House of Commons Committees - HAFF (37-2) - Evidence - Number 031.pdf

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Publications - April 3, 2003

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37th PARLIAMENT, 2nd SESSION

Standing Committee on Procedure and House Affairs

EVIDENCE

CONTENTSThursday, April 3, 2003

1105

The Chair (Mr. Peter Adams (Peterborough, Lib.))

Mr. Michel Guimond (BeauportMontmorencyCte-de-Beauprle-d'Orlans, BQ)

The Chair

Mr. Michel Guimond

The Chair

Mr. Jacques Saada (BrossardLa Prairie, Lib.)

The Chair

Mr. Jacques Saada

1110

The Chair

Mr. Jacques Saada

The Chair

The Honourable Don Boudria (Minister of State and Leader of the Government in the House of Commons)

1115

1120

1125

1130

The Chair

Mr. Don Boudria

1135

The Chair

Mr. Ted White (North Vancouver, Canadian Alliance)

Mr. Don Boudria

Mr. Ted White

The Chair

Mr. Don Boudria

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1140

The Chair

Mr. Don Boudria

The Chair

Mr. Joe Jordan (LeedsGrenville, Lib.)

1145

The Chair

Mr. Don Boudria

The Chair

Mr. Michel Gauthier (Roberval, BQ)

1150

The Chair

Mr. Don Boudria

The Chair

Mr. Jacques Saada

1155

The Chair

Mr. Don Boudria

1200The Chair

Mr. Dick Proctor (Palliser, NDP)

The Chair

Mr. Don Boudria

1205

The Chair

Mr. Dick Proctor

The Chair

Mr. Geoff Regan (Halifax West, Lib.)

Mr. Don Boudria

Mr. Geoff ReganMr. Don Boudria

The Chair

Mr. Don Boudria

The Chair

Mr. Geoff Regan

Mr. Don Boudria

The Chair

Mr. Ted White

1210

Mr. Don Boudria

The ChairMr. Ted White

Mr. Don Boudria

1215

The Chair

Mrs. Carolyn Parrish (Mississauga Centre, Lib.)

Mr. Don Boudria

The Chair

Mrs. Carolyn Parrish

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The Chair

Mrs. Carolyn Parrish

The Chair

Mr. Michel Guimond

Mr. Don Boudria

Mr. Michel Guimond

Mr. Don Boudria

Mr. Michel Guimond

Mr. Don BoudriaMr. Michel Guimond

Mr. Don Boudria

1225

The Chair

Mr. Michel Guimond

Mr. Don Boudria

Mr. Michel Guimond

Mr. Don Boudria

Mr. Michel Guimond

Mr. Don Boudria

Mr. Michel GuimondThe Chair

Mr. Don Boudria

The Chair

Ms. Marlene Catterall (Ottawa WestNepean, Lib.)

Mr. Don Boudria

1230

The Chair

Ms. Marlene Catterall

Mr. Don Boudria

The Chair

Mr. Dick ProctorMr. Don Boudria

Mr. Dick Proctor

1235

Mr. Don Boudria

Mr. Dick Proctor

Mr. Don Boudria

The Chair

Mr. Dick Proctor

The Chair

Mr. Joe Jordan

1240

Mr. Don Boudria

Mr. Joe Jordan

Mr. Don Boudria

Mr. Joe Jordan

The Chair

Mr. Don Boudria

Mr. Joe Jordan

Mr. Don Boudria

The Chair

Mr. Ted White


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1245

Mr. Don Boudria

Mr. Ted White

Mr. Don Boudria

Mr. Ted White

Mr. Don Boudria

The Chair

Mr. Ted White

The Chair

Mr. Jacques Saada

1250

The Chair

Mr. Jacques Saada

The Chair

Mr. Don Boudria

Mr. Jacques Saada

Mr. Don Boudria

The Chair

Mr. Michel Guimond

The Chair

Mr. Michel Guimond

Mr. Don Boudria

Mr. Michel Guimond

Mr. Don Boudria

Mr. Michel Guimond

1255

Mr. Don Boudria

Mr. Michel Guimond

Mr. Don Boudria

The Chair

Mr. Dick Proctor

Mr. Don Boudria

1300

The Chair

Mr. Dick Proctor

The Chair


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CANADA

Standing Committee on Procedure and House Affairs

NUMBER 031 l 2nd SESSION l 37th PARLIAMENT


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EVIDENCE

Thursday, April 3, 2003

[ R e c o r d e d b y E le c t r o n i c A p p a r a t u s ]

(1105)

[English]

The Chair (Mr. Peter Adams (Peterborough, Lib.)): The order of the day is Bill C-24, an act to amend the Canada Elections Act and the Income Tax Act, politicalfinancing.

With due respect to our guests, who I'll welcome formally in a moment--the minister responsible for the Canada Elections Act--there are two or three items I'd like todeal with first. If we can't deal with these very quickly, we will simply move on.

The first one has to do with the report of our steering committee, the Subcommittee on Agenda and Procedure. I think you all have that before you. It's not myintention to ask someone to move to this report; I simply ask that we generally accept it.

If you will look at it, the steering committee has decided we will have another in camera meeting about security on the Hill.

Monsieur.

[Translation]

Mr. Michel Guimond (BeauportMontmorencyCte-de-Beauprle-d'Orlans, BQ) : On a point of order.

The Chair: Yes, of course, Mr. Guimond.

Mr. Michel Guimond: I apologize for interrupting you, Mr. Chairman. Seeing as we have the government leader appearing as a witness, could we stick to the agendaon the notice of meeting and discuss the other matters once the government leader has left, instead of talking about the menu and sandwiches?

[English]

The Chair: I thank you for that and know of your concern about these matters. As chair, I understand your point. We have a guest, and I've apologized to our guest,but somehow in these meetings I have to deal with the routine affairs of the committee. My experience is--and I have to be frank with you--that if I leave these thingsuntil the end of the meeting I tend to be talking to a much smaller audience than I am at the beginning. So if you don't mind, I'll continue with this and will do it verybriefly.

The report says we will have one meeting with Major-General Cloutier in camera on security. Our intention is to have that meeting in the first or second weekfollowing the break.

On the conflict of interest code, it says here we will receive written submissions until April 2. It was announced in the House of Commons that we have extended thattime until tomorrow. So the deadline for written submissions on the code of conduct is tomorrow, Friday.

It is my intention to hold a meeting one day next week to consider the draft report we have prepared, all the suggestions we got from the two round tables, and thewritten submissions we have received. I'd like to look around the table to see whether colleagues would prefer Tuesday or Wednesday. Can you just indicate?

Jacques Saada.

[Translation]

Mr. Jacques Saada (BrossardLa Prairie, Lib.): Mr. Chairman, in order to do justice to the work done by the colleagues who have participated in the roundtables, we're going to at least need a summary of what was said, so that we can read it in detail and be productive. So I would suggest that this take place onWednesday instead.

[English]

The Chair: I appreciate you saying that. This summary will likely be available on Monday, so you will have it in advance.

So do you want Tuesday or Wednesday? I will aim for Wednesday and it will be an additional meeting.

It says here we're meeting with the Honourable Don Boudria today on Bill C-24, and we'll meet with Mr. Kingsley, the Chief Electoral Officer, on Tuesday. On TuesdayI also propose to produce the draft of the plan of action on Bill C-24 and the complete list of witnesses that have been submitted by all parties.

Jacques Saada.

[Translation]

Mr. Jacques Saada: Mr. Chairman, I would simply like to make sure that all political parties are given an opportunity to be included on the list of witnesses invited toappear.

(1110)

[English]

The Chair: Yes. I can say that because I have seen the submissions so far. We received one more submission today. I think all the parties here support that. We


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have a suggestion that all the parliamentary parties be represented, and all parties. I think there are 12 or 13 registered political parties at the federal level. We have toconsider that and how many of them we can deal with. So I thank you for your point. The parties are already on the list.

[Translation]

Mr. Jacques Saada: Does that mean that the committee will be deciding on the matter on Tuesday?

[English]

The Chair: It will be up to the committee whether we can actually make the decision on Tuesday, because Michel Guimond doesn't like us doing business while wehave witnesses before us. But it will certainly be either on Tuesday or at the Wednesday meeting on conflict of interest. So I would like to leave it at that and change to

something else.

