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Posts Tagged ‘Elections Act’

Last-minute, longer election campaign: “Cunning” or just cowardly?

July 27th, 2015 | 9 Comments

[Originally published on July 15, 2015 at NationalNewswatch.com]

The morning after he had won the last federal election, Stephen Harper was asked how people fearing a Conservative majority government could be re-assured.

"One of the things I've learned is that surprises are not generally well received by the public," he replied.*

That's why the Prime Minister sought a mandate during the last election to eliminate the per-vote subsidies for registered federal political parties who met the vote-share threshold. He won a majority government in that election, and therein obtained a mandate to proceed with that policy.

As had been recommended by Tom Flanagan several years earlier, the PM and his Finance Minister Jim Flaherty proposed that the measure be phased in over three years, in order to give the other political parties time to adjust.

"That's what elections are all about. We made it very clear in the platform that we would do this. But we would do it phased in over the next several years, and that's what the amended budget will provide. Exactly as we had it set out in the platform. There will be no surprises," Flaherty told the CBC in a pre-budget interview in May of 2011.

So, the parties have had four years to plan, fundraise and save the money required to wage a five-week election campaign, based on a five-week spending limit, taking into account the declining value of the now-eliminated per-vote subsidy.

But here, at the last minute, you want to surprise the parties with a doubly-long election campaign, that will cost them double the money to run? Based on a hidden provision in a humongous bill, that was dropped as a surprise on the opposition, with little time for advanced study, detailed consideration, or reasoned debate?

And you want to call yourselves "cunning", in a trial-balloon so obviously floated in the National Post?

How about "cowardly"?

That's what you'd call someone who could only win by tying their opponents' hands behind their backs.

Who would be prepared to so sully the public interest of our democracy and its citizens to have a real choice, that no basic sense of fair play were too sacrosanct to violate, nor base partisan interest too small to elevate above the greater good.

An election is the highest form of expression of our citizenship, not a sneak attack where you surprise your opponents while they're sleeping and slaughter them all before dawn.

That is not the way a wise and brave leader is called on to behave.

Prime Minister, you and I worked down the hall from one another decades ago, so I say this to you directly: You are capable of winning an election on the merits of your ideas, the strength of your intellect and your ability to persuade. And yes, through the superior organization the party you built has assembled through its admirable work ethic and obvious dedication.

What you don't need to do is cheapen that victory by nuking your opponents into the stone age. That's the coward's way, not the warrior's way.

And moreover, it might backfire. Because, as you once observed, Canadians don't like surprises.

————————

Alice Funke is the publisher of cá độ bóng đá trên điện thoại www.diretoriorestaurantes.com. She first reported on the implications of the new pro-rated election campaign spending limits on her blog, and later on for Macleans.ca. She worked on 7th floor Confed in the late 1980s and early 1990s, at the same time as Stephen Harper.

* as transcribed in Paul Wells’s The Longer I'm Prime Minister (p.349)

UPDATED: Why a new Québec-based party is running in the Peterborough by-election, and other unintended consequences of sloppy law-making

July 1st, 2015 | 17 Comments

The law of unintended consequences is getting quite a workout with these – legally necessary – but otherwise totally pointless federal by-elections.

[Welcome, National Newswatch readers!]

The fact they weren't called long ago, but now have to be called this close to a fixed election date, the fact that the spending limits are obscenely huge because of the long writ and the new pro-rated ceilings, the side effects on the pre-writ activities of political parties and the so-called third parties — none of these outcomes were anticipated by the parliamentarians charged with studying the various bills amending the Elections Act, which were characteristically rammed through Parliament by the out-going government, without taking much if any advice from our internationally-recognized independent election adminstration body, Elections Canada, nor meaningfully consulting the other political parties.

Certainly the interplay between the local candidates' by-election expense limits, the national parties' by-election expense limits, and the absence of pre-writ spending or registration restrictions was largely unanticipated when the bills were adopted. But it explains why, to date, no Conservative candidate has been formally nominated with the Returning Officers in the new ridings, a development first reported by the Ottawa Citizen's Glen McGregor the other week. No New Democrat has been registered either as yet.

It's true the candidates were already nominated by their riding associations (or in the case of the Conservative in Peterborough, will be at the contested nomination scheduled for July 14) and are already campaigning for the general election.

But to get your name on the ballot, access voters lists, and start spending potentially rebateable dollars under the by-election expense ceiling, you need to complete the second step, which is to get formally nominated with the local Returning Officer. In the eyes of the law, you are not a candidate until you complete that step. Spending limits for parties in by-elections don't kick in either until they endorse one or more candidates in the by-election ridings.

Registering and getting formally nominated as a candidate, in a by-election that will never be held, is pointless if you don't want to be constrained by spending limits and you don't care if your pre-writ expenditures are rebated.

More importantly, it would hurt your party if they wanted to run national ads pre-writ, because for any ads in media markets reaching the by-election ridings – Peterborough, Ottawa West-Nepean and Sudbury in Ontario – the cost of airing those ads PLUS their entire production costs would have to be included under the expense ceilings. Which would put quite a damper on the Conservative Party's pre-election advertising plans.

But by keeping their candidates OUT of the by-elections, the Conservatives have instead opened themselves up to unfettered advertising by any outside group urging their party's defeat.

Just as a candidate is not a candidate under the law until nominated with the Returning Officer, a third party is not a third party under the law until its activities fall under the Act. If a group that was not a political party advertises in favour of the election of one candidate or political party, it becomes a third party and falls under the Act. If that group advertises against the election of a candidate or political party it also becomes a third party and falls under the Act as well.

But if a group only advertises against the election of someone who is NOT currently a candidate under the Act (ie, someone who is nominated by their party for the general election, but not nominated with the Returning Officer for the by-election) or only against that candidate's political party, then they are not a third party under the Act either. Meaning no registration with Elections Canada, no expense ceilings, and no financial disclosure reports are required of them.

So, now we realize there's a strategic choice involved in a political party deciding whether or not to nominate its candidates for the pointless by-elections currently in progress:

  • Option A – my party wants maximum latitude to conduct pre-election advertising and can afford to spend unrebated dollars locally, and that is a more important strategic consideration than avoiding negative attacks by third party advertisements: therefore don't register by-election candidates
  • Option B – my party would like to restrict third party attacks against us and our candidates, and that's a more important strategic consideration than being able to spend without limit on pre-writ ads: therefore DO register by-election candidates. Bonus: there is probably no way our candidates will be able to spend the by-election ceiling locally, but at least all of that spending will be subject to a 60% rebate

The Conservatives seem to be choosing Option A, while the Liberals – who have registered by-election candidates in both Peterborough and Sudbury – have chosen Option B. I haven't seen any NDP pre-election TV ads in the Ottawa area myself, but then they haven't registered any by-election candidates to date either, so the jury's out on which Option they are picking or are just agnostic on the whole matter.

Working Canadians, the CFIB-linked third party, has been running anti-Trudeau radio ads in parts of the country, but would not be able to do so in the radio markets reaching the three by-election ridings unless it was to be subject to the expense limit for third parties (which again includes all production costs as well as the market value of the buy). Engage Canada, the group formed by former Liberal and NDP operatives, has been running anti-Conservative TV ads in parts of the country, and I've definitely seen them on national channels that reach Ottawa.

The short-lived "HarperPAC", which seemed to have been quickly struck (one of the members was until last month the Attorney General of Alberta) and poorly thought through, disbanded within a week of announcing its formation, in the wake of criticism by Conservative Party spox Kory Teneyke. It had a radio ad attacking Liberal leader Justin Trudeau for something trivial that had happened in the news the day before or something, which did not seem to have been researched or focus-group'ed at all. The bigger problem for the HarperPAC – as reported by Ricochet.media – is that by attacking the Liberals it would have been a third party for the by-elections under the law, but would not have been eligible to register as a third party because its name sounded too much like the name of a political party or candidate, which is forbidden under the Elections Act. Like I said: amateur hour, and best put out of its misery as quickly as possible.

So, we understand the strategic options for the major political parties in registering or not registering by-election candidates, and what the implications are for outside groups wanting to advertise pre-writ.

