Procedure and House Affairs Committee on Oct. 17th, 2017

[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.

[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]

Thank you very much.

Dr. Leslie Seidle, you have 10 minutes for opening comments before we go to a round of questioning.

[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.

[The Chair, Liberal, Larry Bagnell]

Thank you, Mr. Seidle.

We have a seven-minute round, and that includes the questions and answers. Our first questioner will be Mr. Bittle.

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

Thank you so much. I'd like to thank the witnesses for appearing today.

I'd like to start with Monsieur Montigny. I'm wondering if you could expand your comments on why this would be detrimental to smaller parties. I know there are limitations within the legislation on smaller parties, but please expand on why, and share your thoughts on that.

[Eric Montigny]

As my colleague said, the opposition parties are actually trying to exercise power. But the burden on all the parties in terms of accountability or the number of fundraisers is quite significant. Time will tell, but the burden of the political parties may be very high.

In this context, smaller political parties, the ones with fewer resources or the least capacity for functional permanence, may have a greater burden in terms of the resources that must be allocated to accountability.

Nobody can be against transparency or electricity. That's for sure. However, and since we were talking about transparency, the bill aims to shed light on the funding of political parties.

My concern is that we are entering a dynamic where it will never be enough. We will always ask for more accountability. And the risk that organizers or activists who are acting in good faith will make mistakes will increase. I want to caution the committee about this.

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

I appreciate your comments, but is there the appropriate balance in this legislation? With respect, the legislation applies only to parties that have members in the House; then we're talking about only one individual member within the House who has to report.

I can understand the argument of the slippery slope, but isn't the balance achieved for other parties, if it's—?

[Eric Montigny]

There are inequalities or iniquities in terms of resources even in the parties represented in the House. It's normal in a political system. Not all parties, even if they are represented in the House, have the same degree of institutionalization, the same budgets or the same partisan bureaucracy to account for obligations.

My concern is rooted in a theory that was developed by Richard Katz and Peter Mair in the mid-1990s. It's the cartel party model.

When I analyze a bill, I wonder whether the parties represented in the House and the dominant parties in the National Assembly are introducing mechanisms in the electoral legislation that prevent new players from emerging or that make it more difficult and complicated for the development of parties that are minor now, but may become major in the future.

I hope my answer is adequate.

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

Thank you.

The acting Chief Electoral Officer indicated that he thought the bill struck the right balance in terms of which fundraising events were captured. This includes limiting which parties it applies to and instituting a minimum ticket price of $200.

Do these limits seem reasonable? That question is to both witnesses.

[Dr. Leslie Seidle]

I don't have any reason to disagree with his assessment. He has a lot of experience and has good people working for him, some of whom are my former colleagues.

I might add, in response to my colleague, and disagreeing somewhat, that I think the bigger hurdle for a political party is meeting the registration requirements. They've become considerably more supple over time as the result of a Supreme Court decision. It used to be that you had to field 50 candidates in order to have your registration come into effect at a general election.

If you're able to meet the requirements for reporting under the law once you become registered, it doesn't seem to me that adding this additional reporting requirement—bearing in mind that these are small parties that are not likely to be having a fundraising event every week or so—is something we should be overly concerned about. I think the potential benefit outweighs the potential discouragement to the further advancement of that party.

[Eric Montigny]

We have two different opinions. You have to decide.

[The Chair, Liberal, Larry Bagnell]

You have a minute and a half.

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

In terms of the major political parties that are represented here, and the main opposition leaders present at these events that are captured, do you think it's in the interest of the public that for those individuals their fundraising activities be captured? I’m speaking, for example, of the Leader of the Opposition and the leader of the NDP.

[Dr. Leslie Seidle]

I addressed that in my comments. I think it is entirely reasonable. I don't see why you would target only the governing party.

Let's say you were in a minority situation, which we were for almost a decade. Parties go in and out of government every 18 months or so. What they do in opposition—the people they speak with and so on—can make a difference when they get into power. I might say, although no one has raised it yet, that some people ask what kind of business can you actually do at a fundraiser when people are standing around with lukewarm glasses of white wine and maybe nibbling on some cheese that is handed around or maybe sitting on a table. There are limits to the kind of business you can do. However, you can have a quiet word with somebody and it can make a difference. We're a small country, and the connections that are established, even just the visibility of someone handing over his or her business card, for example, can make a difference.

When there are foreign business interests that want to develop whether old folks residences or other projects in Canada, it is quite legitimate that Canadians should know about this.

[Eric Montigny]

This time, I agree with my colleague.

We are talking about relationships of influence, and that's where the perception of a lobbyist registry comes into play. I repeat: if we want to solve the problem at the source, we have to think about lowering contribution thresholds. I'm not saying that it should be $100, as is the case in Quebec, which is quite low.

We need to think about access from the perspective of fairness: who has the means to participate in fundraising activities as citizens? The fairness principle is fundamental in an electoral legislation, at both the federal and provincial levels, as in Quebec.

[The Chair, Liberal, Larry Bagnell]

Thank you very much.

We'll now go to Mr. Nater.

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

Thank you, Mr. Chair.

Mr. Montigny, you said you were concerned that the bill would not apply during an election campaign. Could you give us the reason for that concern?

[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?

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

Thank you very much.

Dr. Seidle, you mentioned that you agree with Mr. Kingsley that the $1,000 fine isn't appropriate, that it's too low. Do you have a number in mind, or do you have a suggestion of what that should look like in terms of the fine?

[Dr. Leslie Seidle]

I don't want to tread in a field where I'm not trained, which is law. I would simply say that I think it should be higher. It should remain a fine. It shouldn't be moved into criminal offences under the Canada Elections Act.

It seems to me, as with the five-day notice, that it's almost sending a signal that we have to do this stuff, but let's not make it more difficult than necessary. This is different from election expenses. This is different from reporting on contributions. On the other hand, it's not unrelated to contributions. If it's meant to be a serious step forward, then this should be communicated in the terms of the bill.

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

Thank you.

You mentioned the five-day notice. We've had some discussion around this table with other witnesses about a situation in which five days' notice might be given or an event is long planned, but there's no specific speaker or attendee that would fit the bill. Then in a period of one or two days in advance of the event, the notice is amended to include the Prime Minister or a minister.

Do you have any thoughts on that provision? In a sense, it's getting around the five-day notice period by just confirming a special guest close to the date. Do you have any thoughts or concerns about that?

[Dr. Leslie Seidle]

You could do that with a longer notice. Let's say you have a 15- or 30-day notice. You can amend it. In fact, the bill is quite specific. I was surprised that it got into that level of detail, but the bill provides for updates. It didn't need to do that, because anybody who's organizing an event will, of course, update the notice. People are going to websites all the time for their information. They're not waiting to get letters in the mail and all that sort of thing. Notices are going up on Facebook.

I don't think the length of the notice should be tied to the fact that senior political people often have very unpredictable schedules. That can be accommodated.

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

So you're saying that, even if the Prime Minister or a minister isn't attending, the notice should nonetheless be given publicly, even if there isn't a guarantee that there is a designated office-holder attending?

[Dr. Leslie Seidle]

Yes.