahead of a fundraising event, you can now find that event on a website prominently. We'll come back to “prominently” in a moment. Five days; in over three decades of public life, I have never heard of a significant fundraiser being pulled together in five days. Clearly, the organizers would have known that this event was coming for a long time, well before five days. What's with the five days? Who are you trying to kid?

[David Christopherson, NDP, Hamilton Centre, ON]

Very good. Thank you, Chair.

Thank you, Minister, for attending. It's good to see you again.

Before I get into Bill C-50, I just want to ask your opinion on something. I realize you are not planning to bring this in, but it's relative to this, and it has to do with public financing of elections. Fantastic, healthy democracy comes from it. The politics are horrible.

Pleasantly surprise me. Tell me you are planning— I'm assuming you're not planning—to bring in this change. However, I'd like to know whether you are thinking about that and whether you believe, as our minister, that it's healthy for democracy or not. Given that your government brought it in and then the Conservatives took it out, I'd like to hear your thinking on that, please.

[Scott Reid, Conservative, Lanark—Frontenac—Kingston, ON]

I think I can parse the words. My own sense is that further pursuit by this committee of work in that direction might get to you after your own internal deadline. I think that's what I heard. Although you didn't actually say that, I think that's what I read between the lines.

Thank you, Mr. Chair, for your indulgence on that matter.

Let me turn, then, to Bill C-50. I would just say that I find the bill unobjectionable, but also not really very substantive in that holding a fundraiser, which has been characterized as a cash-for-access fundraiser or a pay-to-play fundraiser, is not against the law. Once the legislation is passed, it still won't be against the law. There will be some reporting requirements, but nothing will have changed substantially.

The thing that people objected to has also not been addressed. The objection was that if you have sufficient money to buy tickets, you can have access to the direct presence of a minister of the crown, or indeed to the prime minister. I don't see that as having been resolved. The issue was never that the law was being violated. It was that a kind of ethical sniff test was not being met. I just don't see any evidence that this is actually being addressed.

Let me ask the obvious question. Why didn't you pass a law that said, as it did in Ontario, you can't have this kind of event, full stop?

[Scott Reid, Conservative, Lanark—Frontenac—Kingston, ON]

Thank you very much, Mr. Chair.

First of all, just let me make a comment about our colleague, Arnold, who would have had a lot of thoughtful insights were he to be present at today's meeting.

I know, Minister, you were at his service on the weekend. I saw you there. It was a very busy service. There were a lot of people there. I saw at least three of the colleagues who are here, and I know there were others whom I didn't see. It's just an indication of how well respected he was on all sides of the House.

I want to ask you, if I might test the chair's indulgence on this point a little bit, about a matter that is not the matter on which you are appearing before us. It's not about Bill C-50; rather it's about the legislation that may be forthcoming regarding the subject matter of the CEO's report on the 42nd election.

What we've been trying to determine here in this committee is whether your legislation is likely to be forthcoming soon or whether it's further away. That will determine our course of action. Do we reopen our discussions into that matter, or do we just say that there is no point in pursuing it, there is not time for us to report back to you, for the information to get to you, or for the legislative drafting to occur?

I know when you were asked by the media, you were reluctant to respond. You want to make those comments in Parliament first, but we're now in Parliament so I thought I could maybe prevail upon you.