But why then would a brand new, tiny, Québec-based indépendentiste party want to nominate a candidate in a federal by-election in an Ontario riding?

UPDATE: I'm being questioned on my assertion that Forces et Democratie is an independentiste party. It's leader and co-founder is an independentiste and previously ran for the leadership of the Bloc Québécois, but the party's vision does not specify any such national project, but rather deference of central governments to the regions of the province of Quebec.]

It makes no sense, right, unless you understand another part of the Elections Act which governs the registration of new political parties.

If you want to form a new federal political party, you have to meet a number of governance requirements (threshold of paid up members, party leader in place, financial officer, auditors, etc), and once that's done the Chief Electoral Officer declares that your party is "eligible for registration". You have certain rights and responsibilities under the Act, but the thing you cannot do until you're actually registered is issue tax receipts for political contributions. If it weren't that way, anyone and her sister could just create a political party and start fundraising for taxpayer supported dollars, but political parties play a critical role in our electoral system as the chief recruiters and funders of candidates for elected office, which shouldn't diluted by any old huckster or flying yogi.

In fact, eligible parties who are not yet registered parties have to specifically remind potential contributors that their contributions will not be eligible for a tax receipt (see highlighted section on the screencap from F-and-D website below).

Screen capture of the Forces et Démocratie website donation page, July 1, 2015

Can you guess yet what's the critical step for moving from eligibility for registration as a political party to actual registration? That's right: you have to successfully nominate one candidate for one electoral event. And for Forces et Démocratie, the newly-formed Québec-based indépendentiste party founded by an ex-Bloc MP and an ex-NDP MP, their new hero is Trent University masters student Toban Leckie.

By getting nominated for this Ontario federal by-election, Leckie will be permitting Forces et Démocratie to soon start raising taxpayer supported political contributions, rather than waiting until their first general election nomination in September. I don't know if he realized this himself, or if so whether he informed the 100 or so signatories he'll need to get on his nomination papers that they'll be enabling not just his own quixotic candidacy in a by-election that will never be held, but the ability of a brand new political party whose main focus is Québec to significantly improve its fundraising position pre-election.

Don't get me wrong here: I'm not Québec bashing, I'm not separatist bashing, and I'm not even criticizing F-and-D for doing what they're doing, nor any of the other actors in this entire by-election mess. Everyone is behaving perfectly legally, given the complete hash Parliament has made of our Elections laws recently. Another of the "eligible political parties", "The Bridge Party" has also used the same provision of the Act to nominate Karim Rizkallah in Ottawa West-Nepean.

And I'm not saying it's job one for a new government to kick off a better process to fix this all, but it's surely in the top 100. Because the constant gaming of the system, the constant ramming of bills through Parliament without consideration of their constitutionality or practicality, is what's responsible for the current completely farcical mess.

If you support a fixed election date, think through what ALL the implications of that are. If you want pro-rated expense limits for longer writs, consider whether there should be any limits to them or the writ length at all. If you want to control political party, government, and third party advertising and promote transparency in the pre-election period, think that through as well. There is also a looming crisis in political finance after the next election, since most parties have been unable to fully replace the per-vote subsidy in their fundraising efforts, but could now face election campaigns with unknown and unknowable expense ceilings, given the new pro-rating of the spending limits. It would not surprise me at all if that was in part the motivation for a group like Engage Canada to intercede and try to prevent the re-election of a Conservative majority government, which would soon have no adequately-financed opposition at all.

If it were not a third rail in politics these days to suggest another Royal Commission on Electoral Reform and Party Finance, I would say it might almost be called for: to maintain our distinctive Canadian democracy, and avoid the worst pitfalls of the US permanent campaign. At the very least, amendments to the Elections Act should receive far more attention and study from Parliamentarians than they are now.

Happy Canada Day, everyone.

Federal by-elections will be all paperwork, no voting day, plus huge expense ceilings

May 3rd, 2015 | 7 Comments

[Welcome, National Newswatch readers!]

Pointing to the need for a couple of common sense amendments to the Canada Elections Act, the three currently vacant House of Commons seats will be undergoing by-election campaigns from now until the writs for forthcoming general election are issued sometime in the early fall.

Wednesday would have been the last day to call the federal by-election for the Peterborough, ON seat that former Conservative-turned-Independent MP Dean Del Mastro resigned tearfully six months ago after first being found guilty of charges under the Elections Act. So the PM called by-elections Sunday for the fixed general election date of October 19, in all three vacant seats: Peterborough, Sudbury (which was vacated by Ontario Liberal convert Glenn Thibeault), and Ottawa West-Nepean (open after the early retirement of John Baird).

But one of the consequences Parliament ought to have considered, when adopting our federal fixed election date law, was the impact on by-election call requirements. Right now, a by-election must be called within six months of a vacancy, no ifs ands or buts, but there is no limit on the length of the campaign. This is why the by-election had to be called in Peterborough now and the other two in coming months, but the writ was able to be so long as to take us all the way into the general election this fall.

Yet, if a vacancy occurs within nine months of the fixed election, is this really necessary? It creates an unnecessary expense and more administrative tasks than you might think, and accomplishes perhaps very little in the end. It would be one thing if we required all by-elections to be called automatically within a month of a vacancy, a position that has a LOT of merit in my opinion. But given our current six-month-to-call requirement, and a potentially endless writ, calling a by-election seems pointless.

Instead, the Prime Minister is obligated to call at least the Peterborough by-election now, and Sudbury shortly, so why not throw in Ottawa West-Nepean into the mix. And once that happens, under the Elections Act, Elections Canada *has to* ramp up all the machinery and work-plans necessary to run a by-election in each of those three ridings (note: on the OLD boundaries, too), as do the parties and candidates.

This has happened before: for example, when Jean Chrétien appointed then-Liberal MP Mac Harb to the Senate, it opened up a by-election in Ottawa Centre that went on for a long time, but got superseded by the 2004 general election. Four years later, the current Prime Minister called four federal by-elections in the summer of 2008 in a set of three Liberal seats that had been opened to allow new blood into their caucus, plus a Bloc seat freed up by an MP who got elected provincially. But, according to Paul Wells' reporting at the time, when it started to look like the NDP's Anne Lagacé Dowson would beat the Liberals in Westmount-Ville Marie, the PM decided to call a general election instead. All four by-elections were cancelled and rolled into the general.

Now, just because the current set of by-elections will be cancelled in the end, it doesn't mean that parties and candidates won't be subject to Elections Act provisions while they're on-going, starting right now. Candidates will need to be nominated with the Returning Officer, which involves obtaining signatures and securing an Official Agent and Auditor. And *no* EDA or candidate spending can take place in those ridings until that's been done, plus all contributions and all spending will be subject to expenditure ceilings and reporting to Elections Canada after the fact. In fact, if you check and see at the Elections Canada website, you can find election returns from those aborted September 2008 by-elections.

Also, Elections Canada will have to open and staff local Returning Offices early, conduct any special enumerations, advertise about the by-election, prepare the list of electors and so forth. Moreover, so-called third parties wanting to advocate a vote in favour or against a candidate or party in that riding through advertising, will have to register and report their contributions and expenditures under the Act as well. Everyone in those ridings will be subject to those Elections Act provisions, starting now.

Given the experience in 2008, some amendments were made to the Elections Act already about what should happen when a by-election was superseded. Previously everything had to be shut down and transferred to central party campaigns, and independent candidates were particularly harmed because they had to shut down their campaigns and start over completely from scratch, which everyone agreed was unfair. Again, if you look at who was nominated in those by-elections, and who survived into the federal general election, very few of the independents were able to carry over.

But financially these by-elections will be different from those 2008 ones in one other very important way as well, because of amendments made in the so-called "Fair" Elections Act amendments which came into effect this past December. These were the changes made to the expense ceilings – which I mentioned before – such that the limits would increase proportionately with the length of a writ. Right now, the spending limit for each riding will be calculated based on the number of electors, times the inflation multiplier, but then augmented by 1/37th of that amount for every single day beyond 37 days. With today's by-election call, we're at 169 days until October 19, so that's a spending limit of four-and-a-half times (169/37) what it would have been before.