I am delighted to welcome here today the Honourable Don Boudria, leader of the government in the House of Commons.

Mr. Minister, it's a pleasure to have you here. We know you're responsible for the Canada Elections Act and that is why you are here, but we also know of your pastlong interest in this committee. We look forward to what you have to say. No doubt you will introduce your colleagues.

The Honourable Don Boudria (Minister of State and Leader of the Government in the House of Commons): Thank you, Mr. Chairman.

Let me say at the outset how pleased I am to be before your committee. As you've indicated, I was a member of this committee for many years. As I sometimes say,I was a member of this group so long ago that I had hair in those days.

I want to introduce the two people with me. Madam Kathy O'Hara is deputy secretary to the cabinet, machinery of government. In that role she is, of course, also mydeputy minister.

[Translation]

And this is Ms. Michle Ren de Cotret, who is the Senior Privy Council Officer and Counsel for legislation and house planning. Indeed, Ms. Michlle Ren de Cotretprovided a great deal of assistance to me in preparing this bill, and I would like to thank her before I begin making my comments.

Mr. Chairman, committee members, I am pleased to have this opportunity to appear before you today to discuss Bill C-24, an Act to amend the Canada Elections Actand the Income Tax Act (political financing). The main objectives of the legislation are to improve the transparency and fairness of Canada's electoral system.

The debate on the bill has been largely positive both in the House of Commons and in the media. Most parties appear to agree with its overall objectives, and much ofthe discussion thus far has centered on gaining a greater understanding of its key measures, and perhaps examining ways of achieving improvements.

I have had the opportunity to speak to a number of experts in the field of political financing since the bill was introduced, and they have indicated their support for theproposed measures. Before introducing the bill, I visited the legislatures of Quebec, Ontario, British Columbia and Alberta, the four largest provinces, to try to pull outthe best of their laws as well.

In many jurisdictions, including those of the Canadian provinces that I visited, as I was saying, the measures proposed in this bill are already being applied. This isnot occurring everywhere, naturally, but certain aspects are being applied in each region, and many of these provisions follow up on recommendations from the ChiefElectoral Officer as well.

In my presentation today, I would like to focus on some of the key issues that have arisen to date in the debate.

I think the discussion thus far has shown that there is strong support among parties for the extension of disclosure requirements to electoral constituencyassociations, leadership contestants and nomination contestants. Some have expressed concern that these measures would place too much of a burden on nominationand leadership contestants, and electoral constituency associations.

Of course, it is true that the disclosure measures will increase demands to some extent on associations and leadership and nomination contestants. However, havingrules is bound to be more demanding than not having any. I believe they are reasonable measures which are vital to meeting the bill's objectives. Anyway, manyprovincial jurisdictions already have such rules. You and I, Mr. Chairman, were provincial members of Parliament in the province of Ontario, and our provincial ridingassociations had to fill out the same documents as those included in this bill, at any rate as far as the documents pertaining to riding associations are concerned.Currently, these documents do not have to be filled out at the federal level. Several other provinces, including Nova Scotia, New Brunswick, Manitoba, Alberta and BritishColumbia, have certain requirements, albeit not all the same, with respect to riding associations.

Before moving on to discuss financial controls, I would like to address an issue that has been of concern to manywhat will happen to funds held in trust or, in certaincases, in a so-called trust, or otherwise, which are not currently held by the riding association, and even to funds that riding associations have had for a long time. Mr.White is the one who brought this matter to my attention.

Currently, the bill includes a transitional provision in section 71 whereby electoral riding associations would be required to provide a statement of contributionsreceived since the last general election and before the coming into force of the legislation, namely the last election, and disclose the names and addresses of donors.

(1115)

But of course, as Mr. White pointed out, once again, the associations had the funds before now, and if we want to establish a system, I think that we must baseourselves on the premise that the funds that the associations already have in their possession are included at the outset. Otherwise, there will be funds that will not beaccounted for in any way whatsoever.

We could draw a parallel with the situation that occurred in 1976, when we introduced the legislation governing political parties. We decided that parties shoulddeclare their assets and that the rules would apply to the new data as of that date, but we had to establish a starting point.

I think that if the committee wanted to present amendments on that issue, I would be very favourable to them. Amendments of this type make a lot of practicalsense, since the funds were originally donated in the absence of any rules, and, naturally, we cannot create rules that are retroactive to a time when there were none.

[English]

With respect to the prohibition limits on contributions, Mr. Chairman, the proposed legislation would prohibit political contributions from corporations, unions, andassociations while allowing a very small exception whereby these entities would be able to contribute a maximum of $1,000 to the aggregate of candidates, localassociations, and nomination contestants of a given party, in any calendar year. The $1,000 exception is in recognition of the importance of small contributions at thelocal level for candidates as well as in recognition of local businesses, unions, and associations at the community level--in other words, if the local hardware store isincorporated and wants to contribute to the riding association's annual golf tournament that way. But then again, it's only a small amount and central parties cannothave it.

It has been brought to my attention, however, that the $1,000 limit may have an unwanted stringent effect where there is more than one election in a year--forexample, if a byelection occurs and then there should be a general election in the same year. Now, that second part is unlikely this year, I would suspect, but still, it is atleast theoretically possible. Given that, I'd like to signal that should the committee be willing, it might create an amendment in that regard to allow a corporation or aunion that has already contributed in a riding in a particular year to make a supplementary $1,000 contribution if more than one election or byelection is held during that


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year.

Of course, though, there would have to be a limit to this so people don't shop this around the country. I would say that it should be provided that this would not occurmore than once. In other words, if there's a byelection and there's a general election, you can't shop around for a new byelection someplace else in the country to try todo it again. I wouldn't want to undo the principle of the bill, which, generally put, is not to have union or corporate contributions, but I'm looking forward to suggestionsof the committee in that regard.

In addition to the prohibition on corporate and union donations, the bill would also limit the amount an individual could contribute to political participants. As memberswill know, during the debate on this measure some members have indicated their view that the proposed limit of $10,000 per individual contributor may be too high. Ithink it's necessary to recognize at the outset that the line must be drawn somewhere and that there's no magic number.

If we look at the existing limits in other regimes, we can see there's a significant range. For instance, Quebec and Manitoba have a limit of $3,000. Although somepeople have pointed out quite correctly that if we take the $3,000 that was established in Quebec in 1977 and gross it up to today's values with indexation, it would infact get very close to the limit in the bill, which is $10,000. Ontario for its part has a limit of $7,500. Alberta's limit is $15,000 plus a maximum $3,750 to the districtassociation of the same party, which gives you a limit of $18,750. Ours, you see, is a little more than half that, $10,000.

I believe the issue here is finding the appropriate balance, the balance between achieving our objective of removing the perception that wealthy individuals have anundue influence on political participants while recognizing the importance of financial contributions for a healthy political system. At the end of the day, we feel a limit of$10,000 achieves that, but that doesn't mean there's not a range of limits that would achieve similar objectives.

I look forward to hearing the committee's views in that regard. If they have another amount that is reasonable, I'd be prepared to consider that as well, Mr.Chairman.

Another issue that has been raised during the debate thus far is the question of whether certain loopholes exist that would allow political participants to avoid thefinancial controls in the bill. This matter was raised particularly in the context of trust funds. Let me say at the outset that we certainly don't want any such loopholes.We don't believe there are, but if the committee finds some, by all means help us to ensure we have the transparency we're seeking.

(1120)

First of all, the bill does not allow unregulated contributions to flow through trust funds. All contributions for electoral purposes are subject to the contribution limitsand prohibitions, regardless of whether the contribution was made before or after the writ was issued, because now of course contributing to a constituency associationhas similar rules.

The bill permits only individuals to make contributions, aside from the minor corporate and union exceptions I mentioned a while ago. And since trust funds areneither union, corporate, nor association contributions, contributions from trust funds are not permitted.

Should there be any doubt, we have an anti-avoidance rule in the bill, and if members think that should be enhanced, that's okay too. The anti-avoidance rule in theproposed legislation prohibits any attempt at any collusion aimed at circumventing a prohibition or a limit on contributions.

