PRHA Committee Meeting

STANDING COMMITTEE ON PROCEDURE AND HOUSE AFFAIRS

COMITÉ PERMANENT DE LA PROCÉDURE ET DES AFFAIRES DE LA CHAMBRE

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, June 4, 1998

• 1129

[English]

The Chairman (Mr. Peter Adams (Peterborough, Lib.)): Colleagues, could we begin?

First of all, we're continuing our consideration of the Canada Elections Act. I welcome again Jacques Girard and Janice Vézina from the Office of the Chief Electoral Officer; Peter Julian, representing the NDP; and Lorraine Godin, who is here with the Bloc. We appreciate having you here.

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We were supposed to be considering the technical matters today. I think we have virtually all of the forms—they've been returned—but if your completed form has not been returned, I'd be grateful if you would get it to the clerk or the researcher as soon as you possibly can.

My sense is that we won't get to the technical items until at least our next meeting.

We are now at the bottom of page 11 of the electoral financial issues document. With regard to today's meeting, as we're unavoidably starting late, I wonder if you would consider working late again, because we're looking at extra meetings or evening meetings or things of that type. We normally would finish in an hour's time. Would you consider going until 1 p.m.?

[Translation]

Stéphane Bergeron.

Mr. Stéphane Bergeron (Verchères, BQ): Yes, 1 p.m. or 1:30. As far as I am concerned, we can even continue after 1 p.m.

[English]

Mr. Mac Harb (Ottawa Centre, Lib.): I have an engagement at 12 p.m., for 45 minutes. I can go and come back.

The Chairman: We can cover for that.

[Translation]

Mr. André Harvey (Chicoutimi, PC): Perhaps 12:15?

Mr. Stéphane Bergeron: No later than that?

Mr. Mac Harb: I cannot stay later than 12:30.

[English]

The Chairman: Rey Pagtakhan.

Mr. Rey D. Pagtakhan (Winnipeg North—St. Paul, Lib.): On that point of extension of time, if we can have an agreement, since what we are trying to do is assess whether...and we're not taking any vote, we can sort of agree. If you'd like to excuse yourself because you can't have an extension of time...or even up to the time you leave the proceedings could proceed, and it could be deemed that what is adopted is adopted, and we could proceed with the writing of the report. It would facilitate the completion of the report.

The Chairman: What we're doing is all subject to the drafting of the report, you know.

Mr. Rey Pagtakhan: So they're not voting anyway. In this case you can facilitate.

The Chairman: An evening meeting would suit me fine, but we'd be looking at a fairly long evening meeting. What do members think about Rey's comment?

Peter.

Mr. Peter Julian (Assistant Federal Secretary, New Democratic Party): I think we would prefer having meetings where we can be present.

The Chairman: Okay. Our regular time is 12.30 p.m. Did I hear you say you can't stay beyond 12.30 p.m.?

Mr. Peter Julien: No, unfortunately.

The Chairman: Okay. That's it.

Colleagues, we're at the bottom of page 11, on reporting and disclosure. We'll move along as quickly as we can, but we are going to finish, then, at 12.30 p.m.

Mr. Stéphane Bergeron: Ah, oui?

The Chairman: We are, because two parties can't stay, Stéphane. Sorry about that.

Reporting and disclosure, item number one. Jamie.

Mr. James Robertson (Committee Researcher): A number of these recommendations are fairly technical and interrelated. I think Janice Vézina or Jacques Girard can assist us, but I'll try to give the brief introduction.

Number 1: Currently, under the Elections Act, candidates are required to provide fairly detailed financial information. The requirement on parties, however, is not nearly as extensive. So I think the idea is, for accountability and transparency, to have much more detailed requirements for financial disclosure from the parties. This would be consistent with what is required in most Canadian provinces.

The Chairman: Okay. Is there any discussion of number 1? I understand, for example, that they have this sort of approach in the province of Ontario.

Yes, Lorraine.

[Translation]

Ms. Lorraine Godin (Agent of the Bloc Québécois): The recommendation states that political parties should be required to provide financial statements such as a balance sheet, income statement and a statement of change in financial position, and that generally accepted accounting principles be followed.

Political parties are not-for-profit organizations. The new accounting standards of the CICA provide the consolidation must be taken into account. In other parties, consolidation refers to 301 ridings, while in our case, there are 75 ridings. What is the position of the Chief Electoral Officer on this matter? The work required to consolidate all the assets of the ridings would be huge, because that is not done so far, since, in the past, the CEO did not require financial statements and political parties did not necessarily need to do this.

[English]

The Chairman: Janice.

Ms. Janice Vézina (Director, Election Financing, Elections Canada): I think that's a very good point. I think we'd have to look at this recommendation in the context of what's happening with local associations or what eventually comes to pass in terms of legislation, whether they report on their own as an entity or whether it's funnelled through the party. But it's a very good point.

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[Translation]

Ms. Lorraine Godin: There would be a significant impact on audit and consolidation costs. A significant amount of work would be required. That's why I have some reservations about this. I have nothing against generally accepted accounting principles, because I am an accountant myself, but since political parties are really a special case and are not-for-profit organizations, I think there is a dangerous grey area here.

[English]

The Chairman: Lorraine, would you feel more comfortable if we deleted the part about generally accepted accounting principles and simply talked about the more open and detailed financial statements, and so on?

[Translation]

Ms. Lorraine Godin: Yes, but I think perhaps we should clarify what is meant by "generally accepted accounting principles." We should ask the CICA whether it would be advisable to make some sort of exception for political parties. I would like us to keep the expression "generally accepted accounting principles", but we must first discuss this with the CICA to see whether an exception could be made for political parties regarding consolidation.

[English]

The Chairman: Okay, I think that's a very good point. So in light of that discussion, again we'll have a straw vote.

Marlene Catterall.

Ms. Marlene Catterall (Ottawa West—Nepean, Lib.): It seems to me the national parties, not the riding associations, should be held to at least the same standard as the candidates, as a principle. How we will work that out in the details is something a little different.

The Chairman: Okay. In the light of that discussion, also, those generally in favour of number 1? Those against? I see none against.

