Bill C-2 (39th Parliament, 1st Session) Committee on June 1st, 2006

[The Chair, Conservative, David Tilson]

Good morning. This is the legislative committee on Bill C-2, meeting number 18, and the order of the day, pursuant to the order of reference of Thursday April 27, 2006, is Bill C-2, an act providing for conflict of interest rules, restrictions on election financing, and measures respecting administrative transparency, oversight, and accountability.

I'm looking for witnesses.

You may come to the front, presuming you're all here.

Our guests this morning are Michael D. Donison, the executive director of the Conservative Party of Canada; Steven MacKinnon, the national director of the Liberal Party of Canada; Eric Hébert, federal secretary, and Jess Turk-Browne, assistant federal secretary, of the New Democratic Party; Gilbert Gardner, general director, and Martin Carpentier, director, of the Bloc Québécois.

It's good to see you all together here. The rule is, as I'm sure you know, that you each can make a few preliminary comments if you wish, and then there'll be questions from members of the committee. I don't know whether you can agree as to who is going to start. We'll start the way I read them.

Mr. Donison, good morning to you, sir.

[Michael D. Donison, Executive Director, Conservative Party of Canada]

Good morning Mr. Chairman, members of the committee. First of all, on behalf of myself, the Conservative Party, and I think certainly all the other parties represented, I want to thank the committee, and particularly you, Mr. Chair, for allowing us the opportunity to come before your committee.

The subject matter this morning, of course, is in particular the extent to which Bill C-2 deals with the electoral process and the proposed amendments in Bill C-2 to the Canada Elections Act. As both a student of this process for many years and now a practitioner, I must say this is not a subject that the average Canadian gets really excited about. Even I'm not too excited at 8:10 in the morning, Mr. Chair, but I'll do my best.

The Federal Accountability Act, Bill C-2, basically does two things, I think--it has some minor amendments, but there are two major changes in the electoral law--and I want to say that I think both of those major changes are all movements towards increased accountability and transparency in this essential electoral process in Canada. The two of those, of course, are some changes on the rules considering political party financing and the other change is in the administration of the conduct of the election itself.

On political party financing, as you know, basically what the bill does is create a situation where the maximum contribution that any individual Canadian can give to the national party is $1,000 and then another $1,000 to the local emanations of the party. It seems to us, from the Conservative Party's point of view, that this is an excellent further reform in our electoral financing system. What the $1,000 limit does in both cases, in our view, is it certainly puts to rest any sense now that there is financial influence in this electoral process, either in substance or in appearance. I don't think anybody can seriously argue that an individual giving $1,000 to a political party or a candidate is going to exercise some sort of undue influence. So I think the $1,000 threshold is a good one because it basically ends any argument of substance or appearance. And in an electoral process, appearance is also very important, as honourable members know.

The other change, of course, and I think it's long overdue--I think it is a holdover from, if I may say, Sir John A. Macdonald's era--is that in a federal general election, or a byelection for that matter, the senior state official responsible for the administration, the conduct, of the election within an electoral district is a cabinet appointee. I'm talking, of course, about the returning officers. That's the other really good reform in this bill, Mr. Chair, that we're finally ending this vestige of even any sense of patronage power in the executive in the appointment of returning officers, giving that power to the chief electoral officer, where I think it should be. So I think that is an important reform, and it's certainly one that our party welcomes.

Those are my basic comments, Mr. Chair.

[The Chair, Conservative, David Tilson]

Thank you, sir.

Mr. MacKinnon, do you have some comments?

[Steven MacKinnon, National Director, Liberal Party of Canada]

Mr. Chairman, committee members, thank you for inviting us to appear before you today.

I join with my colleague in offering my thanks, but I must say, however, that, in my view, a change as extensive and radical for the political parties as this one deserves more than a five-minute speech to stakeholders who are also affected by this situation. Having said that, I am grateful for the opportunity that is afforded me here.

I am the National Director of the Liberal Party, and I'm proud of that. I'd like to comment on four specific subjects included in Bill C-2: contributions and contribution limits; political party conventions; persons responsible for the administration of elections at the local level; and the coming into force of the provisions of this act.

