Procedure and House Affairs Committee on May 5th, 2026

[The Chair, Liberal, Chris Bittle]

I call this meeting to order.

Welcome to meeting number 32 of the House of Commons Standing Committee on Procedure and House Affairs.

Pursuant to Standing Order 108(3), the committee is meeting for the first time on the study of Bill C-25, an act to amend the Canada Elections Act and to enact an act to change the names of certain electoral districts, 2026. We should probably come up with a better name than that, but I will leave that to everyone in the room.

Today's meeting is taking place in public in a hybrid format, pursuant to the Standing Orders. I would ask all in-person participants to consult the guidelines written on the cards on the table. These measures are in place to help prevent audio and feedback incidents and to protect the health and safety of all participants, especially our interpreters.

I'll make a few comments for the benefit of members. All comments should be addressed through the chair. For members in the room, raise your hand if you'd like to speak. I don't think anyone's on Zoom today.

Before we get to our witnesses, there is a draft budget to approve.

[Some hon. members]

Agreed.

[The Chair, Liberal, Chris Bittle]

It's approved.

I'd like to welcome our first panel, who will also be here for our second panel.

We have Cathy Hawara, assistant secretary to cabinet, machinery of government and democratic institutions; and Rachel Pereira, director, democratic institutions.

I understand you'll be making a brief opening statement, and then we'll go to questions from members.

Please go ahead.

[Cathy Hawara, Assistant Secretary to Cabinet, Machinery of Government and Democratic Institutions, Privy Council Office]

Thank you, Mr. Chair.

Thank you for inviting us to appear before this committee today to speak to Bill C‑25, which focuses on strong and free elections.

My name is Cathy Hawara. I'm the assistant secretary to cabinet responsible for the machinery of government and democratic institutions, and I'm pleased to be here today with Rachel Pereira, who is a director in the Privy Council Office's democratic institutions secretariat.

As the chair mentioned, the minister will be joining us at 12 this afternoon to speak to Bill C-25. Until then, we are very pleased to answer any questions that the members of the committee might have on the bill in advance of his appearance.

Mr. Chair, we're happy to take any questions.

[The Chair, Liberal, Chris Bittle]

Thank you so much.

We'll turn to Mr. Cooper, right off the bat, for six minutes, please.

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

I am going to ask some questions regarding third party financing. The bill seeks to close what are significant loopholes that allow for foreign funds to be used by third parties for regulated pre-election and election activities by requiring third parties to set up separate bank accounts for those activities and only use contributions from individual Canadians and permanent residents.

However, the bill provides an exception to this requirement. That exception is that if contributions received by the third party during the previous year are equal to or less than 10% of its revenue for that year, the third party may use its own funds. On what basis was this 10% threshold arrived at? Why 10%?

[Cathy Hawara]

I think it's important to start by noting that we do have an extremely rigorous political financing regime in place in Canada, and this is an attempt to ensure that it continues to be as robust as it can be. We took note of the recommendations that were made by the Chief Electoral Officer, which did point to the need for some ability for third parties to use their own funds under limited circumstances. We did not want to prevent third parties from using their own funds—

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

I understand that, but I wanted to know how the 10% figure was arrived at. I take it from your answer that it was based upon a recommendation of the Chief Electoral Officer.

[Cathy Hawara]

We did take that into consideration, yes.

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

The exception in the bill bases the 10% threshold on the third party's revenue from the previous year, that being the calendar year that precedes the calendar year of the pre-election period, or the fiscal year that precedes the pre-election period, whichever the third party chooses. Given that, how would contributions transferred to a third party in any year prior to the previous year be treated?

For example, if in the year prior to the previous year, the third party received 90% of its revenue from contributions, would those contributions be treated as part of the third party's own funds, which could then be used for regulated pre-election and election activities?

[Rachel Pereira, Director, Democratic Institutions, Privy Council Office]

Thank you for the question.

We can return to you with the details of that, but under Bill C-25 requirements, third parties will need to identify contributions made by Canadians and permanent residents, knowing that once the bill has passed, they will need to record the name, address, date and amount of those contributions that were received in order to use them for regulated activities.

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

That is the case if the exception doesn't apply. I want to know whether, in the year prior to the previous year, funds are melded, because if those funds are melded, if the third party can use those monies as part of its own funds, then what would remain is a loophole that would allow for, among other things, foreign funds.