That's right: an expense ceiling of around $400,000 per candidate, all of which can be spent before the writ for the general election is issued, all rebatable at 60%, and that's not counting the central party limits for the by-election ridings either. Say four candidates per riding, over three ridings, and you're looking at $6 million dollars in allowable, rebatable candidate election expenses. And then, once the general election is called and the by-elections are cancelled, the meter resets all over again, making for a ceiling of up to half a million dollars per candidate if you could raise and spend it all.

This is crazy. For one thing, the parties should get on the phone with one another Monday morning, and agree not to get into such a crazy arms race for nothing, for example by agreeing to a spending ceasefire until the general election writ is issued.

For another, the next Parliament had better sort out the rules on the calling of by-elections. No more gaming out the calls by the Prime Minister. If a vacancy occurs, the Act should be amended to authorize the Chief Electoral Officer him- or herself to set a by-election date within a month (as is currently done in the UK and other places), and give a teeny bit of discretion to work around holidays and religious holidays. Of course this will in turn cause MPs to reconsider and game out their retirement dates a bit too, but that's an acceptable trade-off to me.

On the other hand, if we are stuck with the PM picking a time to call by-elections, between 11 and 180 days after the vacancy is reported to the Chief Electoral Officer, as is currently the case, then two amendments need to be made to the Act:

  1. If a seat becomes vacant in the same calendar year as the fixed election date is scheduled to occur, it must be called within a month, or if it occurs within six months of the fixed election date, not called at all.
  2. There HAS to be a maximum length set for an election campaign, if spending limits are set to increase proportionately with the length.

For the record, the 2011 expense ceilings in each riding were as follows:

  • Peterborough – $95,208
  • Sudbury – $84,346
  • Ottawa West-Nepean – $88,802

Multiple them each by 169/37 to get the approximate current by-election limits. Then add in a whole other general election's worth of permitted spending on top of that. Multiply by the number of candidates likely to spend the limit. That is one whole helluva lot of campaign spending just to go through the motions of trying to replace 3 MPs for nothing.

Obviously the Act needs to be amended; and maybe next time the government will allow the Commons and Standing Committee to take the time to study all the provisions and implications properly. Oh well, we can always dream.

Re-up-UPDATED: How a little-noticed clause in the Fair Elections Act up-ends all conventional election timing speculation

January 15th, 2015 | 41 Comments

[Welcome, National Newswatch readers!]

UPDATE: See below for two points of clarification – on the indexation of third-party spending limits, and the scope of the limitation on fundraising cost exemptions.

RE-UPDATE: [Feb 2, 2015] On further examination of the legislation, Elections Canada lawyers believe the daily pro-rated value of the central and candidate expense limits should be increased by 1/36th for every day the writ period exceeds 37 days, not 1/37th.

Re-Up-UPDATE: [moments later] Never mind; 1/37th is the correct amount of the daily pro-rate. Mea culpa.

Anyone still debating the question of an early election date, versus a fall election date as planned, is completely missing the point. The question nowadays – thanks to a little-noticed amendment buried in the Fair Elections Act –  is not what day the election will be held. It's what day the election will be called.

Until now, most of the conventional wisdom has sounded a lot like the unnamed Liberal source quoted by Paul Wells the other day:

“They’ve got $40 million to spend,” my Liberal source said of his Conservative foes, who are still winning each quarter’s fundraising competition. “They can only spend $25 or $26 million in a writ,” that is, during a formal campaign period, because Elections Canada monitors these things closely. “Why would they go now?”

The reason it sounded that way is because – until now – such a calculation would have been right.

It depended on the fact that, while there was no legal limit on the length of the writ period, there was a hard limit on how much could be spent during an election campaign, regardless of its length.

A fixed expense ceiling, but no fixed length to the campaign. That was the system we used to have. Then we added a fixed end to the campaign period in the Accountability Act, but no fixed beginning. Still, the fixed expense ceiling served as a financial incentive not to drag it out too long, and keep the campaign affordable enough for every party to be on the same level playing field – at least during the writ period. If, as they say, "campaigns matter", then at least there was reasonably affordable parity for serious entrants during the period that mattered.

But the fixed expense ceiling was ended in the Bill C-23 (Fair Elections Act), as part of its massive rewrite of "Part 18 – Financial Administration" of the Canada Elections Act. The version adopted by Parliament is now published as Chapter 12 of the 2014 Statutes of Canada, and although its provisions haven't been consolidated into the online version of the Act yet, they did come into force on December 19, 2014. Here's the relevant section:

Maximum Election Expenses

430. (1) The maximum amount that is allowed for election expenses of a registered party for an election is the product of

(a) $0.735 multiplied by the number of names on the preliminary lists of electors for electoral districts in which the registered party has endorsed a candidate or by the number of names on the revised lists of electors for those electoral districts, whichever is greater, and

(b) the inflation adjustment factor published by the Chief Electoral Officer under section 384 that is in effect on the date of the issue of the writ or writs for the election.

Election period longer than 37 days

(2) If an election period is longer than 37 days, then the maximum amount calculated under subsaection (1) is increased by adding to it the product of

(a) one thirty-seventh of the maximum amount calculated under subsection (1), and

(b) the number of days in the election period minus 37.

A campaign has to be a minimum of 37 days – the day it's called plus 36 more. But it has no maximum length. So, in the olden days, you would have to take the campaign expense ceiling and make it last the length of the campaign, which meant that for well-funded parties with control over the election calendar, they'd delay the dropping of the writ as long as possible, and outspend in the pre-writ period trying to lay down the campaign narrative and define their opponents, knowing their less well-funded opponents had to keep their powder dry for the campaign whenever it came.

The extra-long campaign that spanned the Christmas holidays in 2005-2006, however, really stretched some parties' budgets. The need to make a fixed campaign budget last for a longer campaign led to a lot of the improvising that resulted in so-called In-and-Out scandal.

So naturally, the thinking would go, if you had a longer campaign you ought to be able to have a higher spending limit, right?

Except that having an unlimited pro-rated election campaign expense ceiling – without a limited campaign period – opens a huge back-door for a well-financed political party that controls the timing of an election to spend its opponents into the ground.

Setting a fixed election date in legislation was supposed to equalize the power over election timing between the government and the opposition. Everyone would know when the election was, and could plan accordingly. It didn't matter that no fixed beginning was set down in law, because the fixed election spending ceiling would keep the campaign relatively short.

But now, what's to stop the Prime Minister from calling the election on July 1st for October 19th? "Under the Canada Elections Act, nothing" replies Elections Canada spokesperson John Enright. "And the expense limits for parties and candidates would be pro-rated 1/37th per day for each extra day."

Wrap your mind around the implications of that one for a minute or two.

Suppose the national party's expense ceiling for a 37-day campaign works out to $26 million, as realistically ball-parked by Wells's source. The new provisions in the Elections Act mean that for every day longer than 37 days the writ lasts, the spending limit goes up by roughly $700,000.

For every extra week, then, it would increase by $4.9M.

An extra month? Add on another $21M.

Tack on the whole summer, for argument's sake, and suddenly you're looking at a 110 day campaign with a national expense ceiling of $77 million dollars to be competitive. Spending at those levels, given Canada's restrictive fundraising laws, is no longer an equalizer – it's a blunt instrument to beat your opponents to death and into bankruptcy with, and would leave the bankers to decide which of the government's foes to finance to the max to try and compete even remotely fairly.

And that would not even be the real limit, because the Act also exempted fundraising costs from the ceiling, and you can pack an awful lot of messaging and voter contact into fundraising, as anyone on the year-end party email lists could attest. [UPDATE: That was wrong. It exempts the costs of running a fundraising activity like a cocktail party, but the provision on telephone/email etc solicitation for funds was dropped.] (Not a lot of serious policy gets discussed, however, adding to cá độ bóng đá trên điện thoại the woes already identified by Chantal Hébert). And there would be no requirement to spread that spending out over the entire campaign period – instead you could just hold your fire and then dump millions and millions of dollars more in advertising into the final 3 weeks.