During the consultation process I had prior to this bill, one of the strongest messages I received was from particularly--well, from all members, arguably, but maybemore so from women members of Parliament on the need for a more level playing field with the nomination conventions, the local investitures. As a result, the proposedlegislation includes a spending limit for nominations at 50% of the amount candidates were allowed to spend during the last election. The chief electoral officer put in hisreport that the limit should be the exact amount of the previous election.

Now, since that time, I've heard from some members that in their view 50% is still too high to ensure that nomination contests are open and fair to all potentialcandidates. Given that, I certainly would be prepared to support an amendment to lower that limit. Maybe members want to think of something like 25% or some suchthing.

I would invite you, though, to be prudent and not to put it so low that rural candidates, who often have lots of expenditures for travelling here and there and othersuch expenditures, are not needlessly disadvantaged. So bear that in mind when you work on that, if I may so respectfully suggest, Mr. Chairman. But perhaps anamount such as 25% or something like that would achieve both goals: namely, provide a sufficient amount to have a proper nomination process in terms of expendituresand at the same time allow a candidate to visit the various communities and so on.

Now I'd like to discuss issues related to the public funding measures in the bill for a moment. While most parties have voiced their support for the public fundingmeasures--and in particular I want to thank the New Democratic Party, the Bloc Qubcois, and arguably to a degree the Conservatives--the issue of the public fundingallowance came to be a flashpoint for others, namely the Canadian Alliance.

Clearly, if we are to achieve our objective, our objective of removing the perception of undue influence that arises from the donations from corporations, unions, andwealthy individuals--and I note that there has been support even from those of us who disagree with the public funding--there is a cost to parties for lost donations. Aswe're all aware, political parties, whether I agree with a particular one or not, incur expenses outside election periods. They carry out responsibilities, and public fundingor funding of some sort is essential to their effectiveness.

Political parties perform a key role in mobilizing the electorate, representing the views of all groups in society, and formulating policy alternatives. Also, even at thequasi-official level on election day, they scrutineer; they ensure at the local level that the system, represented by at least two sides in the counting of the vote, is donein a way that meets the test of accountability. All these things are largely performed by political parties in our country.

In view of the important role, then, parties play in so many aspects of the democratic system, it seems obvious they should be supported. If we're going to removeother contributions, then they should be supported by the state. Otherwise, I think we run the risk of limiting their effectiveness and thereby diminishing our democraticsystem.

(1125)

Anyway, public funding of the electoral system, including political parties, is not new. The partial reimbursement of party election expenses and tax credits forcontributions by parties have been around since 1974. Need I remind everyone that very few people have ever given back; I don't believe public accounts has a recordof any of those who received public funding since 1974, either by way of reimbursement to political parties or to candidates. So political contributions by the state havebeen accepted by just about everyoneand certainly by all political parties sitting in the House of Commons now.

Even before 1974, we all know that people claimed these donations as business expenses for income tax purposes. So this is not new. Providing a public allowance topolitical parties continues this tradition. It does so in a way allowing voters to have a direct impact on where their tax dollars are going, which is beneficial for voters,parties, and our electoral system generally.

Furthermore, I'd like to emphasize that the public allowance is not designed to benefit one party over another, as has been claimed by some. If someone does thecalculation, it certainly isn't advantageous to the present governing party vis--vis other parties. In calculating the amount, we took into account contributions receivedby parties over the last electoral cycle, and we estimated the amount of contributions that would have been lost to parties as a result of the prohibition on corporate andunion donations. The resulting $1.50 per vote allowance would ensure that no party would lose from this restriction, and consequently all parties would have the fundsthey need to function effectivelybased, of course, on these results. The result of the next election determines what people will get after that. This is exactly the systemexisting in at least two Canadian provinces now. In fact, as I said a while ago, our research shows that opposition parties may actually find the new funding measuresmore beneficial to them than does the present governing party.

I want to touch briefly on transparency and other measures in the bill. Over the last few days some people have alleged and it's been noted in the media that ourelectoral system perhaps needed more anti-avoidance rules in regard to how donations are accepted and receipts for tax credit are issued. If the committee wishes to dothis as well, I would certainly welcome it, but I hope at least that the discussion of this bill, with all its measures, does not become

(1130)


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[Translation]

a sort of trial, because I think we would all lose. If the current measures aren't stringent enough, they should be improved. My staff are also currently looking at ways toimprove this system so that it works in the best interest of taxpayers.

[English]

In conclusion, I believe that Bill C-24 meets the objective of improving transparency and fairness in our electoral system while removing the perception, largelyunjust, of undue influence by corporations and unions and perhaps by other wealthy individualsnot that we think this is the case, but we are working within thisdomain and must address these perceptions. I believe that the bill is based on a reasoned approach, reflecting the history of political financing in Canada. It builds onexisting measures in our country and provinces and internationally, and it takes into account many recommendations made by the chief electoral officer, among others.

[Translation]

Mr. Chairman, I would be pleased to answer any questions that you or my colleagues may have about this bill and to see how we could improve it, how we could

adopt it so that we can benefit from an act that is even more transparent than the one we currently have, despite the fact that the current legislation is already quiteadvanced if we compare it to the election laws of many other jurisdictions. However, since there should be no limitations on transparency in a society, we always want toenhance this transparency and have legislation that strengthens the accountability obligation. We are presenting this bill to you today for the consideration of thisparliamentary committee.

The Chair: Mr. Minister, thank you very much. Do your colleagues have anything they wish to add now?

Mr. Don Boudria: No, Mr. Chairman. The experts accompanying me will help us provide answers, particularly technical answers, with your permission.

I apologize, Mr. Chairman, but I have been told that I neglected to raise one issue.

[English]

I mentioned the $1,000 limit per constituency. Colleagues from more than one party have approached me about that limit. Many people have said that amount mightbe okay, but could it be done in more than one riding? Could it be multiplied? If the committee has any feelings on that I would welcome hearing them. If there's someunanimity in the committee I'd be willing to consider that.

One of the problems about such a case, should it occur, is that the committee wouldn't be able to put that itself because it would result automatically in a chargeagainst the Crown because every political contribution results in a tax receipt. However, a written report would enable me to put a report-stage amendment.

But I want to tread carefully and only address something if such a change is warranted, hopefully with the unanimous support of the committee. I don't want tocreate something here that undermines the principles of transparency we have in the bill.

(1135)

The Chair: Thank you, Minister.

As you heard earlier, we're going to have an extended set of public hearings into this matter and try to involve all parties. As you said, we could deal with a matterlike that through a recommendation, or something of that sort.

We have Mr. Gauthier and Ted White, who are not normally here. My intention is to proceed as we usually do.

Minister, if you could listen to this as well I'd be grateful.

Typically we have five-minute exchanges. Minister, don't be surprised--I know you're very interested in this matter--if I cut you off, because I believe the membersshould get their five minutes. Usually we go through the parties. We begin with the Canadian Alliance, go to this side, come back, and so on every five minutes. Then wego around again. If we do it in a reasonable way, colleagues, you can get at least two kicks at the can.

At the moment the list I have is Ted White, Joe Jordan, Michel Guimond, Geoff Regan, Dick Proctor, and Michel Gauthier. At that point we would come back to theCanadian Alliance.

Ted White.

Mr. Ted White (North Vancouver, Canadian Alliance): Thank you, Mr. Chair.

This bill is actually all about politicians spending money on themselves. It's no secret, as the minister mentioned, that the Canadian Alliance is opposed to the bill. Infact, we think the minister must be consulting more with himself than with people outside of political parties if he thinks there's widespread support.

The majority of voters would contend that political parties spend hard-earned tax dollars on themselves. This bill will not stop a party in power from blowing millionsof tax dollars on pre-election give-aways. It won't stop them from wasting taxpayers' money on frivolous projects like the gun registry. It won't stop regional subsidies.It won't stop job creation programs or the handing out of contracts and appointments to friends. So a huge number of problems the public sees won't be addressed bythis bill at all.

What it will do is award large amounts of taxpayers' money to political parties--almost $8 million, I think, to the Liberal Party alone. That is a cause for concern. In

the Canadian Alliance we would be happy to continue with the present formula, which allows us to raise money mostly from individual supporters, the people we purportto represent. So I'd just like to get that on the table right up front here.

I have some technical questions for the minister, and just want to let him know that we will continue to fight this bill as we go along.