[Rachel Pereira]

Yes, that is the challenge currently. There is a transparency gap, as you point out, where third parties can receive funding from other sources, and it will look as though it is part of their general revenue. This measure aims to address that going forward.

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

Will you undertake to specifically answer that question?

[Rachel Pereira]

Yes, I will confirm that for monies that were collected previous to the year before the election.

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

The previous year....

[Rachel Pereira]

Yes.

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

You may not have an answer, so if you don't have an answer to the next question, then I'd ask you to undertake the same.

Under the exception, if 10% or less of a third party's revenue came from contributions in the previous year, hence the threshold applying, would those contributions be treated as melded and, therefore, could be used by the third party for regulated activities?

Just to be clear, the threshold would apply and contributions were made in the previous year, but the amount of those contributions is 10% or less.

[Rachel Pereira]

Concerning the threshold for using own funds, own funds are monies excluding contributions, so they are the revenues generated by the third party. They could use their own funds for regulated activities. If they meet that threshold of 10% or less received in contributions, they would then be able to calculate the use of their own funds minus the contributions received.

[Michael Cooper, Conservative, St. Albert—Sturgeon River, AB]

Money is fungible. How would that work exactly?

[Rachel Pereira]

I'll walk you through for the threshold.

Third parties under the bill will only be able to use contributions from Canadians and permanent residents for regulated activities. They will need to report on those, of course. They will be able to use their own funds—those are funds not received from Canadians or permanent residents, for example, selling merchandise, their other business lines, etc.—if all those contributions do not exceed 10% of their overall revenues in the previous year, as you've noted.

If I meet that limit, if I'm a third party and I have, let's say, $1,000 in contributions and the overall funds that I have are $9,000 of my own revenue, for donations at 10% of my overall income, which was the $9,000, that $1,000 is 10%, so then I would be able to use my own funds because I meet that threshold.

[The Chair, Liberal, Chris Bittle]

Thank you so much.

We'll now go to Mr. Louis for six minutes, please.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Chair.

I want to thank Ms. Hawara and Ms. Pereira for being here and sharing your time and your expertise.

Bill C-25, the strong and free elections act, reflects a simple but essential principle that democracy must be both open and secure. Canada's electoral system is among the most trusted in the world, but trust is not static. It must be actively protected as threats evolve, so this bill, I believe, responds directly to recommendations from the public inquiry into foreign interference, the Chief Electoral Officer and the commissioner of Canada elections, who we'll be hearing from subsequently. It addresses real and emerging risks, foreign interference, disinformation, deepfakes, dark money, cyber-threats and physical intimidation without compromising freedom of expression, political participation or legitimate debate.

We're here in committee to discuss the scope of the bill, that it be targeted and proportional but, at the same time, preserve openness and accessibility to serious candidates, parties and voters.

Can either of you share with me some of the safeguards that the bill has that would ensure it captures only intentional, harmful conduct and not possibly a good-faith disagreement or error.

[Cathy Hawara]

Thank you for the question.

There are a number of examples in the bill that highlight the kind of balance we're trying to strike between closing gaps to address threats that we know are present and need to be responded to and, at the same time, ensuring that honest mistakes are not unduly addressed.

One example is the new provision in relation to false information. We are trying to be very targeted in this measure, ensuring that we are responding to the most critical and real potential threats, such as false information about who can vote, how voting is conducted and so on, which could potentially harm the integrity of our system. The measure, however, is quite targeted. It needs to be clear about the intention that the individual has, and it's very clear that they need to know that the information is misleading.

At the same time, if we look at some of the measures we're proposing from an enforcement perspective, we're expanding the number of contraventions that can be dealt with as violations of the act under the administrative monetary penalty regime. This provides the commissioner with greater flexibility to determine whether a violation of the act that is unintentional can be dealt with through the AMP regime, through administrative investigations and through tools like compliance agreements, letters of education, etc., so that we can again better target the compliance and enforcement activities of the commissioner.

You find this throughout the act where we are trying to strike that balance between closing the gaps and addressing the threats that are real, at the same time as we ensure that the commissioner and Chief Electoral Officer are taking a proportionate approach to the administration of the act.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you. I think people want to know that there's a high “intent threshold” set, and that seems to be what you're explaining.

In the Elections Canada public inquiry into foreign interference, gaps were identified. Some of them had to do with election interference and computer-system tampering. Are there measures in there that will address some of the issues that were brought up by Elections Canada's public inquiry into foreign interference?