[Translation]

Stéphane Bergeron.

Mr. Stéphane Bergeron: I would just like to comment on the answer we were given a few moments ago. We were told that riding associations might be required to provide more detailed returns. Unfortunately or fortunately, I'm not sure which, recommendation number 1 does not refer to that in any way whatsoever, as to whether riding associations will also have to provide detailed financial information.

I would like to know from the representatives of the Office of the Chief Electoral Officer, what degree of transparency will be required from riding associations. Clearly, since the beginning, we have been opposed to recommendations that in some cases provide for some devolution to riding associations, and in other cases, do not. We have opposed that. We prefer a consistent rule.

How do you see this recommendation in light of the answer provided a few moments ago?

The Chairman: Jacques Girard.

Mr. Jacques Girard (Director, Legal Services, Elections Canada): For the most part, I think the recommendation will be seen in light of the decisions that are made here. I too understood, as you emphasized, that there was some reluctance to get involved in the affairs of riding associations and to subject them to disclosure requirements, and so on.

However, I would like to add that some procedures may have to be considered at some point. All sides have said that riding associations are often staffed by volunteers. In this respect, I would point out that in Ontario, for example, public funds are used to subsidize the cost of preparing certain returns. So some precedents have been established at the provincial level.

I think we have to look at the problem as a whole. If committee members conclude that we should not be requiring returns from riding associations, they may have to decide whether or not they want transparency. If we want riding associations not to be subject to any restrictions, perhaps we may have to review candidates' ability to transfer the reimbursement of elections expenses to riding associations, for example, because there's no transparency there whatsoever.

The Chairman: Yes, Stéphane Bergeron.

Mr. Stéphane Bergeron: Mr. Chairman, I would just like to clarify my point, because I was probably one of the people who complained most vigorously about the fact that local agents could be allowed to issue income tax receipts and receive contributions in some cases, but not in others. At that time, I spoke about "variable geometry" transparency. I want to make sure my point is understood. I certainly agree that we could perhaps require riding associations to provide a breakdown of the money they receive and spend, but I don't want some to be required to do so, and others not. That is where we were heading, some would be required to do that, and others would not. That is the first problem.

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The other basic problem is that we must avoid a situation in which riding associations—specifically because they are often staffed by volunteers—are overwhelmed with paperwork and auditing requirements. As we know, in many cases, riding associations cannot afford to hire an auditor. Of course, some associations could, but others could not. Of course, we are in favour of transparency, but the main requirement is that the rules be the same for everyone. In addition, we should not increase the workload of riding associations and make their lives impossible.

The Chairman: Jacques Girard.

Mr. Jacques Girard: I would just like to clarify that in our view, we are not talking about two procedures for parties and riding associations, whereby some would submit returns, and others would not. The principle we have put forward is that once a riding association makes a financial transaction, it must submit a return. If there are no transactions, obviously, there is no return.

Mr. Stéphane Bergeron: But they all make financial transactions.

Mr. Jacques Girard: Some do not. If a party decides that they must not make any, there would be no return. If the party decides they will make them, there will be a return.

Mr. Stéphane Bergeron: Let us take the example of a riding association of the Natural Law Party in our region. I do not even know whether there are any party members. Clearly, in that case there would be no financial transactions. However, a riding association that is in any way active must necessarily make some financial transactions.

Mr. Jacques Girard: There would therefore be a return.

[English]

The Chairman: Colleagues, again, bearing in mind the nature of our discussion, we have some good points here.

Can we move on to page 12, number 2, Jamie, which strikes me as a fairly straightforward item?

Mr. James Robertson: Basically this would allow the Chief Electoral Officer to devise a short-form report that would be allowed to be used by candidates who spend less than 10% of their expense limit, like the tax returns.

The Chairman: Okay, those generally in favour? Opposed? Okay.

Number 3.

Mr. James Robertson: There's apparently an inconsistency. Candidates are required to provide their returns within four months, parties within six months. In some cases Elections Canada can't do reconciliations between the two, because you need both sides of the plate.

In this case the recommendation is that everybody file their returns within four months. There is an advantage to this: the sooner you get your return in, the sooner you can start having it processed in terms of your rebates and reimbursements.

The Chairman: Peter Julian.

Mr. Peter Julian: We would oppose this for the simple reason that often the candidates' returns do have an impact on the registered party's return after an election campaign. So to have the same period doesn't allow that two-month reconciliation, after the candidates have filed their returns, to allow the registered party to finalize the post-election statements.

The Chairman: Stéphane Bergeron.

[Translation]

Mr. Stéphane Bergeron: Mr. Chairman, if the objective is to ensure that the deadline is exactly the same for candidates and for parties, so that the work may be done conscientiously and comprehensively, I would tend to extend the deadline to six months for candidates, rather than reducing it to four months for parties. A four-month deadline for a political party that has to consolidate its statements for all the ridings—in our case the total is 75, but in others, it isn't much higher—seems very short to me.

[English]

The Chairman: Janice, would you care to comment on this? We have some opinions here for you.

Ms. Janice Vézina: If we look at the provincial level, you have Ontario that has six months for both, and in other provinces you have two, three, or four months. The royal commission had proposed three months for both and had said six months was excessive. So there's a range of actions. This is a mid-point.

The Chairman: We have a range of examples existing to draw from in this case.

Ms. Janice Vézina: Yes, exactly.

The Chairman: In the light of that discussion, those generally in favour of number 3? Those against? I see three against.

Number 4.

Mr. James Robertson: Number 4 is tied into a recommendation later on about reimbursement. At present, parties do not file any returns with respect to by-elections; only the candidates do. This says the party would be required to file a return for a by-election. This is tied into reimbursement, which would be on a similar basis that if they got 5% of the votes cast in the by-election, they would be entitled to reimbursement of their expenses on the same basis as during an election.

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An hon. member: That makes sense.

The Chairman: Does it sound reasonable?

Stéphane Bergeron.

[Translation]

Mr. Stéphane Bergeron: I would just like to give the reasons for our opposition to this. We don't have a very doctrinaire position on the issue, but it is quite clear that this provision will increase the accounting workload of the national head offices and the chief agents, because this was normally done in the context of the annual return. We are therefore opposed to this recommendation.