With $40M on hand – and remember that the Fair Elections Act did not impose any limits on the 50% rebate of those paid election expenses either – the Conservatives could now leverage that $40M with bank loans of a further $40M (secured by their rebate) to spend the limit, and still have money left over to transfer to their candidate campaigns  … who now would also have to cope with expense ceilings of three times their previous amounts. In other words, the typical candidate spending limit of $80K would in that hypothetical situation become nearly a quarter of a million dollars

And those candidates would have a much harder time than the parties to secure financing for the difference, thanks to the ridiculous and unworkable loan provisions also written into the Bill against the advice of such wild-eyes radicals as the Canadian Bankers' Association, who would have to administer them. The new regime requires bank loans to be guaranteed by a consortium of individuals each guaranteeing no more than their annual contribution ceiling MINUS the amount they'd already actually contributed in cash. No bank or credit union wants to issue a loan for $45,000 guaranteed by 30 people for $1,500 each. Not going to happen. So, if the riding association didn't already have most of the limit banked ahead of time, their candidate would be put impossibly behind the 8-ball in a mega-length campaign.

Now, there would be some down-sides to a mega-long election campaign from the governing party's perspective. For one thing, once a writ drops, most government advertising would have to cease, and most government-funded ministerial travel along with it. Cabinet ministers still managing complex, sensitive or risky portfolios (defence, security, or anything to do with financial markets or the price of energy are some contemporary examples) might have their attention impossibly distracted from either their role or their re-election. It would blow a huge hole into Elections Canada's own election budget, so I suppose there could be some public backlash as well, though the bet would be on it dissipating after a day or two. And long campaigns can be risky for incumbents.

But they're just as risky for challengers, especially ones who haven't personally experienced the pressure-cooker of a national campaign before. And the challenge of suddenly needing to raise and spend three times what you'd planned on might be insurmountable. Plus, Auditors-General don't usually release reports during election campaigns; just sayin'.

A final wrinkle is that the so-called "third parties" – groups who are not registered political parties, but who want to advertise during the election campaign, did NOT have their ceilings pro-rated. So, each group will have a hard $150K ceiling to work with for the entire writ period nationally, plus $3000 for any riding it wants to specifically advertise about, no matter how long or short the campaign. I expect a number of third parties – LeadNow.ca for example, or the pro-pipeline groups – have planned more expensive pre-writ ad campaigns that are not subject to those ceilings. But if the writ were issued early, all those ad buys would have to stop in their tracks. [UPDATE: of course those third party spending limits spelled out in the Act are at least subject to the inflation adjustment, so the Third Party national limit, for example is now over $200K.]

We'll get an early taste of what's to come with the required launch of the Peterborough by-election, which must be called by May 6. It has to be called by May 6, but the only restriction on voting day is that it be on a Monday at least 36 days after May 6. The first Monday at least 36 days after May 6 is June 15, but the Prime Minister could do what was done in Ottawa Centre before, which was to call an early by-election that then got folded into the general election campaign. This means the candidates in Peterborough should now expect to have to spend 4 1/2 times the old spending limit to get from May 6 to October 19. Same goes, though at a slightly lesser rate, for candidates in Sudbury (although notably, the Chief Electoral Officer still has not been notified by the Commons Speaker of Glenn Thibeault's January 5th resignation, so the clock hasn't started ticking on that riding's federal by-election just yet).

How the parties come out of this election financially will be critical to the future health of our democracy. Justin Trudeau has already signalled that he intends to turn his back on Jean Chretien's election reform of the per-vote subsidy. And unless any one party wins a majority of the 338 seats in the next House of Commons, the country could be back into an election again in 2017.

A democracy without a robust party system is a prime takeover target for monied interests. This is why all citizens should care so deeply about the fairness of elections. It sounds like it's all just dickering over inside baseball by party insiders, but it isn't. The political parties are the (for the most part, voluntary) bodies who identify, recruit, train and finance the candidates we all get to choose between on the ballot. Take away their level playing field, and you are only an election or two away from losing any real effective choice for yourself on that ballot.

Just because the Prime Minister could in theory call an election for the fixed election date early and spend his opponents into the ground, doesn't meant that he should, or would. A true leader is marked not only by his actions, but also his restraint and wisdom. Even though we fully expect the PM to vigourously contest the next election, he is no doubt also mindful of the fact that he's heading into the legacy stage of his reign.

For myself, I think the next Parliament should amend the Canada Elections Act again, to set a maximum length alongside the minimum length for a federal general election campaign period, and I hope to see that plank in one or more of the parties' election platforms.

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As for all the #TeamSpring vs #TeamFall nonsense, I cannot bring myself to believe that the federal Conservatives would want to run an election campaign concurrently with either or both of the expected Alberta provincial election (mid-March call for a mid-April vote is the prevailing wisdom), or the Ontario Progressive Conservative leadership contest which concludes the first weekend of May.

I also remember how all the expected fuss over the tell-all book by Julie Couillard on Maxime Bernier in during the 2008 election campaign amounted in the end to nothing more than a half-day story at most, so I think the potential impact of Senator Duffy's trial is being highly-overrated by people who spend too much time living and breathing the Ottawa narrative.

Everyone I've spoken to who's in a position to know, or who knows someone in a position to know, says that the next federal general election will be held on Monday, October 19, 2015 as stipulated in the Canada Elections Act. Until now, however, no-one's thought to ask them when it will be called. Hopefully that can be rectified soon.

Behind the Headlines on the NDP Convention Sponsorships Issue

August 27th, 2012 | 11 Comments

[Welcome, National Newswatch readers!]

The NDP's communications plan to handle the situation arising from their disagreement with Elections Canada over convention advertising by 8 unions and 7 other organizations is an interesting study in contrasts as against the Conservative Party's approach in the past.

It might be that the former views itself as having a greater interest in maintaining a neutral election arbiter willing to muscularly enforce a common set of rules even-handedly, while the latter has been able to fundraise effectively based on stoking the fear that the election authority was part of a liberal monolith in Ottawa where conservatives felt like outsiders.

Or it could just be that the NDP did a cost-benefit analysis, and learning from the Conservatives' experience, decided that the legal fees and on-going news story would be costlier than just accepting Elections Canada's decision and moving on.

Regardless, one of the difficulties facing both parties is that, notwithstanding the current fascination with tactics and campaign machinery amongst the media and regular inhabiters of Twitter, it is almost impossible to have a lengthy, calm and factual discussion about the facts, timelines, and merits of such cases without descending into spin, finger-pointing, and hyperventilating torque.

Almost impossible, that is, except for here.

I've prepared a briefing note below, starting with a look at the relevant sections of the Elections Act, and how they've changed over the last couple of decades.

[PS, I've also started using the version of the Act published on the Department of Justice's laws-lois.justice.gc.ca site, which is organized a little more compactly than the one at elections.ca, and also contains links to previous versions of the various sections. Check it out. On the other hand, the version at elections.ca lets you link to specific sections, rather than just specific parts, so they both have their uses.]

Elections Act on Political Contributions

The provisions regarding contributions to a political entity are contained in sections 404-405.2 of the Canada Elections Act. In summary they now say:

  • only citizens or permanent residents of Canada can make contributions, and "no other person or entity shall"
  • contributions means both monetary and non-monetary contributions, and include contributions made to any of the entities regulated under the Canada Elections Act (a registered party, a registered association [aka "riding association", aka "electoral district association", aka EDA], a candidate, a leadership contestant or a nomination contestant)
  • contributions from ineligible contributors have to be returned to them, or if that's not possible, have to be paid to the Chief Electoral Officer, who will forward them on to the federal government's general revenues (i.e., the Consolidated Revenue Fund of the government)
  • various exemptions and clarifications are then outlined:
    • transfers and provisions of goods and services within various arms of a political family are excluded
    • an employer who grants an employee a paid leave of absence to run for office is not considered to be making a contribution to that employee's political party
    • party membership fees of $25 or less in a year are not considered a contribution
    • convention fees (the full amount) *are* considered a contribution by the person who paid them (whether the delegate him- or herself, or someone else on their behalf)
  • (see more details in the Elections Canada factsheet)

Changes to Elections Act provisions on Contributions over the years

These provisions have undergone a lot of amendment over the years, however*. Regulation of campaign finance started in 1873 after some grubby dealings around the building of the Canadian Pacific Railway, but we'll start with the era before 2000.

