Bill C-2 (39th Parliament, 1st Session) Committee on June 8th, 2006

[Marc Chénier, Counsel, Democratic Renewal Secretariat, Privy Council Office]

Thank you, Mr. Chair.

I think there are a few points that should be brought up for the committee's information.

When he appeared before the committee, the law clerk mentioned that the intent of the provisions was to regulate political financing, and as a result, the matter was best dealt with under the Canada Elections Act.

I'd just like to point out that there are measures in the current clause 99 that provide that a member is not to use any benefit from a trust for political purposes, but that's almost a secondary clause in clause 99. The main purpose of the clause is to require MPs to disclose all of their trusts and to require them to wind them up. The reason behind that is there's a perception that trusts are inherently problematic because they offer an opportunity for members to receive compensation and this compensation could lead to undue influence.

What this committee will have to consider, I guess, in determining whether to go through with this amendment, is whether the same policy rationale exists for candidates--whether, first of all, they can be subject to undue influence and whether it makes sense to also include candidates in the scheme.

Having said that, I think committee members should be aware of serious operational concerns that could be raised by placing this in the Canada Elections Act and by including candidates. Essentially what this would mean is that in the short period of an election, which can be as short as 36 days, the Chief Electoral Officer would have to receive statements from...in the last election there were over 1,600 candidates, so he would have to receive the statement of trust from 1,600 candidates. He would have to assess them and he would have to order candidates to terminate most of these trusts. Candidates would have to do so during the period of 36 days. As you are all aware, candidates are busy during an election period, and it would be a great imposition I think on a candidate to have to deal with their personal financial arrangements in the context of a 36-day election campaign.

I don't want to speak on behalf of the Chief Electoral Officer, but I believe it would be a concern for his office to have to process all of these disclosure statements from members in the short period of an election when Elections Canada is overwhelmed by other matters.

[Rob Moore, Conservative, Fundy Royal, NB]

Thanks. I guess that confirms some of my concerns with this. You've got all these candidates who could be running in an election, some of them without a hope of winning and certainly in no position to influence anything. They're a candidate; they're not in a position of power. I would think this provision could have the effect of keeping some people from even running in an election or in a nomination process, and I don't think that's what we want to do. We want to encourage participation in the democratic process. If someone is in no position whatsoever to have any influence, what could be the possible benefit of asking them to take these major financial steps? If they're perhaps in a riding where their party is going to get 2%, 3%, or 10%, they want to carry the flag in their riding, but they may not want to jump through these hoops that are set out.

I have one more question. If we're trying to eliminate undue influence or if we're trying to prevent someone from benefiting themselves, wouldn't that only apply in a case where someone was actually in a position of power, in a position to benefit themselves? I guess I don't see how a candidate for a political party would be in that position at all.

[Marc Chénier]

I think that's something for the committee to decide, whether there would be a policy goal to be achieved in putting in these, as you mention, severe consequences for a candidate having to run. They'll have to disclose all of their personal assets that are in trusts. The rule under the proposed amendment is to terminate all of these trusts unless they are set up by a family member, so any other personal trust would be terminated.

[Rob Moore, Conservative, Fundy Royal, NB]

Thanks. I just don't see the point. As a candidate, you're in absolutely no position to influence anything; you're out there trying to run a campaign. Of course, we're all governed by electoral financing laws, so what is the possible benefit to be gained by setting up what I would think would become a huge bureaucracy trying to manage these things?

[The Chair, Conservative, David Tilson]

We have Ms. Jennings, Mr. Poilievre, and then Madame Guay.

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

I'm perplexed at the anxiety my amendment appears to be raising among some of the members of this committee. I've been an elected officer, a member of Parliament, since June 2, 1997. I don't have any trust, and to my knowledge there's never been any trust fund set up for my benefit. I don't know of any other parliamentarian actually in office today who has a trust fund set up directly for their benefit. I am aware, and I believe it's public knowledge, that prior to the electoral financing act, Bill C-24, there were a number of parliamentarians in at least two parties, if not three, who did have trusts that were either set up by themselves or by others, and those, I understand, were all folded in under the electoral financing act.

As to the number of people who run as candidates in the general federal elections, and the fact that this amendment might overwhelm the Chief Electoral Officer, I do not believe the Chief Electoral Officer would be overwhelmed, because even if there were 3,000 candidates, I have not seen any evidence that all 3,000 candidates would in fact have a trust fund established in their benefit.

We already have to fill out a nomination ballet and collect signatures from registered voters in the riding; that's each and every person who wishes to run as a candidate and have their name on the ballot. There are also multiple reports that we each have to file, or our official agent has to file, and Elections Canada does quite well, and they know that if they require further resources to deal with any further authority or responsibilities that are given to them through changes to their statute, they will receive it.

That's the one interesting thing. The Chief Electoral Officer, to my knowledge, is the only parliamentary officer who has no limit on his or her budget under the act, and is able to go and get the increases that are required, precisely because one never knows when an election will be called. Even if this current government's legislation for fixed election dates carries, we still don't know, because there are all kinds of windows and doors open to allow whoever is the Prime Minister to call an election at any time, even though it claims to be in a fixed election date act.

So I come back to the point. I do not think the argument that the Chief Electoral Officer would be submerged under the authority that this particular amendment would provide him or her.... I think there are more than sufficient protections, including financial ones, to ensure that the Chief Electoral Officer has the resources required.