Specifically on individual contribution levels, we think $1,000 is unreasonable. We think that Bill C-24, passed by members of this House not much more than two years ago, is the most sweeping, open, transparent campaign finance reform undertaken in any western democracy, which I am about to demonstrate.

It is Liberal legislation. It is legislation we support. It is legislation that has been good for this country. However, it is also legislation so sweeping and vast in its import that it is puzzling and perplexing to me that no serious examination of the impact of Bill C-24 has been conducted by a committee of this House or anyone else, nor, frankly, has very much academic research been conducted on Bill C-24. And yet here we are, proposing further sweeping, radical changes to the system of campaign finance and party financing in Canada.

Bill C-24 never contemplated minority governments. If you speak to any of the officials or, frankly, any members of Parliament involved in adopting Bill C-24, their model, the assumptions they used to make the calculations in that bill, were clearly erroneously based on and predicated on the perpetual existence of a majority government and a four-year election cycle. That was part of the inherent trade-off between the limits on contributions and the limits on who may give to political parties, and public financing of political parties.

So I recommend and think and suggest that this committee or another committee of this House be charged with the examination of Bill C-24 and the assumptions made when it was adopted.

But all of that said, we support the philosophy and the specific implementation of Bill C-24. We think that public financing of political parties is a good thing.

Political parties are also a good thing. I am puzzled and perplexed every time I hear members of this House, members of our parties, all parties, including my own, throw mud at each other over people who donate to political parties. Political parties are a bargain. Political parties are good. The financing of political parties is good. Donating to political parties is good. Yes, it should be transparent, but it also should be encouraged. That kind of civic participation is a participation that benefits society as a whole.

Other parties claim their accomplishments. I would like to say that the Liberal Party has been a bargain for Canada. We don't even know if there would be a Canada without the Liberal Party and without the volunteers and the donors to the Liberal Party over the past 125 or more years.

So I would invite you to consider that a $1,000 contribution limit is low. We have restrictions now that amount to a cap of $5,400 from individuals only. I would like to offer for the committee some comparative data from around the world. We could start with the G-8. In the U.S. the limit is $27,500, and I'm talking now about donations to national political parties and the caps on those, forgetting about congressional, presidential, and other campaigns, and I'm doing a rough conversion into Canadian dollars.

In England, in the United Kingdom, there's no limit. In France, the limit is $6,500. In Germany, as well, there is no limit. In Japan, the limits are $145 and $150.

In Italy, it's $14,600. Some other countries that may also offer some appropriate comparisons are Spain, where it's $60,500; Ireland, $8,900; Sweden, no limit; and in Australia--a country we seem to be fond of these days--no limit. The government of Mr. Howard has not chosen to introduce this kind of reform.

As you can see, Canada has pretty sweeping and restrictive amounts on contributions. I think the others should serve as a comparison for this committee.

We also question whether this act would stand up to a charter challenge, a challenge of whether $1,000 is reasonable. In fact, we have not had a judicial test of whether the current limits are reasonable. I would invite you to consider that.

[The Chair, Conservative, David Tilson]

Mr. MacKinnon, I know you have a lot to say, and I want to leave time for questions. If you could perhaps conclude, we have two more parties to go through.

[Steven MacKinnon]

Thank you, Mr. Chair. I will attempt to be brief.

If this committee was to pursue a lower limit of $1,000, or any other limit, there is an important facet in the area of party conventions. We all have party conventions; party conventions are a good thing. They draw people from across the country. They debate policy. They get the most active people in political parties together.

The Canada Revenue Agency has judged, and our legal advisers have advised, that we must provide receipts for convention delegate fees. The Liberal Party is a federation, which means that we have provincial conventions and national conventions, all of which may total more than $1,000 in a given year. We are required to have biennial conventions, which means that every two years someone is attending a national convention. Delegate fees, unfortunately, are very sizeable because of the size of this country and the size of our conventions.