[English]

The Chairman: Jacques Girard.

[Translation]

Mr. Jacques Girard: I'm sure Mr. Bergeron will be pleased to see that this point is linked to point 8 on page 7. Parties and even members of Parliament have often called me to ask why parties were not reimbursed for the expenses they incurred during by- elections. The Act does not allow this, even though there does not seem to be any logical reason for this provision. We therefore suggest that parties be reimbursed provided they submit a return. So there is a connection between the two points.

Mr. Stéphane Bergeron: We're changing our position.

Some honourable members: Oh, oh!

[English]

The Chairman: In the light of that, those generally in favour of number 4 please indicate, so we can see. Those against? None that I see.

Number 5.

Mr. James Robertson: Number 5 and number 6 are linked together. One applies to the party; the other applies to the candidates.

Currently the names of donors are put on the reports. The suggestion is that more information be provided so Elections Canada can check the identity of the donors. The first suggestion is that the address be put on the form, as well as some other information, such as date of birth.

The Chairman: Elinor Caplan.

Ms. Elinor Caplan (Thornhill, Lib.): The concern I have is the notion of a unique identifier, such as date of birth. It's reasonable to have the name and address. That information is already available, because you present a tax receipt, and name and address are on the voters list. That should be all that is required, and that's what I'm prepared to support.

So if we could make a note that when we vote on number 5, it's with the view that we don't include anything other than name and address, I'll support it. If it includes anything other than name and address, I will not support it.

The Chairman: Carolyn Parrish.

Ms. Carolyn Parrish (Mississauga Centre, Lib.): I could make a bad joke that you get rid of all your women donors over the age of 29, but I won't.

It's intimidating, particularly to new Canadians, if you start asking for too much information. They're wondering who's going to check what and whether somebody is going to check their income tax returns and investigate this. There's just that aura of over-information that's not required, and it intimidates people. So I would agree with Elinor; I would suggest the name and the address have to be enough.

The Chairman: Peter Julian.

Mr. Peter Julian: We already request the name and address, particularly for the over $ 100 donors. That's already published information. So we're already asking—

A voice: It's just the name now.

Mr. Peter Julian: Well, yes, but the names are available, and it's a matter of public domain. So as a result, donors are requested to provide the type of clarity we need in the system. Asking for the date of birth is going beyond that line, and for that reason we would oppose this.

The Chairman: Mac Harb.

Mr. Mac Harb: I'm done.

The Chairman: Okay.

[Translation]

Madeleine Dalphond-Guiral.

Ms. Madeleine Dalphond-Guiral (Laval-Centre, BQ): I remember the very impressive comments made by the Human Rights Commissioner regarding date of birth. I don't think he would be pleased to see this at all.

Mr. Stéphane Bergeron: I have another question, Mr. Chairman.

My comments are a reaction to the remarks made by the Officials from the Office of the Chief Electoral Officer. Would people be identified just for the Chief Electoral Officer and Revenue Canada, when information is submitted in order to issue receipts for income tax purposes, or would this information be used in order to compile a list of donors? If we were to accept this point, would all donors, including those who contribute less than $ 100, be registered, and could their names be disclosed or published?

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The Chairman: Jacques Girard.

Mr. Jacques Girard: This relates only to contributions over the current threshold of $ 100, which we suggest should be reviewed. The information would be used chiefly for consultation purposes, as is the case at the moment. Currently, parties provide a list of names, and we would add the address.

Mr. Stéphane Bergeron: The reason I ask is that it states "all donors".

Mr. Jacques Girard: We assume that the reference is to all donors whose names must be disclosed at the moment.

Ms. Lorraine Godin: That is important.

[English]

The Chairman: It's an important clarification. It means all donors over the threshold.

[Translation]

Mr. Jacques Girard: That is correct.

Mr. Stéphane Bergeron: I know that some recommendations were made during the hearings, and I don't know whether we will be discussing them under future points.

[English]

The Chairman: Could we come to the threshold later on? The limit, yes. Okay?

With regard to the first part of number 5, there's a part that goes on about categories of donors. Is there agreement that we do not like the idea of this additional information, unique identifiers, date of birth, and so on?

Some hon. members: Agreed.

The Chairman: Jamie, would you address the second part?

Mr. James Robertson: The second part ties into increased transparency and following of funds and it would involve more the transfer of funds from parties to riding associations and agents and so forth. So the idea would be that this report should have various categories other than just donors. There would also be a category that would indicate where funds were transferred to.

The Chairman: Janice, is that a correct interpretation?

Ms. Janice Vézina: That's correct.

The Chairman: Are there any comments on the second part of number 5? We'll have Elinor Caplan and then Stéphane Bergeron.

Ms. Elinor Caplan: I think it's unnecessary. If you have the name and the address of the donor you know whence they come. And if it's a transfer between riding associations or between the party to a riding association, that's clear by the name and address. I just think this is unnecessary, and I won't support it.

[Translation]

Mr. Stéphane Bergeron: I don't really have any fundamental objection to this second part, but I would like to ask for some information. The point refers to: "political organizations other than registered political parties, and others". First of all, I find the wording strange, and second, there's already a category on our returns that refers to political organizations. What political organizations are being referred to here, as compared to those referred to in the existing category?

[English]

The Chairman: Janice Vézina.

Ms. Janice Vézina: If you look at the example of political party return, the categories of donors do not include receiving money from a local association, so a contribution from the local association to the party is not identified anywhere. It would be in the column called “Other”. These are some of the areas we're trying to enlarge in terms of reporting.

So right now it doesn't exist at all. Any donor that's a political organization donating to another doesn't exist in the reporting for political parties.

The Chairman: Lorraine.

[Translation]

Ms. Lorraine Godin: I don't know how the other parties work, but generally speaking, when there are transfers between the national party and the local associations, all this money comes from contributions, in our case, from individuals whose names are reported under "individuals" or "companies". The money comes from the contributors in the first place. They are the initial source, and we are already reporting them. However, if I were to receive some money from another political party, that would be a different matter. Generally speaking, reported contributions are the initial source of internal transfers of funds. To what extent do we have to enter this information as transfers or contributions? The result could be that we would no longer disclose information about our contributors.