Secondly, I don't believe that this particular amendment, if it carries, is going to create a whole new cottage industry, because it is my understanding--unless a member of this committee has information otherwise--that the overwhelming majority, if not all, of the 308 members of Parliament and the 100-and-whatever senators do not have trust funds, the sole purpose of which is to benefit that parliamentarian, as a parliamentarian, or as a candidate in a future election.

[The Chair, Conservative, David Tilson]

We have Mr. Poilievre and then Madame Guay.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Can you describe the kinds of trusts that are covered under the existing provisions in the Accountability Act?

[Marc Chénier]

Right now, clause 99, which was pretty much included in the subamendment, requires that all trusts be included, so we're not just talking about trusts that were set up for political purposes to try to campaign. It includes personal trusts; so if your friend leaves you a testamentary trust or something like that, these would be included.

Madame Jennings is right that when Bill C-24 was adopted in 2003, it solved a lot of the problems that existed with political trusts. With Bill C-24, it became impossible for such a trust fund to be used to fund a candidate, because of the new contribution limits. Basically, an association would only have been able to donate $1,000 at the local level. So the trust funds that existed for political purposes and that had $100,000 in them couldn't be used anymore. In a lot of cases, we presumed they were terminated before Bill C-24 came into effect, and the money was transferred to the electoral district associations.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

So this deals primarily with personal trusts and other sorts of trusts that are not related to election campaigns, leadership campaigns, or any sort of political efforts?

[Marc Chénier]

Mr. Chair, that's correct.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Can you describe a few more? You said personal trusts, but can you elaborate?

[Marc Chénier]

Basically everything is included. They all have to be disclosed to the Ethics Commissioner, except for RRSPs and RESPs. The ones that must be terminated are all trust funds, except for those set up by a relative, and there's a definition of “relatives” in the clause.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Can you give me some examples of personal trust funds that would be banned?

[Marc Chénier]

As I mentioned, an example is a testamentary trust, so a trust set up by the will of a person who was not a relative. That would be included. It could include any trust set up by a non-relative, essentially.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Because you're worried that someone, for political reasons, could try to influence an elected representative by leaving them a trust, or providing them with..... That's what we're trying to get at in this is clause, is that not the case?

[Marc Chénier]

That was the purpose or intent behind the clause, to include all trusts.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

So basically what we're dealing with here is a proposed section that has very little to do with elections whatsoever. Ms. Jennings actually makes the government's point for it, in pointing out that political trusts are largely dealt with in Bill C-24, which has already been adopted.

This proposed Accountability Act, in this proposed section, is inclined to deal with personal trusts and other things that could be inclined to influence the behaviour of a member of Parliament. It is designed to eliminate trusts for MPs because they are inherently problematic, as they offer the opportunity for MPs to acquire secret compensation that could influence them in the performance of their duties. It is not the same as a political trust that is designed to run a campaign. That is why it's in the Parliament of Canada Act. Provisions like these have always been in the Parliament of Canada Act.

So it doesn't specifically deal with candidates; it deals specifically with elected representatives and avoiding the prospect that they might be influenced through a special personal trust that could be set up for them. So if you transfer this over to Elections Canada, what you are doing is you are then putting it under the rubric of the Chief Electoral Officer, who really has very little to do with the day-to-day accountability of members of Parliament and public office holders. You're also applying it then to all the candidates in an election, are you not?

For the record, I'm getting yes from the members of the panel.

[The Chair, Conservative, David Tilson]

Please indicate whether that's yes or no.

[Marc Chénier]

Yes, it is.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

So you would have candidates for political office saying they present themselves as independents, with very little chance of winning. They happen to have a trust that was passed on to them. It's perfectly legitimate, but it would not be legitimate if they held electoral office. They would have to dissolve that trust, even if they were never going to be elected, simply to put their name on the ballot, and that's not the purpose of the law. The purpose of the law is to get at people who are in office so that they do not accept personal trusts that amount to secret compensation in a way that could influence their conduct in the House of Commons.

So to take that and put it under the Canada Elections Act is totally illogical. It presents a whole series of legal challenges, because you'd have a section designed to deal with the accountability of members of Parliament who are elected finding itself in a section of the Canada Elections Act that has literally nothing to do with the provision that would be contained in it.

So with that, I respectfully offer my opposition to this amendment.

Thank you.

[The Chair, Conservative, David Tilson]

If you promise to be brief, a point of clarification, Ms. Jennings, ahead of Ms. Guay. We have about 10 minutes left and the bells--

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Yes, I simply wish to point out that under my amendment, if one looks at subsection 404.5.(1), it clearly states:

404.5 (1) Il est interdit à tout candidat ou député d'accepter, directement ou indirectement, un avantage ou un revenu provenant d'une fiducie établie en raison des fonctions qu'il exerce à ce titre.

In English:

404.5(1) No candidate or member may, directly or indirectly, accept any benefit or income from a trust established by reason of his or her position as a candidate or member.

So it would not cover trusts that one inherits or trusts that are set up by a family member from which one would benefit. It deals with trusts that are established by reason of his or her position.

And I would move the question.

[The Chair, Conservative, David Tilson]

We have a list.

You've got a point. I allowed you in here ahead of Ms. Guay, and Mr. Moore has a question.

I think I'd like to go to Madame Guay before you, Mr. Moore, unless--

[Rob Moore, Conservative, Fundy Royal, NB]

I have a point of order.