Under clause 23, proposed paragraph 403.34(2)(d), it talks about an unpaid claim that can be removed from the contributor records if it's been written off by thecreditor. To use the exact words, it says has been written off by the creditor as an uncollectable debt in accordance with the creditor's normal accounting practices.

Could this paragraph not provide a loophole for a supporter to provide a substantial loan and then write it off as uncollectable after 18 months, thereby turning theso-called uncollectable loan into a large donation and an unauthorized contribution? Who determines, for example, the creditor's normal accounting practices and howthat would apply to an individual who gave a loan to the party?

Under clause 51, there's a provision allowing the official agent--it's a change from the present Elections Act--to designate any person to receive the rebate. Does thatliterally mean any person?

Mr. Don Boudria: Would the member repeat that last question? I missed part of it, and I apologize.


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Mr. Ted White: In clause 51, proposed subsection 468(2), there is a provision allowing the official agent to appoint anybody to receive the rebate. I'd just like toknow whether that literally means any person, including where the agent gave it to himself, and there being no recourse if an agent just decided to hand it to a friend ora relative. It just seems to me there could be a problem there.

I'll stop there until the second round.

The Chair: Please remember, you can always ask, and we have an excellent opportunity now for a written response. I'm sure the minister and his staff would submita written response.

Minister.

Mr. Don Boudria: Thank you.

Mr. Chairman, that's a good suggestion. With the help of the officials I could supplement what I'm going to say today with additional written material to be supplied tothe chair.

On the issue of whether it's the case that--if I gather, the question would be roughly like this--limits could be evaded by extending a loan to a candidate and thendeclaring the loan uncollectable, then of course that would not be deemed to be a contribution. That's an offence under the act. An unpaid loan would be reported in thecandidate's return. Eighteen months after polling day, if it remains unpaid, it would be deemed to be a contribution made as of the day the loan was obtained underproposed subsection 450(1) as amended by Bill C-24. The problem right now is that if the loan is unpaid, there is no measure to count it as a contribution, so thisenhances what we have now and does not subtract from what we have now.

For the loan not to be deemed a contribution, it has to be written off by the creditor as an uncollectable debt in accordance with the creditor's normal accountingpractices. Furthermore, the auditor would of course have to put in his report that this is actually the case, and he or she has to satisfy the chief electoral officer. Whetherthe write-off by the creditor respects his normal accounting practice is largely a question of fact. A creditor who writes off a loan contrary to his normal accountingpractice could be found to have breached the anti-avoidance rule within the proposed section 405 we have put there, because that's also there.

Now, on the official agent appointing anyone to receive a rebate, Mr. Chairman, what that's meant to do is if a candidate borrows $10,000 from the bank to financehis election campaign and the person has no collateral, the person could say if he so wished that his rebate would be assigned to the bank so the bank would be sure ofgetting repaid. For the other person who lends money, that doesn't mean that it goes outside the accounting principle; it's just the authority for the chief electoral officerto issue the cheque to a third party, but it does not exempt it from the reporting requirement.

(1140)

The Chair: Minister, we would appreciate any follow-up you think is appropriate to that, because it's a good line of questioning.

Mr. Don Boudria: Sorry, your questions are kind of--

The Chair: No, we do understand that. We do have this little convention here that enables members to become involved. The other way, two or three membersdominate.

Joe Jordan.

Mr. Joe Jordan (LeedsGrenville, Lib.): Thank you, Mr. Chair, and through you to the minister. Don, I think it's safe to say that this particular piece of legislation is something that has gotten members' attention. I think it's perfectly understandable, because itaffects the fundraising aspect of what we do for a living. It's different from virtually any other piece of legislation. For the first time, I think, members at large areconcerned about something that's before this committee, because we normally operate under the radar screen, but we are getting a lot of MPs talking to us about it.

I forgot we were on TV until Mr. White's preamble, and I would like to say that I support the direction you're going with this. I know it's complicated, but I think it's abit of a stretch for someone to try to make the argument that they don't support the bill because the bill isn't going to change the policies of the government. The searchfor that sort of panacea might be a little misguided. I'm reminded of the Alliance environment critic who said, when asked about his position on Kyoto, Well, it willcertainly help our fundraising.

I think that's one of the reasons we have a growing disconnect. The policy issues and decisions of a government will be, if needed to be, improved by bridging thatgap, and bringing transparency to the funding is a major step towards that. But that being said, there are complications, and there is concern out there, so I think wehave to be careful we get good information out.

I have two quick questions. One, if you look at Quebec--and Quebec is a good model, because they've implemented similar restrictions--my understanding, andcorrect me if I'm wrong, is that just over 5% of the donations exceed the $2,000 limit. Did you have any discussions with the chief financial officer of Quebec?

My concern is with the optic of the $10,000, because in my riding I generally spend maybe $40,000 on an election, and if one person can give me a quarter of what Ispend--not that I expect that to happen--I would argue that maybe that's too high, because I don't think too many people are going to hit that. It just looks bad if whatwe're trying to do is to take out the perception that there's a connection between donations and subsequent policy.

The second one is a technical question. I haven't gone through the bill in as much detail as I need to--I will be doing that in the next couple of weeks--but it looks tome as if what we're talking about here is technically an amendment to the Canada Elections Act. When you look at penalties, it's clear to me and it's outlined here thatwe are bringing in penalties for people who accept donations that contravene this amendment.

Where or what is the linkage or structure for penalties to people who give too much? What I'm asking you is whether it is indeed better to give than to receive. Ifwe're amending the existing act, there's nothing in the existing act that limits what you give, because you can only give and be receipted for so much.

(1145)

The Chair: As complicated as those questions are, you have about two minutes.

Mr. Don Boudria: As to the size of donations, as I said, they range right now, at least in the provincial structures, from $18,750--that's the highest one, inAlberta--to $3,000, which is the Quebec model. But $3,000 at the time it was put together is roughly $10,000 now.


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I agree with our colleague, who says certainly that's much higher than the normal contribution. If colleagues are willing to make that somewhat lower, I'm willing toaccept that. But we have to buttress that against the argument we just heard from Mr. White, who's telling us that anything that causes a loss of revenue and a parallelincrease in costs to the taxpayers is something he disfavours. In a general way I'm open to amendments, but I would invite colleagues to bear in mind both arguments,and one's a direct opposite of the other.

On the issue of who's responsible, the donor or the recipient, if there's an infraction in terms of the size of the donation, of course both of them are covered in this. Ican easily identify one scenario where one would be responsible and another where it would be the other.

First, let's say a corporation--or a union, it doesn't matter--deliberately gives $1,000 in the eastern part of the country and $1,000 in the western part of the countryat the same time. They know that the aggregate limit is $1,000, yet they've given $2,000. They know that two is greater than one, so obviously this is, at least primafacie, their fault.

On the other hand, if one candidate receives $2,000 and they know the limit is $1,000, I would suggest that it's more than likely that both of them are at faultbecause both of them should have known that $2,000 is greater than $1,000.

You can see the examples there, but yes, they're both covered in the act.

The Chair: Michel Gauthier, Jacques Saada, Dick Proctor.

[Translation]

Mr. Michel Gauthier (Roberval, BQ): Thank you, Mr. Chairman.

To begin with, I would like to say to the minister that we appreciate the efforts that are being made to put political party financing on a sounder basis. We have beentalking about this for a long time, and our basic objectives have been met. We will be contributing.

I essentially have three questions for the minister, and I would appreciate it if he could answer them all together.

Before the 1997 electionI have checked the datesand before the 2000 election, on May 7, 1997, at the Howard Johnson Hotel on Sherbrooke Street in Montreal,and on November 4 and 5, 2000, at the Marriott Hotel on the same street, information sessions were held at which the chief electoral officer tried to explain to us howwe were expected to deal with upcoming election expenses. Is the same thing done in Ontario?

We were then told that when we had to pay people or reimburse them for expenses such as gas during an election campaign , the most practical way from everyone'sstandpoint was to pay the estimated cost and then if those people wanted to make a contribution to a political party in a transparent way, that contribution would beindicated just like all the others.

The Liberal and Bloc Qubcois agents asked questions about that. The Office of the Chief Electoral Officer answered that this was the clearest and most transparentway of handling the situation. That is what is done in Quebec. I would like to know if the same thing is done in Ontario and if the Elections Act is interpreted the sameway.