[English]

The Chairman: Janice Vézina.

Ms. Janice Vézina: Perhaps I can clarify the issue. If a donor gives money to the local association that, in turn, has it receipted through the national party, this donor shows as a donor to the national party even though the national party transfers the money back to the local association. The link between the original donor and the local association receiving the money is not there. It's not reported.

So that's just an example of what this recommendation is proposing.

[Translation]

Ms. Lorraine Godin: When money is transferred back from the national party to the local association, that is no longer a contribution, it is clearly an expenditure.

[English]

Ms. Janice Vézina: The transfer section on the report of the party return is one line. Global amount...transfers to candidates and local associations, $ 3 million. It could be any or all; no one knows where it's going at that point.

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Ms. Lorraine Godin: And what do you want to disclose, the amount?

Ms. Janice Vézina: The proposal in the act is simply—

The Chairman: Lorraine, I don't know where this one came from.

Ms. Lorraine Godin: The proposition is to disclose that, to have a separate line, transfers to local associations, is that it?

The Chairman: Let's have Mac Harb and Peter Julian.

Mr. Mac Harb: As this young lady has said, it's absolutely true. In addition to that, as it is now there is a provision when we file with Elections Canada to say where the money came from, what the source of the money is that we had from the Liberal Party of Canada, in our case. And to add another layer might create a little bit of confusion, in a sense. I think the system works as it is.

We disclose where we get the money from—if it's from the party or if it's from individuals. The party discloses also where they get the money from, which is the taxpayer at the beginning. So either way, you end up recapturing it at the end from the Elections Canada perspective.

The Chairman: I think we had a good hearing on this.

Peter Julian.

Mr. Peter Julian: You've explained it better, Janice. I didn't understand at the beginning how you proposed to use this.

This would not mean that we are identifying that donation, which Lorraine mentioned, at the riding level and at the federal level, or at the federal level and at the riding level, if that money has been transferred and already receipted at the respective level. All this would mean is that the moneys transferred locally or transferred locally back to the central party would have that global amount identified in the report.

Do I understand that correctly?

Ms. Janice Vézina: In other words, if you transferred back to a riding you would show the amount transferred to the riding.

Mr. Peter Julian: It's not a donation; it's a transfer.

Ms. Janice Vézina: Yes.

Mr. Jacques Girard: You can start with numbers 8 and 9 on page 13. We can deal with all of them together.

The Chairman: Okay. So many of these things are interconnected and circular, as we've said.

In light of that discussion, considering the second part of number 5 on page 12, who is generally in favour of it as it stands? Those against? I see no one in favour.

We're on number 6.

Mr. James Robertson: We've already dealt with number 6. I think numbers 5 and 6 are mirror images of each other.

The Chairman: That's right. Agreed.

Mr. James Robertson: On number 7, candidates are currently entitled to be reimbursed for some of their personal expenses. In the return there is a requirement for a statement of personal expenses. Not all candidates provide such a statement, and it's not always clear whether they did not incur any personal expenses or whether they just neglected to include that information. So the requirement would be that if there were none incurred, you would file a nil return. There would have to be something to show that you weren't claiming any expenses. It's a technical point.

The Chairman: Elinor Caplan.

Ms. Elinor Caplan: It should be clarified that where you claim expenses, you produce receipts.

Mr. Mac Harb: That's the other part.

Ms. Elinor Caplan: If that's the intent of this it's good, and it should be there just so it's clear that's what the expectation is.

The Chairman: Yes.

Stéphane Bergeron.

[Translation]

Ms. Stéphane Bergeron: Unless I am mistaken, is that not already the case in point 7?

Mr. Jacques Girard: No, there is a practical problem. The Act provides that candidates must send their official agent their personal expenses return within three months. Two things can happen. In some cases, there are no personal expenses and therefore the official agent receives nothing, but he does not know that there were no expenses. The candidate may have incurred some expenses, but is late submitting his return. We suggest clarifying the Act by stating that candidates must submit a report to the official agent within three months, whether or not they had any personal expenses. That would be clear.

Mr. Stéphane Bergeron: How is the deadline set?

Mr. Jacques Girard: It's the timetable provided for under the current legislation, namely three months.

Mr. Stéphane Bergeron: Is it the official agent who has three months to produce his report?

Mr. Jacques Girard: No, it's the candidate who has three months to file a statement of expenditures to the official agent.

Mr. Stéphane Bergeron: All right.

[English]

The Chairman: On number 7, those generally in favour? Those against? I see none against.

We are on number 8.

Mr. James Robertson: Number 8 and number 9 can be dealt with together. They're similar.

The first one, number 8, deals with transfers between registered parties and candidates. Number 9 deals with transfers involving political parties and local associations. The idea is fuller disclosure and transparency of such transfers.

The Chairman: Are there any comments on numbers 8 and 9?

Elinor Caplan.

Ms. Elinor Caplan: I think they're very reasonable provisions. I don't have any problem with numbers 8 or 9.

The Chairman: Okay. Those generally in favour of 8 and 9, colleagues? Those against? I see none against.

We are now at number 10.

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Mr. James Robertson: At present, it is understood that contributions are sometimes given or made directly to a member of Parliament, and there is currently no procedure for those to be disclosed.

This also gets into other issues because the question is, if you give money to a member of Parliament, are you making a political contribution or are you trying to influence their behaviour?

So perhaps this is something that can be better dealt with through a code of conduct or conflict of interest.

The Chairman: Let's hear from Elinor Caplan and then Stéphane Bergeron.

Ms. Elinor Caplan: That's my view. I don't think this has anything to do with the Elections Act. Contributions between elections made to riding associations or political parties are clearly covered. This sort of thing is definitely code of conduct and conflict of interest requirements, and it should be dealt with by the House of Commons.

The Chairman: Stéphane Bergeron.