  • Pre-2000 – There was no cap on contributions, though the federal political tax credit limits provided an effective ceiling for all but the most ardent financial supporters (75% of the first $100; 50% of the next tranche, and 33% of a subsequent tranche, up to a fixed ceiling). Publication of the names and amounts over $100 was argued to suffice for accountability. This regime had been in place since the Election Expenses Act of 1974.
  • Bill C-2 (2000) – The tax creditable ceiling was raised to 75% of the first $200, and the reportable amount ceiling was also hiked to $200.
  • Bill C-24 (2003) – The so-called "Chrétien reforms", but based on a regime first introduced by the Parti Québécois government of Réné Lévesque in the 1970s. It introduced contribution ceilings of $5,000; and directed that only individuals could donate to registered parties (meaning no donations could be made by businesses, unions, other levels of government, or other organizations). Businesses and unions could still contribute up to $1,000 to local candidates or ridings. The tax creditable ceiling was raised to 75% of the first $400, though the reportable amount ceiling was left at $200.
  • Bill C-2 aka "Federal Accountability Act" (2006) – This bill ended business and union contributions to local candidates and ridings, and lowered the contribution ceiling to $1,000 (adjusted for inflation, whenever the accumulated annual inflation increments from a 1992 base would raise the ceiling by another $100; thus it hit $1,100 almost right away, and just hit $1,200 this past year). An amendment made by Liberal Senator Rod Zimmer added the provision in s.404.2(7) which clarified that convention delegate fees are fully recognized as political contributions.

All along the way, another principle had been ensconced about the tax treatment of political fundraisers, to the effect that a receipt can only be issued for the portion of the ticket price not covering food, beverages, or other tangible benefits received by the contributor as part of the event. Thus the contribution here is not the full value of the ticket, but the ticket price minus the tangible benefits. All the parties are familiar with and have accepted these rules.

Chronology

With Bill C-24 set to come into effect on January 1, 2004, the NDP wrote to Elections Canada with a series of questions, including this one:

6. Would the purchase of an advertisement on the Party's website or in a convention magazine be considered a contribution or merely a payment for services rendered? Likewise, can the Party continue to sell items such as sweatshirts, baseball caps and buttons to unions, businesses or riding associations? Would the profit be considered a receiptable donation?

Answer:

Where a person or entity purchases goods or services from a registered party with the intention of economically benefiting the party, the payment for goods and services will not constitute contributions to the extent that the payment reflects the fair market value of the goods and service purchased. Any amount of the payment above the fair market value will constitute a contribution if the person purchasing the good and service intended to benefit the party.

The Toronto Star's Joanna Smith reported that a party insider from the time told her:

An NDP insider familiar with the issue said that in 2003, when the Liberal government under Jean Chrétien moved to limit donations from unions and corporations, the party sought an opinion from Elections Canada as to whether money obtained through selling advertising would be considered a political contribution….

Three years later, the Conservative government banned donations from unions and corporations altogether.

The party insider said the NDP also sought legal opinion and hired a third-party company to assess what fair market value for advertising would be in advance of each of the three policy conventions in question and followed those recommendations.

On that basis, former party National Director Brad Lavigne told Smith that:

"We put an emphasis on going to a third-party company to assess market value in order to keep (to) the letter as well as the spirit of the law…. We felt that while it wasn’t legally necessary to seek third-party validation for market value, we felt that it would be appropriate and well worth the investment.".

[The sentence about the Conservative government banning donations from unions and corporations altogether three years later is a red herring, because those new provisions only applied to riding associations and candidates. Union and corporations donations to national parties – the provision which is relevant here – were already outlawed by Bill C-24 as of 2004.]

So after consulting their third party consultant on the fair market value, the party charged:

  • 2006 Québec City Convention – 3 national unions (Steel, CEP, and the UFCW), along with the CLC, Douglas-Coldwell Foundation and NOW Communications $38,500 + GST of $2,360 for a total of $40,860
  • 2009 Halifax Convention – 4 national unions (Steel, CUPE, CEP, and the UFCW) 97,619.04 + GST of $4,880.96 for a total of $102,500
  • 2011 Vancouver Convention – 6 national unions (Steel, the UFCW, CUPE, PSAC, the Firefighters, and the Machinists), along with the CLC, and 5 businesses $179,337.49 + GST of $21,770.51 for a total of $201,108

Two months after the June 2011 convention, the Conservative Party's lawyer, Arthur Hamilton, wrote to the Chief Electoral Officer. He referred to earlier correspondence from the Commissioner of Elections to his own party, over an earlier dispute regarding the treatment of convention fees to their own 2005 annual meeting.

[As a sidebar, the Liberals back then were smarting because the timing of the retroactive coming into force of the Conservatives' Federal Accountability Act undermined their 2006 leadership convention, both from the perspective of the registration fee (at $995 it was going to account for most of their supporters' contribution ceilings that year) and the now well-known change to the contribution limits for leadership candidates. Probably for that reason, they seized on a June 27, 2006 comment made by newly-elected then-Treasury Board President John Baird at a Senate Committee studying Bill C-2 to the effect that he had not received a tax credit for his 2005 convention fees, and after the then-Chief Electoral Officer asked the Conservative Party to open its books on the convention costs, the Liberals wrote to the Commissioner of Elections in July asking for an inquiry. The Conservatives argued that the convention only broke even and thus if treated like any other fundraising event should not result in any political contributions, meanwhile filing a retaliatory complaint about the Liberals' convention fees.  But the party wound up having to file revised financial returns for 2005, which they did in late December, 2006, after Senator Zimmer's amendment to their bill was adopted by the House and the law came into effect. Jean-Pierre Kingsley's retirement as Chief Electoral Officer became public a week later.]

Hamilton's August 31, 2011 letter to the CEO about the NDP convention quoted the former Commissioner of Elections as saying:

Our position, simply put, is that under the [Elections Act] any voluntary provision of money, property or service for the Convention purposes described above, minus the fair market value of any tangible benefit one receives in return, constitutes a contribution. Opportunities to view or participate in debates, presentations, votes and so forth pertaining to party policies have significant political value only and cannot be excluded as tangible benefits from the calculation of the contribution.

Hamilton wrote that:

In the circumstances, which include the declarations by the NDP, the various unions identified and at least one corporate identity, it appears that the NDP has received what the Commissioner of Elections Canada has deemed to be contributions in contravention of the Elections Act.

and he asked the CEO to investigate. Conservative M.P. Dean Del Mastro separately filed a complaint to the Ethics Commissioner, but she later referred the issue back to Elections Canada as well.

Reaction from the NDP and the unions was consistent with the provisions of the opinion letter the party had received from Elections Canada: that advertisements and sponsorships were allowed, so long as they were at fair market value. Indeed, the Chief Electoral Officer himself made the same argument before the Procedures and House Affairs Committee a month later.

But according to the Democracy Law Blog, the issue may have been a distinction between sponsorships and advertising, though the blogger also questioned how market value could be determined (not knowing about the third-party consultant hired by the NDP), and further questioned whether political parties should be in the business of advertising at all.

This past June, the Deputy Chief Electoral Officer François Bernier responded to Hamilton's letter as follows:

With reference to the letter of August 31, 2011, from Arthur Hamilton, Counsel to the Conservative Party of Canada, I wish to confirm that it is the position of Elections Canada that sponsorships of political events constitute contributions that are subject to the rules set out in the Canada Elections Act, including the rules regarding the inadmissibility of certain contributors and contribution limits.

Four days later he also wrote to the NDP, enclosing a copy of his letter to the Conservatives, and thanking the party "for the full cooperation it has given to Elections Canada in order to resolve the issue promptly and effectively".

The party appears to have paid the funds back, but rather than including the reports of returned contributions in their 2011 annual return, have been advised to file a revised 2nd quarter 2012 return instead, which will be posted shortly we're told. Evidently it picked a reporter from a paper with a Sunday edition to tell its side of the story long-form, but is otherwise acquiescing to Elections Canada's position.