Second, I assume that the purpose of the bill you are sponsoring is to define contributions and prevent inflated estimates. However, can you confirm that yourintention is not to prevent someone who had provided professional services in a given riding from contributing to the campaign fund, without being accused of makingwhat is called an in-and-out contribution?

If, for example, under the Elections Act, I have to reimburse $50 of gas money to someone who comes to Chibougamau to help me during an election campaign, Icannot consider that volunteering and I have to declare the amount.

Will your bill still enable someone who travelled 500 kilometres from home to help a candidate in Chibougamau and who received $50 in gas money to do so withoutbeing penalized or accused of anything or prohibited from perhaps making a contribution of $50 or $100 to the campaign fund? In an effort to prevent gross abuses suchas donations of $50,000 or more, it is important not to prevent people from being able to contribute $50 or $100 to our campaigns.

Finally, I would like to raise the issue of professional services. There was discussion recently about graphic art services provided in the riding of Roberval. In the caseof people who design tickets for fundraising activities or election advertising, the legislation makes it illegal to consider their work as volunteer services, and the workdone has to be not only declared but also paid for. Do you intend to keep that provision in the new act?

Thank you.

(1150)

[English]

The Chair: Mr. Boudria.

[Translation]

Mr. Don Boudria: These issues are not dealt with in the legislation, but they are very important.

First of all, were these information sessions held? I do not know. My first election was many years ago. Of course, I do not usually go to this type of informationsession, since they are generally for candidates running for the first time.

There is nothing right now in the bill about this, but Mr. Gauthier is raising a very important point. The way I understand the current legislationI am not a lawyerand certainly not an expert on the Elections Act, even though I have been involved in ten electionsif someone provides a professional service, not something that is outof the ordinary for that person but rather something that he or she does professionally, the service has a real monetary value. Under the current legislation, that valuehas to be calculated and taken into account. Otherwise, the candidate is accepting free services, which is against the Elections Act.

A very interesting question, which Mr. Kingsley addressed yesterday in an interview with Mr. Newman on Newsworld, I believe, is whether that same person should beprohibited from making a donation to a political party. I know that a recommendation was made to that effect. Does the fact that some people are allowed to makecontributions and others are not contravene the Charter? I do not know, but that would be an interesting matter for the committee to examine.

It is very clear in my mind that it would not be illegal right now for someone who was paid for professional services to make a political contribution of a similaramount, whether it was lower or higher.

[English]

The Chair: Thank you, Minister.

Again, I apologize, but the committee believes that it will make a difference if we can get the members in. So it's Jacques Saada, Dick Proctor, Geoff Regan, Ted


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White, and Carolyn Parrish.

[Translation]

Mr. Jacques Saada : Thank you, Mr. Chairman.

I would first like to sincerely thank the minister and his team, since we have been working together on this bill for some time, and I have many more questions thananswers, given that the questions are popping up faster than the answers can be given.

Minister, you talked about transparency. Right now, a corporate contribution must be reported, and the public knows the name of the corporation and the amount ofthe donation. If the idea is to amend the act so that employees of the corporation can contribute, some provisions of Bill C-24 block that possibility, but not all anglescan be covered.

As a result, the published contribution lists will show the name of the individual but there will be no visible link between that person and the corporation for which heor she works. Does that make the process more transparent?

Second, you rightly spoke of the need to limit and even eliminate influence and also the perception of influence. And the bill maintains the $10,000 limit for individualcontributions. In order for people to be able to contribute $10,000 net, they have to have earned about $20,000 in gross income. In your opinion, will that measurereduce the perception of influence?

At second reading, I made a speech in which I very clearly stated that I fully support the principle of this bill. I would like to reiterate that support very clearly heretoday.

I do have a number of concerns. Since we have very little time, I will not be able to go into detail, of course, and ask the 328 questions that I still would have for youtoday, but there are two things I would like to raise. The more ground a political party has to cover, the higher the ordinary expenses will be, naturally. On the basis thatthe rebate of $1.50 per elector is calculated using the number of votes obtained during the previous election, will the fact that geography is ignored not penalize partieswith national representation as opposed to those that might be concentrated in one region?

My last point is more of a comment than a question. With all due respect, Minister, you have opened the door to a possible amendment on contribution limits bysaying as long as there is unanimity. In my opinion, the issue of whether there is unanimity or not does not at all affect the validity of the arguments or the weight ofthe recommendations that will be presented.

Thank you very much.

(1155)

[English]

The Chair: Minister.

[Translation]

Mr. Don Boudria: In terms of transparency, we need to keep in mind that Bill C-2 contained a measure whereby a numbered company could make a contribution.That gave us absolutely no information. Today a numbered company has to provide the name of a director. The name of the individual is nearly always much moretransparent than what we had before.

If it is decided, however, that the $10,000 limit is to high, I would ask you, as I said earlier, to make a recommendation to me to reduce it. But please use caution,since we do not want to leave political parties with no source of income at all.

The issue of regional parties is a very interesting one. I wonder whether there should be a supplement of some typeif that is the issueor, to put it another way, a

reduced amountin cases where a political party has run candidates in more than one province, in more than two provinces or in a certain number of provinces. That iswhat it comes down to, in fact.

We could also go the other way and say that if a political party has run candidates in more than 25% of the ridings, why would it not get 25% of the funding? It is thesame question, from the other perspective.

The problem, it seems to me, is that this would create a penalty. I think that one could argue that the votes of some are considered more equal than the votes ofothers, since the amount provided is $1.50 multiplied by the number of votes. It could be said that some political parties are penalized because they are based in acertain region of the country, and it might also be argued that this measure could prevent new political parties from being created. There would be at least those tworisks, I believe.

(1200)

[English]

The Chair: Dick Proctor, Geoff Regan, Ted White, Carolyn Parrish, and Michel Guimond.

Mr. Dick Proctor (Palliser, NDP): Thank you, Mr. Chair.

Mr. Minister, thanks for your presentation.

Just very briefly, the New Democratic Party supports this legislation in principle. However, we agree with what Tom Kent enunciated recently, that this bill could bestrengthened and should not be weakened. We will be guided by this as we proceed.

I have three questions I'd like to put. The first one is on the $10,000 maximum contribution per individual per year. I agree with your point that the $3,000 wouldhave become $10,000 over the last 25 years in Quebec, but you have failed to address the even more important point that it's $10,000 per year per party, as thelegislation is written. So somebody could conceivably give $10,000 a year to every registered party in the country, or to all five. If you want to reduce the perception ofthe undue influence of money, then this is one thing you should be looking at. It should be an aggregate number. You have an aggregate number in there on theindividual $1,000 trade union and business donations. I think this definitely needs to be looked at.

On my second point, I'd be interested in your response on the $1,000, which you have now said could become $2,000 under certain unique circumstances. I thinkwe're all aware that a long time ago the United States banned corporation and trade union donations to political parties. In The New York Timeslast week, it wasreported that more than $1 billion in combined soft and hard money was raised for the 2002 presidential election campaign. So I'm wondering if you're open to ideasabout other ways in which the money could be contributed. I note in passing that this was not in the original proposals floated before Christmas, but seemed to be addedwhen some Liberal caucus members expressed some concern about it.


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My third and final point is on the $1.50 per vote per year. As I understand it, there's nothing in the bill dealing with indexation now, yet we have contributions byindividuals that will be indexed. I would submit to you that we will not come back to address this for many, many years, if not decades, and I'm thus wondering aboutindexing, so that this money will increase as time goes along.

The Chair: You have about two and a half minutes, Minister.

Mr. Don Boudria: Mr. Chairman, the first point is an interesting suggestion. In other words, should there be a two-stage limit, with a limit and an aggregate limit aswell? I must tell you, I hadn't even thought of that. If the committee has some suggestions in this regard, I'd be willing to hear them too.

That being said, though, please remember that there's no law right now. Find me an individual who gives $10,000 to each of the five political parties. I don't evenknow if there's one such person in Canada right now. There's no rule now, so why should having a rule dramatically multiply the number of people doing this? I suspect

this person doesn't even exist, so we shouldn't be overly worked up about it either.