[Translation]

Mr. Stéphane Bergeron: In fact, that's part of my point. On the one hand, isn't such a provision already covered by the Parliament of Canada Act and further down the line, by codes of ethics that govern the activities of members of Parliament? On the other hand, I would tend to be in favour of this after all, because we know full well that members create a fund outside election periods, let's say the Friends of Mac Harb Fund. People contribute to it and when the election campaign is launched, this fund is transferred to the candidate's campaign fund and no one really knows where the money came from.

Therefore, I would fully agree that contributions that help elect a candidate, whether they are made before, during or after an election campaign, must be declared.

Of course, there are provisions that mean that members are sheltered from any undue influence that could constitute a bribe, but I think we must also provide for a clause in the Elections Act for any contribution that could eventually be used for election purposes.

[English]

The Chairman: Elinor Caplan.

Ms. Elinor Caplan: My understanding is that the campaign period is not a problem at all because any funds that go into the campaign account are traced to where they come from. And any contribution that is made to a party or to a riding association is tax receiptable.

It has to do with something totally unrelated to campaigns. It has to do with the conduct of members after they are elected. I've never heard of anyone legitimately...let me use the word. If somebody gives money directly to you, it's a bribe. It's criminal and it's code of conduct.

Mr. Stéphane Bergeron: Not if you don't use it.... If you deposit it into an account and you use this money when the election is called and you transfer the funds of this account to your campaign account, it becomes a contribution from this account to the electoral account. It's a contribution, but you can't know from whom those contributions come. So if you receive money that is deposited into an account outside of the electoral period, you have to declare it under the electoral law.

Ms. Elinor Caplan: I think you do. I think the law requires it.

Mr. Stéphane Bergeron: You cannot deposit it in your riding.

[Translation]

If this contribution is not deposited in the account of the political party but in a separate account, in the name of the Friends of Elinor Caplan Association or the Friends of Stéphane Bergeron Association or God knows what, it would eventually be deposited into a...

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[English]

Ms. Elinor Caplan: Let me ask you a question. I'm probably missing something. Why would anyone who was doing something legitimate want to contribute to an account where there was no tax credit when they would make the same contribution to your riding association or to your party? I would say it was fishy that they would not want the benefit of the tax receipt contribution, and therefore something should be investigated if there is money coming into the campaign that is not subject to a tax receipt of the law.

Am I missing something?

[Translation]

Mr. Stéphane Bergeron: If I donate $ 1180, I'm entitled to the maximum tax deduction. If I don't want to make it look like I donated $ 5000 to a political party because I want to keep my reputation, but I want to give more to a given candidate in whom I believe in order for him or her to campaign, I will donate the maximum in order to be entitled to a tax receipt and I will give another part of the contribution which would not warrant a tax receipt in any event, to the account of the Friends of Elinor Caplan Association, for example.

[English]

Ms. Elinor Caplan: It would never happen in my case. You'll have to use another name.

[Translation]

Mr. Stéphane Bergeron: All this is purely hypothetical.

[English]

Ms. Elinor Caplan: I would never accept that.

Mr. Stéphane Bergeron: The case is that some others might accept that because it's legal, actually.

The Chairman: Let's go in speaking order. This is all very useful, and let's remember, we're not in a debate, we don't have to win a debate here. We want to get on the record useful points, which we are doing.

Marlene Catterall.

Ms. Marlene Catterall: I've been listening to what Stéphane said. The key point here in terms of the Elections Act, as distinct from what Elinor said, is that any funds that go into an election have to be accounted for as to who they came from, whether they came out of an account that says “Friends of Marlene Catterall” or anybody else. If they go into an election fund, Elections Canada has to know where they came from.

I don't think that means members of Parliament have to disclose any contribution received between elections. What I think it does mean perhaps is that there has to be a clean-up of the wording on the election expenses part of the act to ensure that any money that goes into the campaign is identified as to source, no matter whether it was collected five years before or not. If it isn't, then it can't go into an election campaign.

The Chairman: It seems to me that we want disclosure, by the way. There is some discussion about how that should be handled. That's really what we're discussing.

[Translation]

Mr. Stéphane Bergeron: What Marlene has just said is perfectly reasonable. If we vote on Marlene's proposal, we will be in agreement.

Mr. Mac Harb: We were told that that's what we have to do right now.

Mr. Stéphane Bergeron: No, no, because the current Elections Act allows any organization to donate money to someone's campaign.

[English]

The Chairman: Excuse me, Marlene, could you say that again?

Ms. Marlene Catterall: It will be in the blues.

The Chairman: Could you say it roughly again so that we know?

Ms. Marlene Catterall: The proposition is that any money that goes into an election campaign should be identified as to who contributed that money, regardless of what organization it might flow through.

The Chairman: Technically, Mac, if it is or it isn't, it doesn't matter.

Those generally in favour of what Marlene just said? Those against? I see no one against.

Can we move on to number 11, please?

Ms. Marlene Catterall: Mr. Chairman, can we dispose of this quickly? I have dozens of people who work 40 hours a week. I have no intention of asking them to keep time sheets and declare their profession.

The Chairman: We discussed it earlier; we reject it again here.

Ms. Elinor Caplan: Could I raise one other thing that is the same as this?

The Chairman: Yes.

Ms. Elinor Caplan: Just as it's ridiculous to keep time sheets on volunteer hours—

The Chairman: This is a bit of a discussion on number 11.

Ms. Elinor Caplan: —I also think it's ridiculous to keep tabs on people who bake a cake or bring in homemade goods.

The Chairman: A loaf of sandwiches is the famous one.

Ms. Elinor Caplan: In a past life, when I wasn't at all with it, I managed a federal campaign. Because the limit says up to a $ 100, if you are technically doing it, you have to or should evaluate every muffin, every donut—

The Chairman: We accept all that.

Everyone understands what Elinor is saying, do we? Yes.

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Number 12.

Mr. Stéphane Bergeron: I didn't get the point, excuse me.

The Chairman: The point, Stéphane, is that it was an elaboration on what is volunteer time. That was dealt with in number 11. And she was simply saying that—

[Translation]

Mr. Stéphane Bergeron: I don't understand the link here.

[English]

The Chairman: Okay, number 12, please. Jamie.