Analysis

The interpretation of the newly-amended Elections Act leading to the so-called "in-and-out" case (referred to as the "media buys" case by Elections Canada) was vigourously disputed by the Conservative Party, both in court and in the court of public opinion. And there were some valid points worth litigating, in the interests of clarifying how the new Elections Act would be applied. Eventually the party lost, and repaid $230,198 in rebates along with a $52,000 fine, in order to settle the case and have charges dropped against the principals involved. But as a result, the principle that local election expenses can only be "incurred" by the agent for a local candidate was established.

The NDP believes it had a valid case to make legally on the issue of fair market value for advertising and sponsorships, in view of its earlier effort to obtain an opinion on the issue from Elections Canada, and its retaining of a third-party consultant to help establish what such a fair market value would be. Obtaining a legally-tested answer to that question would be not only to their own interest but that of their competitor political parties, but that won't come to pass. The lesson the NDP appears to have learned from watching the Conservatives is that they're better off disposing of the dispute quickly, than dealing with years of spin and torque in the chattering classes while the lawyers settle the issues at hand.

In effect, Elections Canada has ruled that all sponsorships at political conventions by definition have a fair market value of zero, and therefore all sponsorship payments are political contributions, and can't be made by ineligible contributors. Conventions have to be paid for somehow, so the NDP will have to raise the price of its convention fees next time around, or else cut back on some of the production values or content to make up the difference. This might be the right ruling, but it's not going to get any legal review, more out of a fear of needing to explain a complex issue of public policy over and over in the sound-bite era than anything else.

How we got to the point where election law is being made through a series of gotchas is the sadder part. The Chretien government tolerated almost no amendments from the Reform Party to its overhaul of the Elections Act in 2000, so the Conservatives got them back with punitive retroactive amendments to the Act in 2006, which led the Liberals to exploit a slip of John Baird's at a Senate committee to launch a complaint about their convention fees, which led the Conservatives to counter-complain about the Liberals convention fees, and now the NDP's. Meanwhile, civil society groups are trying to get in on the action themselves.

Basic misapprehensions abound, such as the belief that Elections Canada can just make up its own rules (it has to implement and enforce the Elections Act as passed by Parliament, warts and all), that party activists know or could be expected to know everything that's going on in their party across the country, and/or know every nuance of our complex and always-evolving electoral legislation.

Call me old-fashioned, but I'd like to see election law made on the basis of what's good for our electoral system as a whole, and without people on either side of the issue deciding what their position is based on who they want to win, rather than a consideration of the facts and the outcome for the electoral system as a whole. We'll come back to this perspective again soon, when I get a chance to discuss the Etobicoke Centre case.

Thanks to those who provided me with copies of the relevant documents.

————————–

* For a good overview of the legislative developments, see these chapters in the Carleton University election series:

  • MASSICOTTE, Louis (1997). "Electoral Reform in the Charter Era", in Frizzell, Alan & Pammett, Jon H. (eds), The Canadian General Election of 1997, Dundurn Press, pp. 167-191.
  • MASSICOTTE, Louis (2006). "Electoral Legislation Since 1997: Parliament Regains the Initiative", in Pammett, Jon H. & Dornan, Christopher (eds), The Canadian General Election of 2006, Dundurn Press, pp. 196-219.
  • FLANAGAN, Tom & JANSEN, Harold J. (2009). "Election Campaigns under Canada's Party Finance Laws", in Pammett, Jon H. & Dornan, Christopher (eds), The Canadian General Election of 2008, Dundurn Press, pp. 194-216.

 Also, here's a bibliography of news clippings and other online sources on the current case:

and related sources about the Conservatives' convention case:

Leadership Rules Need Changing

August 31st, 2011 | 33 Comments

[Welcome, National Newswatch readers!]

The rules governing leadership fundraising in the Elections Act need changing, and fast. This is not a partisan question, as it could have an impact on any of the federal political parties within the next five years.

The current contribution regime for leadership contestants is amongst the worst-understood provisions of the Elections Act. Political actors, pundits and journalists alike get it wrong routinely, and I have even met MPs who voted in favour of the change who do not realize what the provision actually says.

Most people believe there is an annual contribution ceiling to leadership contestant, because that's what there is in every other case and it would just make common sense. But that's not what the law says, and I have to say: I believe the law is wrong-headed on this point.

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Here's the relevant section of the Elections Act:

405. (1) No individual shall make contributions that exceed

  • (a) $1,000 in total in any calendar year to a particular registered party;
  • (a.1) $1,000 in total in any calendar year to the registered associations, nomination contestants and candidates of a particular registered party;
  • (b) $1,000 in total to a candidate for a particular election who is not the candidate of a registered party; and
  • (c) $1,000 in total to the leadership contestants in a particular leadership contest.

The amounts in s.405(1) are scaled up through an inflation adjustment, in increments of $100, with a base year of 2002, as per s.405.1. Thus any reference to $1,000 became $1,100 almost right away, and would now be $1,200 (though this is not being implemented until 2012, I'm told).

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Note that contributions limits are set for an election candidate or nomination candidate for each calendar year, but candidates for a party leadership – where spending ceilings are likely to be much higher – must raise funds from contributors who can give the maximum only once per leadership contest. [Independent candidates for election to the Commons also face a per-event contribution ceiling.]

The drafting of the above sub-sections seems to make sense on the face of it, but in practice the law is an ass: allowing some candidates to game the system, on the one hand, and making it extremely difficult for honest candidates to cover their debts after the fact, on the other.

Think this doesn't apply to your party? Let me demonstrate:

  • Cabinet minister X retires from public office and takes up a job at one of the big five banks. An exploratory committee for some future leadership campaign spends the next five years collecting pledges of $1100 from various friends and colleagues and traditional party donors. In due course, that party's leadership opens up, the pledges are collected, and suddenly it becomes extremely difficult for any other candidate to enter the race.
  • A party is in its down cycle, and needs to attract new talent to renew itself. Unfortunately, an old warhorse has tapped the few remaining large contributors for the maximum donation, and newer entrants are effectively frozen out of the race because they can't hire the infrastructure to raise money from new small donors without already having seed money from larger donors.
  • [Actually happened:] In the middle of a leadership contest, under a known set of rules, Parliament amends the Elections Act, dropping the contribution ceiling to one-fifth of its previous size. Unsuccessful candidates who had entered the race under the old set of rules, and budgeted accordingly, were suddenly unable to find a sufficient number of donors who hadn't already contributed the maximum to one of the perceived front-runners, in order to pay off their debts.
  • An unsuccessful leadership candidate for one party, who is caught in such a squeeze, is approached by someone in another party to step down from his seat, with a promise that a new pool of contributors who support the second party will donate money to pay off his or her leadership debt.

In his report to Parliament on recommended changes to the Elections Act following the 2008 general election, the Chief Electoral Officer recommended that the "per-contest" limit be changed to an annual ceiling, in order to be consistent with the other entities he regulates (national parties, local riding associations, nomination candidates, and party candidates for election to the House of Commons).

I realize some people who understand the current provisions still support them, because they feel leadership contestants ought not to ring up such excessive expenditures in a vain pursuit of their party's leadership, and that such contests should be far more frugal. And, at one level, it's perhaps not hard to criticize a few individual campaigns for over-reaching. But consider: having a healthy ego is an occupational hazard of the practice of politics in the modern always-on age we live in, and we don't really want our leaders to be pessimistic and un-ambitious, do we?

A leadership campaign can be financed through:

  • individual contributions, to the per-contest ceiling per contributor
  • transfers from either the national party or a local riding association, so long as those transfers are offered on an equal basis to all candidates (see s.404.3(1) of the Act)
  • loans, though those loans must be repaid from out of either (a) or (b)

Note that it cannot be financed by the individual candidate, nor can it be funded by the candidate's party or riding association to any greater extent than that offered to other leadership candidates.

Now, should Parliament not see fit to amend s.405(1)(c) to institute annual contribution limits rather than per-event contribution limits for leadership contests, a political party organizing a leadership race could still decide to enforce more restrictive contribution limits on its own candidates.

For example, a party could set a $600 contribution limit for each contestant, regardless of the contribution ceiling in the Elections Act, and/or any spending ceiling the party also decided to put in place. This would reassure unsuccessful candidates that they could still raise funds after the race to pay their vendors and properly dispose of their debts, and thus allow a leadership race to remain relatively open.