With your indulgence, Mr. Chair, let me read, if I may, from a legal opinion we have:

Pursuant to subsection 127(4.1) of the Income Tax Act, any amount paid to a registered political party by a taxpayer is a “monetary contribution” within the meaning of the Canada Elections Act unless it is a monetary contribution for which the taxpayer receives or is entitled to receive a financial benefit of any kind other than a tax deduction or other financial benefit prescribed by the Income Tax Act.

Therefore we must issue an Elections Canada receipt to--

[Benoît Sauvageau, Bloc, Repentigny, QC]

I'm sorry, we didn't understand that part. Can you repeat it?

[Steven MacKinnon]

All right. I can repeat it in English.

[The Chair, Conservative, David Tilson]

Mr. MacKinnon, I think committee members would be interested in having that opinion, if you'd be prepared to give it to us. I want to keep this moving, Mr. MacKinnon. We have a timeframe here. I think it would be useful if you could give that opinion to the clerk. If it is not translated, we will get it translated. Then we could move on to the other two parties.

We have been going for some time, so please conclude.

[Steven MacKinnon]

Let me conclude, and I'll come back to that in a second.

In any event, when looking at contribution limits, conventions cannot be ignored. I do not think that donors should be disenfranchised from attending conventions.

The second thing to contemplate is the possibility of two elections in one year. That is something that all members should rightly be concerned about. You could not go back to your most ardent supporters in a second election in any given year for support, because the act does not contemplate separate limits for separate elections.

Finally, and very quickly, we accept, as does my colleague from the Conservative Party, the returning officer provisions of Bill C-2. We think that is a positive evolution.

I would also like to emphasize that this act should not enter into force before January 1 of the year following royal proclamation. I encourage the members of this committee to consider the comments by Mr. Kingsley, who stated before you that Elections Canada should raise awareness and introduce an information program to make the public aware of these changes before the act enters into force. We encourage you to consider a time limit set at January 1 of the year following royal proclamation.

[The Chair, Conservative, David Tilson]

All right.

From the New Democratic Party, we have Mr. Hébert.

[Eric Hébert, Federal Secretary, New Democratic Party]

Thank you very much.

In our view, this bill is really a step in the right direction. We see once again the extent of participation by unions and businesses in the political system. That's the reason why, in discussions on Bill C-24, we proposed that the $1,000 amount be completely eliminated, because we thought it posed a problem at the technical level and with regard to perception.

It is true that Canada is ahead of a number of developed democracies as regards its political financing legislation, something we should be proud of. However, we still have work to do.

It's also true that the new limits will force us, as political parties, to go after contributions from a larger number of individuals. I think that's a good thing.

When as political parties we are able to simply rely on a handful of donors to give significant contributions, we don't broaden our base or appeal; we don't engage a larger number of people in the political system. So we believe a lower limit is very healthy, and we also recommend it in the discussions regarding Bill C-24.

There are a few recommendations, however, we would make in terms of amendments. One of the nice aspects of this particular piece of legislation is that the $1,000 limit on individual contributions is divided between the local and federal entities of the party, which means that if an individual wants to give $1,000 to their local riding association they can do so, and then give $1,000 to their federal party. This means that within a political party we're not fighting ourselves for the same donor dollars, which is definitely a healthy benefit in this legislation.

However, one of the problems with this particular piece of legislation is that in effect what happens in a number of our parties—certainly in the major parties and in some of the minor ones as well, I would argue—is that the federal parties receipt donations for many of our local entities for credit card or other such donations. For example, a riding association may decide to submit an individual donor's $500 contribution on a credit card to the federal party, so that we can process the donation, instead of 308 ridings having to create their own credit card systems and so on. As a result, we receive the contribution and transfer the money back to the riding. It's all very transparent, and we know how the money flowed. At the end of the day, it allows us to save a lot on the financial administration fees that many of our volunteer organizations would end up having.

The problem with this division now is that if the federal party is receipting all those contributions, a person hits his or her maximum contribution with the federal party before doing so at the riding or local level. So we would recommend that in the same way the act currently provides for federal leadership to have the ability to receipt contributions on behalf of another entity, we be able to do the same with riding associations.