Mr. James Robertson: This goes back to the Lortie commission, and it basically would impose some regulation of nomination campaigns. This would require candidates who are actually nominated to file a report on nomination contributions and expenses.

The Chairman: Any comment? Stéphane Bergeron.

[Translation]

Mr. Stéphane Bergeron: At first glance, and without having consulted anyone around me, I would tend to agree with that recommendation, insofar as a candidate for nomination can spend an indeterminate amount, within the limits of what is provided for by his party's statutes, of course. But if the party has no provisions concerning nominations, that would mean that this person could, on the one hand, receive any kind of contribution in any way shape, or form and, on the other hand, invest that money in an unlimited way for his own publicity, which would naturally go beyond the party framework in certain respects. There's a risk that this will become pre-election campaign advertizing in some way.

That's the problem I have with this resolution, and that's a point I would like you to clarify. According to this provision, will expenses associated with the nomination—regardless of whether they are incurred near the election date or not—be included in the election expenses of the candidate in question?

Mr. Jacques Girard: No. Our recommendation—I would have to check the wording of the Royal Commission's text—did not include it in the ceiling. It was subject only to a disclosure mechanism.

Mr. Stéphane Bergeron: But I am still entitled to ask that question.

[English]

The Chairman: Carolyn Parrish.

Ms. Carolyn Parrish: This is an absolutely fascinating recommendation, because it actually gives you two distinct periods. One is the actual nomination within your own party, for which you give no receipts when you get donations. Therefore, technically you should not be accountable to anybody but your party.

Having lived through the biggest one in the history of Canadian politics, I can say that it cost me about $ 60,000, which was all my own money. That's a very interesting recommendation.

If they want to get into the business of keeping tabs on what's spent in nominations, then they should be getting into the business of controlling nominations, as they do in the States. If they're stepping in that direction, I'm not sure we're all ready for that.

The other thing they should be in the business of doing is providing receipts. If I get an official donation from somebody for a nomination, whether I win it for my party or not, I should be able to receipt it, because I'm officially not the candidate for my party.

The second one is actually of more interest and more in the purview of the Lortie commission and whoever else thinks they're trying to control this. If the nomination is two or three weeks before the election, and it's a big, controversial nomination, you're getting a lot of publicity for your party.

I find too, though, that if you buy materials in that period and use it in the election, there's a distinct category in which you have to list it. You can't just go out and buy a pile of stuff and say, some day I'm going to use it, and it doesn't count in your election total.

To have all this rolled into one recommendation is far too complex. I think it's too much even to attack.

The Chairman: I'll deal with the two items separately. Are you okay now, Carolyn?

Ms. Carolyn Parrish: Yes.

The Chairman: Elinor Caplan.

Ms. Carolyn Parrish: No, I'm not. I'm not okay, because I think this is impossible.

The Chairman: No, I meant, had you finished?

Ms. Carolyn Parrish: Yes.

The Chairman: Elinor Caplan.

Ms. Elinor Caplan: I agree with Carolyn on both counts. I think the first one on the nominations is that if you want to get into a regime where you are holding accountability to the nomination procedures in each party, that's another big discussion. If you're going to require disclosure, then you have to get into receiptable expenses and so forth. So I think that's very difficult.

• 1215

On the other one, that contributions received between the date of the nomination by the party and the date of the official nomination for an election....I'm not sure I understand what the problem is. It seems to me that once you're the nominated candidate, you set up your chief financial officer. If any contributions come in, they can be transferred into the campaign by the chief financial officer after the writs drop—

The Chairman: Can I go to André Harvey first.

Ms. Elinor Caplan: —or down to the riding association.

The Chairman: I'm going to go to André Harvey first, and then to the—

[Translation]

Mr. André Harvey: Controlling the election campaign as a whole is difficult enough. I think we will let people who want to invest in pre-campaign activities just get on with it. It all gets a bit complicated.

[English]

The Chairman: Marlene Catterall.

Ms. Marlene Catterall: Yes, I think we're dealing with part of a puzzle here, and I'm somewhat mystified.

As I recall, this was part of a number of recommendations Lortie made. It included, among other things, limits on expenditures on nominations. Among other things, that was part of equalizing the opportunities for women to compete politically.

I'm not prepared to deal with this in isolation from all those other recommendations that were part of the package. I'm a little curious about why the whole package isn't here.

The Chairman: Okay, Janice Vézina. Any comments, particularly to Mrs. Caplan?

Ms. Janice Vézina: Just to clarify, the point of nomination referred to in the act refers to the nomination where you present your papers to the returning officer.

I think we saw a previous recommendation that said that you could issue tax receipts retroactively to the beginning of the writ period. If the nomination for your party takes place outside the electoral period, that point in time is not recognized by the act. Nothing currently applies to that.

Ms. Marlene Catterall: But did Lortie make recommendations on that?

Ms. Janice Vézina: Yes, definitely.

Ms. Marlene Catterall: And they're not here for us to deal with, and frankly, Mr. Chair, I prefer that we not deal with this except in that context. I don't know if you have plans to do that or not.

Ms. Elinor Caplan: It also seems to me that any funds raised prior to the official nomination date that is in the act is done through the riding association.

Ms. Janice Vézina: That's right, that's normally how it's done.

Ms. Elinor Caplan: So I don't see a problem unless there are bigger issues here that were addressed in the Lortie commission.

The Chairman: Are other people willing to consider these two items now in general terms?

An hon. member: No.

The Chairman: No? Would you leave them to miscellaneous at the end, or something like that?

Ms. Elinor Caplan: Well, I think we can dispose of them. I just don't think we should deal with them.

An hon. member: Say no.

Ms. Elinor Caplan: Say no.

The Chairman: Okay, bear in mind, colleagues, again, that one of the great contributions to this report is going to be that we're going to have all this stuff in one place, okay? That is what a lot of our energy.... If we do nothing else, all these issues will be in one place. They will be raised, there will be discussions of them, and so on.

So then with regard to number 12, the first part, “Each candidate for an election should be required to submit a report on nomination contributions and expenses”, those generally in favour? Those against? I see a considerable number against.