In the United States, of course, there are these things called PACs, or political action committees, which we in Canada call third parties. Mr. Chairman, I can't talkabout it too much, but you may know that there's currently an action before the court in which I, as minister responsible, am one of the litigants. It is called the Harpercase, which has to do precisely with what you were talking about, and which the government is appealing. I can confirm that we have sought leave to appeal to ensurethat there can't be outside funding other than what's permitted in the conditions set in Bill C-2, which was a previous amendment to the Elections Act.

On the issue of indexation, I don't agree that these bills are reviewed rarely. I've been the minister now for two elections, and I think this is my third bill since I'vebeen minister. So there are bills every two or three years. There's a bill involving the Elections Act. The other concern I have is that we're trying this for the first time. Asmuch as I do not agree with the concerns expressed by Mr. White, why don't we just do this before evaluating whether the numbers should be increased, decreased, oreven indexed? I think it's a little soon to put indexing in the measure.

(1205)

The Chair: Okay.

Dick, you have time for a comment, if you'd like.

Mr. Dick Proctor: No, that's okay, but I will have some comments--

The Chair: So it's Geoff Regan, Ted White, Carolyn Parrish, Michel Guimond, and Marlene Catterall.

Mr. Geoff Regan (Halifax West, Lib.): Thank you, Mr. Chairman.

I welcome the minister to our committee. It's nice to have you here today.

Following on this question of indexation, another item that isn't indexed, as I recall, is the amount provided for auditors in the bill. I assume your answer would be thesame to that question--the $1,500 limit on public funding for auditors. Is that fair? Of course, every year each riding association would have to have an auditor, andafter an election you have an auditor, and so forth.

Mr. Don Boudria: I may have missed part of the question. I just want to remind colleagues that the amount for the auditors had been frozen for about 15 years. InBill C-2, which I proposed, I believe in 1999, we doubled the amount our auditors would be reimbursed.

It was getting more and more difficult to find an auditor willing to do this. Essentially, they were doing charity work by auditing the books of candidates. I think whatwe had then was $750. We doubled that amount in Bill C-2.

So we're not increasing it in this measure. It was doubled only three years ago.

Mr. Geoff Regan: I guess the question is why do they have to play catch-up in that way? Why not have the indexation built into the process so you don't have toworry about it later? That's the concern, I guess.

I want to ask you also about the current level of public funding for local parties. Maybe you could speak about that for a few minutes.

Mr. Don Boudria: That's an interesting subject. Right now--

The Chair: Can I intervene? I don't very often, but I would be very interested in any rough estimate on the extent, in total, of public funding that you estimate in thepresent system, Minister.

Mr. Don Boudria: The present system is a little over 60%. This would bring it up to over 80%. That's the short answer.

The Chair: Geoff.

Mr. Geoff Regan: That's a quick answer, a little quicker than I expected.

One of the concerns some of the members and our colleagues seem to have when they go through this bill is the burden it places on local riding associations in termsof paperwork, financial reporting every year, and all those things. Should we be concerned about that part of this bill?


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Mr. Don Boudria: Well, it's an interesting question.

As I said in the beginning, both you and I, Mr. Chairman, served as provincial members in the exact same riding we're representing federally. In my own provincialriding, my provincial counterpart--same party as me, and most of the members of his executive are the same people--must by law file papers and have an auditor. Andwe must do absolutely nothing.

Surely there's a discrepancy between the two. Surely, if they're smart enough to be able to do all these things, the exact same people doing it for me are no lesssmart. They're the same people. So I'm sure they're able to do all these things; they're doing it already.

I'll give the case of my own riding association. Because there are no auditing requirements, every year, at the last meeting of the executive, we appoint two membersof the executive to audit the treasurer and to make an auditor's report at the annual meeting. Then we make our financial statement publicly. There's no legalrequirement; there's this vacuum. So we create our own make-believe law in order to give public accountability, because there isn't a real law in that regard. But myprovincial counterpart does all this by law anyway. So I think it can be done.

There are so many provinces that have variations of that. I think we've proven time and time again that it can be done. I know it's going to be a little bit more work,

that's true. I accept that. But these are donations. The donations are made by the public. We wouldn't tolerate a charity not having the proper accounting. Why shouldwe tolerate it of ourselves, I ask rhetorically?

The Chair: Thank you.

Ted White, Carolyn Parrish, Michel Guimond, Marlene Catterall, Dick Proctor, and Joe Jordan.

Mr. Ted White: Thank you, Mr. Chair.

Just on the issue of auditor fees, I think I agree with Mr. Regan. I'm not even sure, frankly, that $1,500 is market rate. I don't know how the government calculatedthat, but I would think most auditors want much more than that to do complex audits.

Here are my questions for the second round. Did the government consider any funding formulas other than the one that's chosen--for example, a formula based onthe number of registered electoral districts that a party manages? If it did consider other methods, what were they, and why were they discounted?

Secondly, what's the estimated total cost? What's the government's estimate of total cost to run this new system in its first year, including the additional costs forElections Canada to administer the proposed new registration and reporting system?

Thirdly, the bill proposes that a candidate should receive an expenses rebate if the percentage of votes obtained in the last election reaches 10%. That figure hasbeen changed from 15%. Why did the government choose 10%? Why not 5%--or 0%, for that matter?

Finally, the minister spent some time talking about the limits on the amount that can be spent on nomination races, and that this would be helpful to womencandidates and maybe other disadvantaged candidates.

I'd like to say that in fact, with the new reporting and registration requirements, including the need for auditors and official agents, this very complex process coulddiscourage disadvantaged candidates from going ahead. My reading of the provisions suggests that one would need a pretty high degree of sophistication and a lot ofcontact in the business community to be able to set up these mechanisms to be able to report and manage a nomination race properly. So I would just like to hear theminister's comments on how he thinks that very complex system is going to help disadvantaged candidates.

(1210)

Mr. Don Boudria: Insofar as the complexity is concerned, someone running for municipal council in Champlain Township, in my riding, already has to do that,already has to provide all the financial accounting to run for deputy reeve. If that threshold can be satisfied, it's hard for me to imagine that someone running forParliament could not do that, and I don't think that will discourage candidates from minorities, women--not that women are a minority, of course--and others.

I believe that anything that increases the transparency, that makes it such that you don't have to have either my age, my gender, or my haircut to be able to win, isadvantageous for society generally.

On the 15% to 10%, the reason that was changed is recognition of the fact that there are five political parties in Parliament now. When there were two, sometimestwo and a half, and sometimes three political parties in the House of Commons, it was quite common to be the candidate of a major political party--a very, very highthreshold. In other words, you're not contributing to something that doesn't do anything, arguably--although democracy always does something--and that 15%threshold would satisfy that almost all the time. I don't think it does with the five-party system any more. I think this measure tries to address that issue at the sametime.

I had five opponents in the last election in my riding. I don't think one of them got their rebate back--not one, not even the party of the official opposition in theHouse of Commons. I don't think anybody in my riding has ever had a rebate since 1988, any of my opposition counterparts. That's a bit of a long time.

It was part of the debates in the election campaigns in my own constituency, how unfair this was. Anyway, I believe there is something to be said for that, and I thinkit is meritorious.

In terms of the start-up costs, $2.7 million is what it's going to cost Elections Canada, in our estimation. This is based on the parallel systems existing at theprovincial level, which it costs about $3 million a year to administer.

The Chair: Okay.

Mr. Ted White: What about other funding formulas?

Mr. Don Boudria: No, there are no other funding formulas. There are essentially two funding formulas: one which is the existing formula; and the other one, toreduce the existing formula and top it up with public dollars.

(1215)

The Chair: Carolyn Parrish, then Michel Guimond, Marlene Catterall, Dick Proctor, Joe Jordan, and we'll be getting to Jacques Saada and others.


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Mrs. Carolyn Parrish (Mississauga Centre, Lib.): I would like to preface my remarks with the fact that I wholeheartedly support a bill such as this one, and I alsohope our committee will be given the leeway we had on the code of conduct bill to adjust it.

Secondly, I want to agree with my colleague opposite--I can't remember who it was--that the $10,000 limit for individuals is ridiculous. There are individuals who caneasily give $10,000, and it's been demonstrated by industry people. I think the limit should be $1,000 for everybody, and then perhaps look at allowing corporations togive $1,000 maybe 10 times. But the thing is all skewed, in my opinion.