This is particularly important regarding another new provision of this legislation, which is that donations over $20 cannot be made in cash. We believe the accountability of this is very important. The transparency, the paper trail, and so on are very important aspects, but the fact is that many of our local entities, which receipt contributions, are required at that point to either have credit card facilities, or people must bring cheques with them to events and so on. This is a concern that needs to be taken into account, and we hope that by amending the legislation to allow $1,000 to be receipted federally—of course, with proof that it's actually going to the benefit of a particular riding—that this be considered.

On the elimination of corporate and union contributions, we fear that it may be subject to charter challenge too. I believe in part that Bill C-24 allowed limited contributions to prevent this sort of problem from happening. However, instead of simply abandoning the idea of eliminating those contributions—because we believe it's a good step—we would recommend that you do what is currently done in the act regarding unincorporated associations, which are allowed to solicit individual contributions up to a maximum of $1,000 in a particular year. This allows corporations and unions to have a political role, if you will, without being seen as having an influence.

[The Chair, Conservative, David Tilson]

Mr. Hébert, I'd like you to wind up soon. You've been going for almost 20 minutes and I want to leave time for questions.

[Eric Hébert]

Sure. I will simply end the presentation on two final items.

The last thing we would particularly like to see in this legislation is something along the lines of a limit on leadership spending in leadership campaigns. We believe this is something of a bit of a problem in our system. All other campaign entities have to live within limits and we believe that leadership contestants should have no exception.

Finally, on the issue of whether conventions should or should not be part of the donor limits, political parties have various emphases on internal democratic procedures, some perhaps more than others. Some, of course, can afford to force their delegates to pay high delegate fees. We think it would be an unfair exception to be made within the act, so I would recommend strongly against the idea that conventions be excluded, particularly when a lot of these are internal democratic processes that, frankly, in our opinion, should be financed by the political parties themselves.

Thank you.

[The Chair, Conservative, David Tilson]

Mr. Gardner.

[Gilbert Gardner, General Director, Bloc Québécois]

Thank you, Mr. Chairman.

On the whole, the Bloc québécois is in favour of the principles of Bill C-2, particularly since it addresses a certain number of our party's traditional demands, in particular regarding the appointment of returning officers. However, it lacks one aspect that would improve Bill C-2: that returning officers should be selected following public competitions.

In December 2004, the Bloc québécois tabled a bill to introduce this amendment. We would be pleased to see Canada imitate Quebec 25 years later by requiring returning officers to be appointed by public competition. We recommend that section 503 of Quebec's Election Act be adapted to Bill C-2. That section provides as follows:

The appointment of a returning officer shall be made after a public competition among the qualified electors domiciled in the electoral division concerned or in a contiguous electoral division, provided, in this latter case, that the person is able to carry out his duties in as satisfactory a manner as if he were domiciled in the electoral division for which he is appointed.

In a previous appearance, Mr. Kingsley stated that he wanted to proceed by public competition in the event of vacancies. We think Bill C-2 would be improved if the obligation to hold public competitions for all electoral districts in Canada were included.

Now I'm going to talk about the coming into force of the new clauses 45 to 55 of the bill, which mainly concern authorized contributions. Apart from partisan reasons, there is no reason for these clauses to enter into effect at the time of assent. Citizens have made contributions during the year, based on the act as it stands today. Some have made bank authorizations and have spread their contributions over the entire calendar year. Introducing new provisions would be unfair for those contributors.

As regards the issuing of tax receipts, Revenue Canada could require parties to prove that the contributions were made before Royal Assent. For example, if Royal Assent is given on October 1, bank authorizations following that date would no longer be valid, whereas those made before that date would be. Does the tax receipt apply to the elector's entire contribution for the calendar year or only part of the calendar year? We think that, if you exclude partisan reasons, in the tradition of the implementation of this type of measure, the calendar year is normally the reference year.

We strongly recommend that you ensure that the provisions concerning contributions enter into force on January 1 of the year following Royal Assent.

[The Chair, Conservative, David Tilson]

Mr. Murphy.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Thank you, Mr. Chair.

I'm concerned for John Baird. He came to this committee as one of the very first witnesses and said, “We're going to get the money out of politics.” There may have been many people across the country watching, and it may have been printed in the print media to lead people to believe we were going to get the money out of politics through this long and arduous venture.