Then there is the second part: “and a report of contributions received between the date of nomination by a party and the date of the official nomination for an election along with the expenses return.” Those generally in favour of that? I see two. Those against? I see many.

Okay, can we proceed to number 13.

Mr. James Robertson: Mrs. Catterall's point here may be also...because I think there were restrictions in the Lortie commission on the amount spent on leadership campaigns. That was not included in this discussion paper.

However, the point of this—and it goes back to a recommendation earlier on pages 7 and 8—is that there be an agent appointed for leadership campaigns. The committee agreed to that. In this one, if there were any surplus funds left over at the end of the leadership campaign, they would go back to the registered party. In most cases the donations have been receipted through the party organizations.

The Chairman: Elinor Caplan.

Ms. Elinor Caplan: I think that's the key thing. At the present time all the parties establish their own rules for amounts raised and how much can be spent on leadership races, and those are declared publicly. All parties agree that the leadership candidates can raise funds through the party, and they are receiptable. It therefore seems to me that the last step...although I can't imagine that you're going to have surpluses. Usually it's the opposite that occurs. But if there are any surpluses, I believe they should return to the party.

• 1220

The Chairman: Those generally in favour of number 13? Those against? No one is against.

Number 14.

Mr. James Robertson: This relates to trust funds that several parties, or maybe all parties, have to deal with specific types of campaigns, or to encourage particular kinds of candidates. This would bring them within the regime by appointing a registered agent for any trust fund—and an audited financial statement.

The Chairman: Elinor Caplan.

Ms. Elinor Caplan: I think all parties have funds such as this. Well, the Reform Party may not, but I know that our party....but I know the NDP has the Agnes MacPhail Fund. We have the Judy LaMarsh Fund.

It seems to me that where it's a specific fund, it's reasonable that it have an agent there, again, collecting and receiving. I think it's appropriate that those statements be public.

The Chairman: André Harvey.

[Translation]

Mr. André Harvey: Many resolutions apply. This means that any flexibility afforded by one may be restricted by another. For example, resolution 14...

[English]

The Chairman: André, you see, the problem is—

[Translation]

MR. André Harvey: So obviously, all funds have to issue receipts. There are no errors this way, and the process becomes transparent.

Mr. Jacques Girard: Yes, the system must be transparent.

[English]

The Chairman: Peter.

Mr. Peter Julian: I just have a question. The way it's structured, this seems to deal more with the local riding level. We have not adopted the registered electoral district agent, but in terms of trust funds at the central level, those funds often find themselves in the registered parties' return anyhow. So I'm not clear on exactly whether this refers to both the riding level and the central level, or just the riding level, or just the central level.

The Chairman: Janice Vézina.

Ms. Janice Vézina: The focus really is simply on disclosure of donor—

Mr. Peter Julian: At any level?

Ms. Janice Vézina: —funds at whatever level.

Ms. Elinor Caplan: It seems that—

The Chairman: Okay, just a minute. Paddy Torsney.

Ms. Paddy Torsney (Burlington, Lib.): Sorry. I just wanted to make this clarification. Mr. Harvey was referring to some earlier, but I think that these funds being discussed are things like specific funds to encourage PC women candidates to run. These are raised throughout the years, and then are doled out at the time of the election.

As Mrs. Caplan had mentioned, in the Liberal Party we have the Judy LaMarsh Fund. It's divided up amongst women candidates who wish to access it, and it certainly helps to encourage people who fit within those guidelines, like being female. There are also probably some aboriginal funds.

I'm not sure about the Bloc, but I know that the NDP, the PCs and the Liberals all have funds like this, and it would just encourage greater transparency.

The Chairman: Elinor Caplan.

Ms. Elinor Caplan: On this one I agree with Mr. Bergeron, that if this would be—

The Chairman: Oh, this is a new turn of events.

Ms. Elinor Caplan: If this would capture the trust fund of the friends of Stéphane Bergeron—

The Chairman: Oh, oh!

Ms. Elinor Caplan: —then it would be a good thing to have that included.

In my view, any trust fund that is established for the purpose of collecting for election donations, which is the intent of this motion, would give greater transparency and would avoid some of the things we talked about earlier. Therefore, I'm sure he's going to support it, and I support it.

The Chairman: Stéphane Bergeron.

[Translation]

Mr. Stéphane Bergeron: I would like there to be a distinction between funds that are closely associated with candidates and funds that are less closely associated with candidates. Like the Friends of Elinor Caplan Fund or Liberal Party of Canada funds that encourage women candidates. According to the report published just before the election, we know full well what these candidates are asked to do. That is one thing.

The other thing is this: for example, if a local association has $ 20,000 available, and decides to put $ 10,000 of it in trust, should we appoint an agent for that $ 10,000 fund that the local association puts in trust? That seems a little complicated to me. I would imagine that, in any case, we could trace all amounts deposited into the association fund back to its point of origin. So I would like there to a distinction between funds put in trust by the local association, and funds put in trust by a group other than the local association.

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In my view, it would be appropriate to appoint an agent for such funds, though in the case of a local association, the local treasurer would be responsible.

[English]

The Chairman: André Harvey, and then we'll go to—

[Translation]

Mr. André Harvey: If I understand correctly, with a resolution like this one, everything is completely locked in. Receipts have to be issued even for local funds. So people cannot make a contribution without a receipt, though they are in fact entitled to do so. These links are all very difficult to establish, Mr. Chairman.

Mr. Stéphane Bergeron: Could we establish that distinction, Mr. Girard?

Mr. André Harvey: You mean giving local representatives the power to issue receipts?

Mr. Jacques Girard: We did not want to create a whole new entity just because a riding officer decided to deposit a certain amount in trust. That is not what we intended to do.

Mr. Stéphane Bergeron: I understand. But I want it to be clearly specified because if we extended that reasoning as far as it would go, number 14 as it stands could apply equally well to funds put in trust by local associations.

[English]

The Chairman: It's a useful discussion, I suspect.

In the light of this discussion on number 14, those generally in favour? Those against? I see two against.

I've agreed, colleagues, that we will finish at 12.30 p.m. Perhaps we can do number 15. I think it should be fairly straightforward.