Political parties occupy a unique place in our democratic system. They are not direct agents of the state, but at the same time they are more than private social clubs. They are voluntary organizations that have become professionalized and partially regulated by law, and are the chief recruiters, vetters and providers of the candidates we must choose from amongst, when we cast our ballots at election time.

It is in the public interest that political parties be able to attract a wide range of potential candidates during a leadership race, and that viable candidates not be dissuaded from running for fear they will be unable to pay their debts later on, or be subjected to potentially corrosive pressures in order to do so.

Thus, I urge Parliament to consider amending s.405(1)(c) of the Elections Act, at the first opportunity, to change the leadership campaign contribution ceiling from a per-contest one into an annual one, and I also urge the various political parties who will be launching leadership contests over the coming months and years to set rules and spending limits that don't force candidates into impossible situations after the fact.

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Of course, this raises the question of where the 2006 Liberal leadership candidates are at with their fundraising and debt repayments, and Glen McGregor of the Ottawa Citizen noted the other day that Stéphane Dion is continuing to hold fundraising events to pay down his debts.

In fact, most of the latest leadership candidates' returns have just been posted on the Elections Canada website, with the exception of Michael Ignatieff, Scott Brison and Bob Rae, who are all already out of debt and have filed final returns, and Stéphane Dion and Hedy Fry who both requested and were given 30-day filing extensions, as allowed under the judge's order.

The judge ordered that all candidates' debts be paid off by December 31, 2011 (with the exception of Ken Dryden, who has been given until June 30, 2012). After that they have a further 60 days to file their final returns, for which a further 30-day filing extension could also be granted.

Here are the latest figures (as of the candidates' June 30, 2011 returns, unless otherwise indicated).

  • $354,120.78 – Ken DRYDEN – [reminder, he has a June 30, 2012 deadline to pay everything off, while the other candidates only have until December 31, 2011]
  • $115,000.00 – Martha HALL FINDLEY
  • $110,090.00 – Joe VOLPE
  • $108,302.47 – Gerard KENNEDY
  • $33,164.08 – Maurizio BEVILACQUA
  • $77,500.00 – Hedy FRY – [as of Dec 31, 2010]
  • $30,000.00 – Stéphane DION – [as of Dec 31, 2010] UPDATE: return now available, figures remain the same
  • $0 – Carolyn BENNETT
  • $0 – Scott BRISON
  • $0 – Michael IGNATIEFF
  • $0 – Bob RAE

Note that a large chunk of Mr. Dryden's outstanding obligation is the result of unpaid claims totalling $129K (all but $5K in loan interest), and the one operating loan taken out by the campaign was a $300K loan from Mr. Dryden himself at an interest rate of 5.5%. Thus, he is in the unenviable position of legally having to raise money to pay himself back, or else he would be in violation of s.405(1)(c) if the loan becomes a deemed contribution and puts him over his contribution limit for the leadership contest. He's plugging away at it, but it's going slowly, and it was an $805K campaign that obtained just under 5% of the vote on the first ballot (238 delegates). In contrast, the three top candidates spent some $3M each.

Maurizio Bevilacqua appears to have most aggressively retired his debts since our last check-in, when he owed some $193K.

Note also that the government has several times tabled legislation seeking to further regulate who candidates and contestants may obtain loans from. We can probably expect to see a version of this legislation coming forward at some point in the current Parliament as well.

Hill Times Article: Time to Modernize Election Process

June 14th, 2010 | 4 Comments

Following the tabling of the Chief Electoral Officer’s Report to Parliament on the 40th General Election last week, I filed a story for the Hill Times, which was published in this morning’s edition.? It is reprinted here with kind permission.

Time to modernize election process, urges Canada’s chief electoral officer

Chief Electoral Officer Marc Mayrand tells Parliament the Elections Act needs an overhaul.

By ALICE FUNKE

The wave of legislative reforms to federal political financing and reporting rules in recent years has resulted in an increasingly complex system that needs more coherence, advises Chief Electoral Office Marc Mayrand in his comprehensive post-2008 general election report released last week.

Saying “we need to modernize the electoral process and make it more efficient,” Mr. Mayrand is recommending that Parliament enact a series of changes to make the rules more consistent between the five main political entities he regulates—parties, candidates, nomination contestants, riding associations, and leadership candidates—to strengthen his ability to ensure compliance, but also to reduce some of the unnecessary burden on largely volunteer bodies.

Topping his list is a request for authority to ask for supporting documentation from political parties for the expenses reported on their national campaign returns, both to determine that the expenses were properly incurred before paying out their rebates, and to ensure that the national spending limit was adhered to.

Currently national parties file a one-page audited report summarizing their campaign expenditures under a set of nine categories, but unlike the case with candidates or riding associations [actually, it’s only the case for candidates], the law does not allow Elections Canada to request receipts or other supporting documents in order to certify those expenses. Given that some $29-million in public funds were paid out as election expense rebates in the 2008 election, Mr. Mayrand said he believes that his power of oversight for parties should be at least equivalent to that for candidates, riding associations and leadership contestants in this regard, and be consistent with similar powers already granted to every one of his provincial counterparts under their governing statutes.

A second key area needing consistent rules is the area of contribution limits for leadership contestants, versus political parties, candidates and riding associations. Contributions to a leadership contestant are currently capped for the entire contest, while contributions to a candidate, riding or political party are capped on an annual basis, something Mr. Mayrand said he believes should be the case for leadership contestants as well.

The legislative regime for leadership contestants was put into place before later rule changes prohibiting corporate and union donations and further capping contributions came into effect, and should be reviewed to ensure that all the pieces work together, Mr. Mayrand explained.

“Often you’ll see the recommendations reflect issues that happen as a result of successive legislative changes, and no-one’s taking a step back and asking, ‘Are we still making sense,’ ” he said.

Mr. Mayrand is also suggesting the introduction of some administrative penalties when parties or candidates overspend their limits, as is the case in Ontario and Manitoba. Currently the commissioner of elections can send a warning letter or enter into compliance agreements with candidates, or prosecute them. Setting an administrative penalty, such as a dollar-for-dollar reduction in their election expense rebate, would offer a middle ground, and provide more timely consequences and better compliance, Mr. Mayrand said.

A total of 50 recommended changes to the Elections Act, covering the electoral process, political financing, governance and a variety of technical issues, will now be studied by the Commons Procedure and House Affairs Committee.

Another key area needing attention is that both citizens and political parties want to do more business electronically with Elections Canada, Mr. Mayrand said. But in order to permit both e-registration on the voters’ list and the electronic filing of many party and candidate reports, an amendment to the Elections Act is required to authorize a secure non-signature means of authentication for electronic transactions.

E-registration is set to commence in the fall of 2011, but Mr. Mayrand said the act needs to be “modernized” in order to provide a “fuller range of e-services,” and to obtain Parliamentary authorization to commence pilot projects of i-voting for certain groups of voters during a by-election.

Alice Funke is the publisher of the Pundits’ Guide to Canadian Federal Elections (cá độ bóng đá trên điện thoại www.diretoriorestaurantes.com)

UPDATED: Proposed Election Act Amendments from the CEO

June 11th, 2010 | 0 Comments

The Chief Electoral Officer’s comprehensive post-2008 general election report was tabled in parliament Wednesday, and CEO Marc Mayrand met with members of the media Thursday morning to discuss his recommendations for overhauling the Elections Act in more detail.? Glen McGregor’s story for the Ottawa Citizen is here.

While I’ve filed a general story for Monday’s Hill Times, I thought readers might be interested in the full list of recommendations governing Political Financing.