But I don't see anything here that will limit the use, for instance, by the major parties of massive amounts of money on negative advertising campaigns that denigrated the political process, in my view and in the view of many of my constituents, in the last couple of elections. I am directing the question primarily to Mr. MacKinnon and Mr. Donison, because I think you are the most guilty as party representatives of the big money negative ad campaigns.

My question is this. There's nothing in this reform about decreasing spending limits. From what I read, the Conservative Party is doing quite well at the bank in rolling in the money, so there'll be lots of money for lots more negative ads. And there's nothing here touching political action committees—PACs, or whatever you like—the non-political parties that deliver a political message on behalf of the major parties or other parties.

And I really don't think at the end of the day, especially with the limits on convention spending indirectly.... I do think there will be a limit on the democratic involvement at conventions and meetings of parties, which is what the democratic process is all about.

In other words, the public may be expecting, because they may have a fresh new feeling of optimism about Mr. Baird—whom I personally like, and he's a wonderful public servant, public office holder.... But what is this going to really do to take the money out of politics? I don't see how it is going to do that. It might even get worse, and the political process would be imbued with this big money negative ad spree if there are no limits on spending.

[The Chair, Conservative, David Tilson]

We will start with Mr. Donison.

[Michael D. Donison]

Mr. Murphy, first of all, the question isn't about taking money out of politics; it's taking large donations of money from single individuals out of politics, and that I think the bill does.

All I can say in defence of my own party is the ads our party would have used during an election campaign were all funded, Mr. Murphy. You can go to the Elections Canada website and see—all small donations from individual Canadians.

Since Bill C-24 was enacted, which restricted corporate donations entirely to political parties, so that the national parties were left to receive money only from individual Canadians, the Conservative Party of Canada has received donations from in excess of 250,000 individual Canadians. The average donation, Mr. Murphy, is around $100.

So all the money that was used, other than the public money Parliament has decided to give to the parties as well.... All the expenses of our party have been funded either by small, individual Ma and Pa Kettles in Orillia, if I may use that riding, giving small donations to our party, or taxpayers' money as mandated by Parliament.

There are no big money contributions in any of that, certainly not under Bill C-24, and even more so under this bill. That would be my defence of that.

It's not a question of taking money entirely out of politics. There is money in politics. Parliament has mandated that there be public money and is now mandating that individual Canadians can make small, individual contributions as part of their role as citizens and residents of Canada. I don't see a contradiction at all.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Well, Ma and Pa Kettle don't like the negative ads either, but anyway....

Mr. MacKinnon?

[Steven MacKinnon]

Like my colleague's party's activities, all of our activities have been funded by small donors under the $5,000 cap and the taxpayers' money as foreseen under Bill C-24 as well—lest a faulty impression be created by the comments of my friend.

On negative advertising, I don't know that you can ever limit the freedom of expression of a political party, nor, I think, can you limit your observation, Mr. Murphy, to saying the Conservative Party or the Liberal Party were solely engaged in that. I think my other friends on the panel may want to share the load on that one.

Lest we get too fond of Mr. Baird and his Accountability Act, I think it is important that we share the accountability, however. This is a person who ran on a platform of receiving only thousand-dollar contributions, and I note from public filings that he accepted a number of contributions in excess of a thousand dollars for his election campaign and has done so since the election. I think it is important that this be placed on the record for this committee as well.

[The Chair, Conservative, David Tilson]

Mr. Hébert, do you have some comments?

[Eric Hébert]

I would like to come to the question around conventions. To me, a political party has a responsibility to its membership to have a democratic process, and that democratic process does not have to be, as far as I'm concerned, completely offloaded onto the people who participate there. I think a reasonable political party has to be able to finance its own conventions as well.

That means, for example, that we don't exclude people because they can't afford a $700 delegate fee. It means we have lower delegate fees as a result of making sure we're inclusive in that regard.

So I actually don't think that is the same concern. Whether a political party wants to charge a high amount or not is actually up to the political party, not up to the individuals participating in the process.

[The Chair, Conservative, David Tilson]

Monsieur Gardner.