Mr. James Robertson: Currently surplus campaign funds have to be disposed of when the campaign is over. The time limits and the provisions of the Electoral Act are fairly complicated and not very flexible. This would allow there to be a notice of assessment, and within sixty days of that you would be required to dispose of the surplus funds. It would add a certain amount of flexibility and clarification to the current procedures.

The Chairman: Does that sound reasonable, folks?

Stéphane Bergeron.

[Translation]

Mr. Stéphane Bergeron: What is the difference between that and what we have now?

[English]

The Chairman: Janice Vézina.

Ms. Janice Vézina: Right now there are two key dates in the act relating to the disposal of surplus. The first refers to a candidate who does not get a reimbursement, who is not entitled to reimbursement. That candidate must dispose of the surplus within two months of filing a return.

The other disposition relates to the candidate who does receive a reimbursement of election expenses, and that candidate must dispose of the surplus within thirty days of officially receiving the cheque from Elections Canada.

The problem is that some of these timeframes are too tight. In the case of the two-month window for the candidate who is not reimbursed, the current process is that the return has to go to the returning officer's office to be filed. They mail it in to us. In some cases it has taken two months for us to get the return. There's no way to even communicate with the candidate to say there's a problem.

The second circumstance is that many parties have assignments with their candidates. The cheque goes to the party. The party has to split it and send two pieces out. This takes almost that thirty-day period, so it puts the candidate and official agent in a very dangerous position.

The Chairman: In light of that, number 15, those in favour? Those against?

Colleagues, I hate to do this, but on the next one on surplus funds, because that's what we are dealing with—we have dealt with number 3 already—would you consider looking at number 1? If it's going to take any time, we'll do it next time.

Jamie, very briefly, please.

Mr. James Robertson: Number 1 would suggest that the current provision regarding how the surplus is calculated be reviewed, taking into account transfers between candidates and political parties. It's fairly technical.

The Chairman: Again, it seems technical to me. Agreed.

Number 2.

Mr. James Robertson: “Political parties and registered electoral district agents”—and it depends on whether they're registered—“should be prohibited from transferring funds to unelected candidates after polling day, except for the payment of unpaid claims...”. Again, I think it's just a technical clarification.

The Chairman: It's technical, okay. Number 3, we agree—

Elinor Caplan, please.

Ms. Elinor Caplan: Actually, I had some questions about this. I marked that I wasn't going to support it. I need you to remind me what the explanation is, so I can remember my argument of why I didn't like it.

Ms. Janice Vézina: As we just mentioned, the act requires the official agent to transfer any surplus funds to the local association or to the national party at the conclusion of the campaign. It does not preclude what has been raised as current practice, which is that after the campaign is closed, money comes back to the candidate.

• 1230

The act requires that the campaign be closed down and that the candidate not benefit financially from the campaign.

The Chairman: That's already the case.

Ms. Janice Vézina: But that's the principle. There's nothing to prevent the transfer of money once the campaign has closed down.

The Chairman: Okay.

Stéphane Bergeron.

[Translation]

Mr. Stéphane Bergeron: When I first saw this, I considered it quite appropriate. However, on taking a second look at it, I am no longer sure. Perhaps the wording should be reformulated to make it clearer. At present, number 2 implies that, in cases where there is a debt, funds can be transferred fairly easily to the unelected candidate or official agent. However, in some cases there may be no debt because the candidate used $ 10,000, $ 12,000 or $ 15,000 of his own money. In such cases, there is no debt. However, after the election, it might be appropriate for the association to transfer an amount to the candidate in compensation for expenditures he himself or she herself incurred.

Mr. Jacques Girard: In such a case he would have to make a loan to his campaign.

Mr. Stéphane Bergeron: It would have to be declared as a loan. Perhaps we could reword the resolution so that reference is made to transferring a surplus.

Ms. Lorraine Godin: When we talk about unpaid claims, we are also referring to debts. It's not limited to bills.

[English]

The Chairman: Is that right? It's the intent.

[Translation]

Lorraine, is that correct?

[English]

Ms. Elinor Caplan: My concern was that you have to be able to pay debt. If this says you can't do it, I don't support it. If it says you can pay the debt, I would support it.

[Translation]

Mr. Stéphane Bergeron: I don't understand this distinction made between elected and non-elected candidates.

[English]

Ms. Elinor Caplan: Not that I think it would ever happen. The parties usually say you're on your own.

Ms. Janice Vézina: There was another recommendation in the report that addressed contributions, transfers, to members of Parliament. That's why they—

The Chairman: Marlene Catterall.

[Translation]

Mr. Stéphane Bergeron: Yes, but we've disposed of the other one negatively, if I remember correctly. So in this case we should simply refer to election candidates rather than members of Parliament and non-elected candidates. They would be treated equally.

[English]

The Chairman: Do we agree with that, by the way? Do we take out “unelected”?

It's done.

Marlene Catterall, one last word.

Ms. Marlene Catterall: The problem I have with this is that it allows, let's say, the local riding association to reimburse the candidate only for expenses actually incurred during an election campaign.

Ms. Elinor Caplan: There may be others.

Ms. Marlene Catterall: There may be others that were incurred before the election campaign. I don't believe people should end up personally out of pocket because they've chosen to put themselves up for public office, so I'm a little concerned that this is a little too tight.

Ms. Elinor Caplan: That was my concern.

The Chairman: Again, it was a useful discussion.

In the light of this discussion and knowing that it's referring to candidates now, not only elected candidates, those generally in favour? Those against? I see two in favour.

Next is number 3. We dealt with page 9, number 6, and we unanimously agreed to it. Agreed?

Some hon. members: Agreed.

The Chairman: Peter Julian, please.

Mr. Peter Julian: Provided they are nominated as an independent candidate or as a non-affiliated—

The Chairman: It was the point you made. We accept that.

Now, colleagues, I thank you for this. We are now running behind. I would suggest for our next meeting, on Tuesday, we continue with this. I hope we'll have the technical points from all the parties by then. We could come prepared to go through lunch. If you agree with this, it would save us an evening meeting, and I could order the food.

It's agreed, and it will be so indicated on the notice of the meeting.

This meeting is adjourned.