The thing that upsets me the most is this idea of giving half the previous spending limit in a nomination. I just want to walk you through what would have happenedin 1992 in my nomination.

The spending limit for my riding, which was the largest in Canada, was $93,000. So if all six candidates had been allowed to spend $45,000 each, we would havespent $270,000 in that riding, over six candidates, to reach 15,000 people, instead of 250,000.

So I think we need to look at a system based on the number of party members signed up in the last election. Perhaps that would be a safer way. Or reduce it greatly.This is going to take a lot of work, in my opinion. I did spend $45,000 in that nomination, because the spending was rampant, and I had to keep up to win that

nomination. I also lost $60,000 in wages, because it took me a year to win it, so there's $100,000.

But this limit is not going to do what you intend it to do. I hope you look at it again and allow us to look at it again.

Mr. Don Boudria: On the issue of going by party members, I'm a little concerned if we have the machine of Parliament--that is, Elections Canada--being involved tothat extent in party memberships. Perhaps a reduction in the percentage would be a better way.

I've suggested you might want to look at something like 25%, but please be aware that we have to have a formula that is going to work for as many people aspossible, and if you reduce the number too low, it may be challenging for some, because of a lot of expenditures that people have, particularly in rural areas and so on.So maybe just an overall reduction would be appropriate. As I say, I'm okay with that, providing it reflects that.

On the issue of the latitude of the amendments, I think the importance is to keep the transparency--Mr. Proctor has even talked about increasing it, and that's okaytoo, but don't reduce it--to ensure that this business of the banning of corporate and union contributions of political parties is maintained. That's very important. I don'tthink we can play with that. I think that's the essence of the bill, and we must have it.

There is a further complication, though, that many amendments you would like may involve royal recommendation, so you may not even be able to constitutionallyput them forward. But as I said, and I don't know whether Mrs. Parrish had arrived when I said it, if there are some of those, I would welcome them by way of a writtenreport that I could then use to make amendments at report stage later on if there is a constitutional impediment to the committee putting them forward itself.

The Chair: Carolyn Parrish.

Mrs. Carolyn Parrish: On the idea of the limits on nominations, I'm a full believer--and I think the Alliance Party will be thrilled to hear this--that we should go to theAmerican system for choosing candidates. We shouldn't have it the way it is. We should have people signed up as members and have preliminary selections. It's acompletely unworkable situation.

There are parties--I don't think the Liberals would do this--that could, if you set the limit at 25%, run 15 or 20 candidates, stir it up and purposely have such anoutrageous nomination that the riding would be barraged with Liberal material and candidates. There are many ways around this, and I just wish it were completely outof it and we could look at a better way of selecting candidates.

(1220)

The Chair: We have ten seconds, if you want to comment or if you just want to shake your head.

Mrs. Carolyn Parrish: Shake your head.

The Chair: Okay, very good.

Before I go to Michel Guimond, just to give some sense to what we're discussing for the people watching this, we are trying to deal with an extraordinarily variedcountry. We have one riding that has fewer than 30,000 constituents and occupies 20% of the country--that's 20% of the country. At the time, unless I'm mistaken,Carolyn Parrish's riding was over a quarter of a million people. So we're trying to deal with these matters.

Michel Guimond.

[Translation]

Mr. Michel Guimond: Thank you, Mr. Chairman.

Mr. Boudria, thank you for appearing before us. I must say that it is always sweet music to my ears to hear you praise the political financing system in Quebec.

Mr. Don Boudria: Because it is a good system.

Mr. Michel Guimond: Yes, because it is a good system. Especially since the premier who was responsible for cleaning up the election financing system was RenLvesque. I am sure, Minister, that in the speeches you will be making across Canada about this issue, you will regularly be citing the legacy left to us by RenLvesque.

I have three specific questions.

Bill C-24 stipulates that only individuals, citizens and permanent residents will henceforth be allowed to contribute financially to parties, candidates, ridingassociations, leadership contestants and nomination candidates. The Quebec statute refers to electors. Why was the term individuals used instead of electors? That ismy first question.

Second, we know that corporate contributions are limited to $1,000...


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Mr. Don Boudria: At the local level.

Mr. Michel Guimond: ...at the local level. I would like you to comment on the following situation. Does that mean that a large Canadian bank, such as the RoyalBank of Canada, which has 650 branches across Canada, could make 650 contributions at the local level, which would amount to a contribution of $650,000?

Mr. Don Boudria: No, no.

Mr. Michel Guimond: Third, the Chief Electoral Officer, Mr. Kingsley, appeared before us. In his report on the study of the elections in 2000, where he mentionedthat he was going to suggest some improvements, for instance to the official agents' reports. Mr. Kingsley suggested, on the issue of publicizing contributions, that thethreshhold for making contributions public be raised from $100 to $200. In other words, under $200, no contribution would have to be made public. By public, Imean...

Mr. Don Boudria :Transparency.

Mr. Michel Guimond :The term publicity should not be taken literally, it should be understood to mean that the names of those who contribute $200 or moreshould be published. Do you think that publishing the names of those who contribute $200 or more, rather than $100 or more, would improve the transparency in thisprocess?

Personally, I expressed some serious reservations to the chief electoral officer, and I stand by these reservations here before you.

Mr. Don Boudria: In the first case, I consult my advisors. But I am told that s ince Bill C-2, this will go from $100 to $200, as Mr. Kingsley recommended. Thus, it isalready done.

With regard to the Royal Bank of Canada, as I said in my speech at the beginningperhaps Mr. Guimond had not yet arrived then because, of course, we all havemany commitments this would mean, in fact, that if the Royal Bank, and I refer to the example he used, wanted to contribute to the maximum and distribute its

contribution among all the candidates in the country, it would give about $1.25 per candidate, because $1,000 is the maximum, the aggregate, it is the absolutemaximum for the whole country. Now, this would average out to about $1.25 per riding.

(1225)

[English]

The Chair: It's $1.60, not $1.50.

[Translation]

Mr. Michel Guimond: I understand this very well, Mr. Minister, but with regard to branch number 122...

Mr. Don Boudria: No, this means the corporate entity. This absolutely does not mean...

Mr. Michel Guimond: In that case, the Royal Bank could simply have each of its branch managers contribute $1,000.

Mr. Don Boudria: No, this is impossible. Of course, there is a provision to cover this loophole. We could not maintain that every bank manager is an individual andgive each one a premium. Besides, this would be illegal. Like any other illegal act, this is illegal. Therefore, it is not legal.

Now let us deal with the choice of the term individuals rather than voters. When a bill is drafted, especially a federal bill, under the Canadian Charter of Rights andFreedoms, it must pass all the tests of the Department of Justice to ensure that it complies with the charter's requirements. The term used meets the charter'srequirements, whereas there was a great deal of concern that the other term would not meet the requirements, or not meet them as fully. Thus, we used the term thatbest meets the requirements, pursuant to the legal advice we received.

Mr. Michel Guimond: Yes, but would you agree with me, Mr. Minister, that a permanent resident is not necessarily qualified to vote?

Mr. Don Boudria: Of course.

Mr. Michel Guimond: Thus, it is recognized that a permanent resident can contribute to an electoral campaign even though he is not entitled to vote? Would it nothave been preferable to specify that this means voters?

[English]

The Chair: Make them very short answers.

[Translation]

Mr. Don Boudria: Once again, I am following the advice we received with regard to what we should do. Besides, it is true that permanent residents can participate inelections but cannot vote; but several political parties give them the right to participate in choosing candidates; and so they participate in the exercise of democracy.


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[English]

The Chair: Marlene Catterall, then Dick Proctor, Joe Jordan, and Jacques Saada.

Ms. Marlene Catterall (Ottawa WestNepean, Lib.): Thank you, Mr. Chair.

To our witness, I really welcome this initiative to make the whole business, especially the millions of dollars that are contributed to local riding associations, moretransparent and accountable to Canadians. They are subsidized by Canadian taxpayers, so they have a right to know where their money is going and how it's beingspent.

I want to come back to the limit on nomination expenses, and thank you for including this in the legislation.

As you may know, it was the Liberal women's caucus and members of our party who got an amendment to our constitution as a party, making us, as far as I know,the only party that has a mandated limit on nomination expenses, which was in effect in the last election campaign. So I'm pleased to see it in legislation, because itdoes equalize opportunities for participation in the public process.