  • Supporting documents requestable from registered parties The CEO says he needs the same authority to request supporting documents from registered parties to confirm their rebatable election expenses as he now has for candidates, and as all his provincial counterparts have under their respective statutes.? This is his number one ask, and tops Glen’s story as well.? You can examine the parties’ campaign returns at the Elections Canada website here.
  • Consequences for overspending candidates The law as currently written permits either a “slap on the wrist” (a warning letter or a compliance agreement) or a full-blown prosecution for cases of overspending, with not only nothing in between, but no actual financial consequences.? Weirdly, the way the law is written, expenses incurred over the limit are still rebatable: something I certainly never knew, nor could have imagined. [UPDATE: Well, I’m really glad to find out I’m wrong on that one.? What they were trying to say in that section of the report was that if a candidate *under-reported* expenses, and was fined for doing so, s/he would still be eligible for a rebate of the additional expenses, possibly amounting to more than the fine.? However, no rebate is given for expenses exceeding the limit, and thank goodness for that!]? Mayrand is proposing that some administrative penalties be added to the Act, such that candidates or political parties found to have overspent their limits would be dinged dollar-for-dollar out of their rebates.? In addition, if they were found to have done so deliberately, they could still be prosecuted.? This is currently the law in Ontario and Manitoba.
  • No re-registration of delinquent riding associations The CEO believes there should be a four-year ban on registering a new riding association for a party in a riding where its last riding association had outstanding financial returns, and/or deregistered itself and hasn’t filed its final return.? The ban would be reversable once the missing returns were filed.
  • Candidates should not be allowed to keep property acquired during the campaign At present, candidates can transfer the property of their campaigns (e.g., an inventory of signs, or a piece of office equipment) to either their local riding association, and/or the party that endorsed them, but they don’t have to.? The CEO argues that candidates should not be allowed to profit financially from their candidacy, and thus should be required to dispose of that property at fair market value, include that value in the calculation of campaign revenue and campaign account surplus, which then triggers other sections of the Act to govern its disposal.
  • Candidates should also bear responsibility for filing a false or misleading campaign return Currently only the financial agents are legally responsible for these offences, but the CEO believes the Act should be amended to share that responsibility with candidates and nomination contestants.
  • Clarify the Act’s treatment of advertising expenses incurred prior to the campaign period for transmission during the campaign period, by both third parties and riding associations.? Currently the Act only regulates expenses incurred during the campaign for these two groups.? In light of the fixed date amendments to the act, this oversight could have growing consequences for perceptions of fairness in the electoral system.
  • Clarify the Act’s treatment of candidate debates as non-monetary election expenses The definition of a candidate’s election expenses in s.407 probably includes the costs of organizing candidate debates, since they promote a candidate or might disadvantage a candidate who doesn’t participate.? So, for example, say the local community association organizes a debate for 4 candidates, one quarter of its costs in organizing the debate could arguably be considered a non-monetary contribution to the participating candidates.? But wait, since another set of amendments were passed banning contributions by anyone other than individuals, now the community association would be in violation of the Act, since it may not make even a non-monetary contribution to those candidates.? You and I might look at things and say that reasonable people could easily figure out this is not what Parliament intended, but public servants are governed by the law the way it’s written.? What’s worse is that (and let’s be honest with ourselves here), some all-candidates meetings are organized by groups who clearly intend to help one candidate and/or hurt another, and even in other occasions where that organization might be trying to be fair, their obvious point of view might leave certain other candidates feeling the deck is stacked against them regardless.? Arguably in the former case, that group’s expenses should be treated as a non-monetary contribution to the candidate being promoted, but for the problem that only an individual could then hold such a meeting, not an organization.? A further problem would plague the case of meetings in ridings with large numbers of candidates (usually the core urban riding in each city): would the association trying to organize a neutral meeting still have to invite every single candidate to it?? The CEO is asking Parliament to clarify its intent in these situations, and outlines the guidelines he has employed to handle them, asking for some legislative backup of those practices.
  • The treatment of unpaid election expenses by candidates, nomination contestants, and leadership candidates needs to be streamlined, and made more effective.? Explaining this recommendation could take an entire blogpost all on its own.? The law as currently written did not anticipate many of the consequences of its application, and means amongst other things that a candidate has to apply to the CEO or a judge in order to pay off their debts any later than 4 months after the campaign has ended (18 months for leadership candidates), or it becomes a “deemed contribution” by the vendor or lender.? This creates a host of problems, because given that candidates usually haven’t paid those bills because they don’t have the cash and need to raise it, now they can no longer legitimately spend any money in order to raise it (since the Act says that any invoice must be submitted within 3 months), nor to request the extension from the Chief Electoral Officer or a judge.? Simply going ahead and paying the bill after 4 months without authorization (which many people do inadvertantly, not realizing the requirement), not only puts them in violation of the Act, but is now no longer transparent, since unauthorized payment of an outstanding debt does not trigger the requirement for an updated campaign return which is invoked with an authorized payment of an outstanding debt.? So we’ll never know who they raised money from to pay those debts, or whether they were paid and paid in full … unless the CEO decides to impose that requirement when they ask for authorization to pay the claim after the deadline.? Worse still is that any updated campaign return has to have an updated audit, thus incurring another expense that the candidate would have to raise more money to pay, without spending any money to raise it, and so on and so on and so on.? It’s a mess.? Trash the whole system and rebuild it from scratch I say.? The CEO’s suggestions in that regard seem reasonable to me, but then I’ve never run a leadership campaign, nor been an official agent for a candidate.
  • Judges shouldn’t need to approve every single filing extension, just the grossly negligent ones Political entities like candidates or political parties can ask for extensions on their filing deadlines up to two weeks after the due date, but after that it’s no-person’s land.? Although there’s no provision for it in the act, in practice the parties have retained lawyers on behalf of their candidates to request extensions from a judge.? Also, there are only very narrow grounds for granting any extension, and no extension means no return of their nomination deposit, no rebate payment, possible deregistration, and no sitting as an MP in Parliament.? Oh and prosecution.? So, there may be situations in which the CEO might feel that an extension is warranted, but has no authority under the act to grant the extension; following which no financial return will be published, an unfortunate result that works against transparency.? The proportion of candidates not filing in time has risen from 20.3% in 2004 to 29.4% in 2008, according to the report, so this situation has become more pressing over time.? To ensure transparency in the absence of some legislative changes, the agency has had to reluctantly sacrifice its goal of ensuring timeliness.? It would like to redefine the acceptable reasons for granting an extension, not bring the courts into the process so early, and introduce an administrative penalty such that late candidate returns forfeit a portion of their nomination deposit.? Also, updated returns should not have to have a completely updated audit, as it serves little practical use.
  • The ‘per contest’ cap on leadership contest fundraising should be replaced with an annual cap, as is the case for contribution limits to every other political entity regulated under the Act (such as candidates or parties).? It’s also recommended to repeal the presumption that any contribution made within 18 months of the conclusion of a leadership campaign was made for that race, and not for any subsequent one that may since have started.? Finally, not every report currently mandated to be filed by leadership contestants serves a purpose, and two of the six required reports could be dropped in the CEO’s view.
  • Candidates shouldn’t need bank accounts if they don’t spend anything This change alone would save on a lot of pointless administrivia.? In a related recommendation, the CEO suggests that candidates who are not rebate-eligible and don’t raise money or incur expenses above $5K or $10K really shouldn’t need to produce an auditor’s report when they file their returns.
  • Parties and riding associations should be able to transfer funds and goods and services to a candidate’s campaign at any time Currently this can’t be done until the candidate is confirmed by the returning officer, however this can impede their campaign start-up significantly.
  • The rules around by-elections superceded by general elections need to be completely revisted.? All kinds of unintended consequences result from this situation, the craziest of which is that a by-election candidate is not allowed to transfer the assets of their by-election campaign to their general election campaign, even though this violates any standard of common sense.? Candidates endorsed by a political party could transfer the assets to the riding or party and then ask for them to be transfered back to the new candidate campaign.? But Independent candidates in that situation are completely out of luck.
  • The limit on fees allowed to be paid to campaign auditors should be allowed to be adjusted for inflation.

I think fair-minded people and those who care about sensible public administration will agree with the issues raised by the Chief Electoral Officer here, even if they don’t agree with every detail of the proposed solutions.? For others, the above blogpost has probably unfortunately served as a guide on some of the ways they could game the system.

However, the CEO’s general point in making these recommendations to Parliament is that the political financing provisions of the Elections Act are a patchwork of a succession of legislative changes, which don’t work well together, aren’t consistent across all the political entities he has to regulate, and leave some large gaps in some areas of transparency and compliance, while imposing unneeded and burdensome administrative requirements in others.? For anyone who’s worked with the Elections Act at all, they can