You mentioned you had some concerns about how a lower limit might affect people who wanted to run for nomination in a large, rural, spread-out riding. Doesn't theelection expense legislation already take care of this by recognizing different kinds of ridings and upping the amount you can spend in an election to recognize distancesneeding to be travelled and so on? So whatever limit we put on, whatever percentage it is, it's already a percentage of an amount that takes that factor intoconsideration. I think that's the case. If it's not, I'm sure you can let me know.

I would like to know, however, if the minister has done any research on what has been spent on nominations, how much of a factor a larger riding is, and if you have,if you could share that with the committee, it would be helpful.

Mr. Don Boudria: First of all, it is true that the personal expenses of the candidate are excluded. They're excluded in an election, and they would be excluded whenthe calculation of expenses is made for the nomination process--same thing. However, that doesn't take into account the fact that we have some constituencies inCanada that have a large geography. Of course, when candidates travel, their personal expenses are excluded, but the costs of having to rent a hall in 16 differentcommunities are not. Those are not personal expenses like paying for your hotel room and airline ticket.

All these things wouldn't apply in a downtown Toronto, Ottawa, or Vancouver riding, because with one location you can almost walk or at least drive there easilywithin a few minutes. There are still very large expenditures that are made outside of that.

Now, there's a second problem, and the chairman himself identified it a little bit earlier. It's the fact that if you multiply that based on the allowable limit--theallowable limit is based on the number of voters on the preliminary list plus adjustment seven days before the election last time--and that is very small, where you onlyhave 20,000 people, as you do in Nunavut, for instance, you can see how the dollar numbers will get very small.

That's why I'm saying, maybe the 50% is too large, and that's fine; or lower it, and that's fine too. And if you say that maybe instead what we should have is wherethose ridings that qualify for the geographic supplement will have a top-up to compensate for the lower limit, yes, I'd be willing to go along with an idea like that; it'squite a good one as well. I just want to ensure that what we have is reasonable, that in our effort to make things more democratic we don't end up being lessdemocratic.

Yes, I acknowledge that particular suggestion was made to me first by the Women's Liberal Commission and then subsequently of course by my colleagues.

(1230)

The Chair: Marlene.

Ms. Marlene Catterall: I don't know about the structure of other parties, but the Liberal Party certainly has provincial and territorial associations. As far as I know,the legislation does not require them to register and be accountable for any donations they might receive. I wonder if you could provide us with comments on that, laterif not now.

Mr. Don Boudria: They can't. They have to receive it either through the party or their local association. There's nothing in between.

The Chair: Dick Proctor.

Mr. Dick Proctor: Thanks, Chair.

Earlier, Minister, you talked about third-party advertising, indicating that this is under appeal, and the so-called Harper case almost as if the result of the court case isa foregone conclusion. There are people who are saying that what we're considering today, Bill C-24, is totally meaningless without the third-party advertising beingsorted out. My question to you is what happens if and when the court upholds the striking down of the laws, as has happened now?

Mr. Don Boudria: I'll have to be careful because of the sub judicerules. I certainly don't want to jeopardize the case we have before the court. As a matter of fact, Ithink my colleague who's asked me the question probably even shares my view on that particular case; I'm sure he doesn't want that either.

We have essentially based ourselves on the so-called Libman decision of Quebec, in which the Supreme Court in its obiter dictumpretty well gave us the method bywhich third parties could have rules on them. It's based on that decision that we did what we did, and that is why we are very confident. It was a Supreme Courtdecision in the past that gave us the how-to, if you will, Mr. Chairman, and that is the method we have used.

But suppose someone asks me, is it prima facie fair that candidates have limits, must review where they get their money, must review how much they spend, andmust be subject to a very strict limit on how much they spend? Meanwhile, somebody is running a parallel campaign that says no more prime ministers from Quebec--asI heard once--or no more of anybody who votes for Bill C-68 or some such thing, and they are free of any rule whatsoever in order to defeat anybody they want todefeat. Well, I don't think that's normal in a democracy.

Mr. Dick Proctor: I agree.


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Let me just move on. I want to zero in a little on the corporate and trade union limit of $1,000 or $2,000; or, as we heard a few minutes ago, perhaps it should be$10,000. As I said in my earlier round, this is something that seemed to be added on sometime after this piece of legislation became public knowledge. I'm concernedabout these kinds of things, because little loopholes get exploited by smart people, and all of a sudden you have a major problem.

I still believe very strongly in the principle that only persons should contribute to political parties at all levels. My approach...and I haven't thought about it withrespect to Carolyn Parrish's riding; I'm just thinking about it myself. What if there were a slight increase in the $1.50 per vote per year, with that slight increase beingdedicated to the constituency associations and the parties that ran and with it based on the results they received? That might be a way to then eliminate the notion ofcorporate and trade union contributions to riding associations. I wonder what your thoughts are on that.

(1235)

Mr. Don Boudria: First of all, on the issue of when the corporate and union ban appeared, there is no version of the bill that ever had anything else in it.

Of course, I did an extensive tour--I'll call it that--of provincial capitals and consulted with a whole pile of people. Consultations continued even after the bill wasintroduced, and I have here a list of academics I talk to about the bill and so on. I even consulted with the Canadian Labour Congress about the bill. There never was adraft of the bill. No draft of the bill was ever made public without the corporate and union ban, so that did not occur.

Mr. Dick Proctor: Well, we're splitting hairs.

Mr. Don Boudria: On the issue of the subsidy, one problem I see with what our colleague is advocating is if you increase the party subsidy, say, from $1.50 to$1.60, it doesn't matter; that of course is a party subsidy; it has nothing to do with riding associations. It doesn't necessarily do that.

What the minor exception is designed to do is it recognizes that if you're in Cape Breton and a local coal-miner group wants to make a minor donation to the localcandidate, it can still do so. Yet this does not subvert the overall process with respect to political parties because it remains very small and at the local level.

The Chair: Dick Proctor, briefly.

Mr. Dick Proctor: Let me just conclude on that point. I've spoken with Liberal backbenchers who say that if you limit this to $1,000, it's going to be the relevantminister who will receive the $1,000, not the local MP in Kapuskasing or wherever. That's why you're already starting to hear $10,000, that $1,000 isn't enough becausepeople want to receive that. I think we need to look at this very carefully, Mr. Minister.

The Chair: Colleagues, as we know, the minister is responsible for the government side in question period, so we have to be aware of that.

What I propose is this. We've now been around twice. I have Joe Jordan on the list, then Ted White, Jacques Saada, Michel Guimond, then Dick again, and then we'llfinish. I would ask you all to try to be very tight this time, and Minister, I would have to say that you have been much better than the members in this respect.

Joe Jordan.

Mr. Joe Jordan: Through you to the minister, Mr. Chair, there are just a couple of things I'm picking up. I think Mr. Proctor has touched on a larger issue here. If weagree on the objective, we may be looking at a half measure here, and I don't know whether the gain is worth the pain.

I would caution you a little, Dick; you talked about an aggregate. One of my concerns with this bill, and hopefully one of the outcomes, is that we provide a politicalenvironment where ideas aren't linked to money.

If we take my riding as an example, there were eleven debates, and the best politician in the room was the Green Party candidate. But he didn't have the resourcesand he didn't have the machine. I used to take notes when he spoke. So if you go with an aggregate, I think you're going to disadvantage the minor parties, becausewhat you'll get is the government gets the lion's share of the money. So an aggregate might do the opposite of what we're trying to accomplish, and we have to becareful.

(1240)

The other thing is, Minister, you said there aren't a lot of people around who give $5,000 or $10,000 donations. But we want to be careful not to create these people,because if you take away one end and don't close the loophole.... As with the saying that strict governments make for very wise citizens, so maybe we should look at notallowing directors of corporations to give....There may be a constitutional reason for this, but without taking a person's name and occupation and knowing whetherthey're a director of a corporation, then we have to rely on the opposition to try to put Humpty Dumpty together, particularly if you have a company that has instructedof its 23 directors to give $10,000 each. So I guess we're going to have to take our time to go through this, because we have to be very careful to consider all of theseunintended consequences.

My final point is on nominations. With the best int

Documents

House of Commons Committees - HAFF (37-2) - Evidence - Number 031.pdf