Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs

Issue 12 - Evidence for March 12, 2008


OTTAWA, Wednesday, March 12, 2008

The Standing Senate Committee on Legal and Constitutional Affairs met this day at 4:06 p.m. to continue its consideration of a comprehensive review of the amendments made by An Act to amend the Canada Elections Act and the Income Tax Act (S.C. 2004, c. 24).

Senator Joan Fraser (Chair) in the chair.

[English]

The Chair: I see a quorum. The Standing Senate Committee on Legal and Constitutional Affairs is continuing its review, as required by statute, of the amendments made by an Act to amend the Canada Elections Act and the Income Tax Act, 2004.

For the first part of our meeting, we have the pleasure of welcoming Greg Fergus, National Director of the Liberal Party of Canada, and Éric Hébert-Daly, National Director of the New Democratic Party of Canada.

For this first meeting, we invited all the parties that hold seats in the House of Commons. The Conservative Party and the Bloc Québécois both kindly declined our invitation. They sent letters with a few comments about the bill that, if they have not been circulated, will be circulated to you and will be part of the proceedings of this committee. However, the Liberal Party and the New Democratic Party of Canada accepted our invitation for which we are very grateful and pleased.

Have you decided which of you gentlemen will go first?

[Translation]

Éric Hébert-Daly, National Director, New Democratic Party of Canada: Madame Chair, I would like to thank you for having invited us to appear before the committee. The NDP has carefully studied the impact of the requirements relating to the registration of political parties, a question that is important for all registered parties.

I would like to begin by saying that, in our opinion, the legislative changes that have allowed political parties, and in particular small political parties, to register and run at elections without having to endorse 50 candidates have proved a resounding success.

[English]

Democracy was not an easy process for a small political party back when they were required to find 50 candidates to be able to run. That was particularly true for political parties that may have tried to attain the 50, come up short and then found themselves with a dozen or so independent candidates. It made it difficult to be treated as an independent — particularly because, in the end, you can receive no money from your party as an independent and cannot transfer any surpluses back to the political party. As a result, the Receiver General would be the gracious host of the surpluses of any campaign by those people. In fact, a small central party would be penalized twice.

[Translation]

Furthermore, the Act does not allow votes cast for a candidate who has become an independent to be added to the total number of votes cast to allow a small central political party to obtain the two per cent of votes required at the national level, or the five per cent required in the electoral districts in which the party has endorsed a candidate, in order to be eligible for public funding. This is obviously a new problem stemming from the passage of Bill C-24 in 2003.

To our mind, the current methods of registration allow us to adequately address what were our two major concerns. First, we were concerned that entities would register political parties as a mere front in order to gain access to tax credits and would, in fact, use the funding they received for other purposes. We were also concerned that there would be an unacceptable growth in these parties to the point that political parties would no longer be able to meet without hiring large halls.

[English]

We had serious concerns about the creation of political parties under this legislation two years ago. We saw them as rather difficult because the idea they could become a front for an organization that wanted to use tax credits to its advantage or to wreak havoc within the political system was a concern.

We have not seen that. We have seen a growth in the number of political parties but, for the most part, my personal evaluation is that they are all legitimate parties wishing to be partisan activists within the political sphere. Because Canada has a political-party-dominated political process, that opens the door to a healthier democracy and is one of the important components of such.

[Translation]

Although these changes seem to have improved the system, the problem of access still remains and I would like to address it now, as it is unacceptable for those parties seeking the support of the electorate. It is not an issue that is directly addressed by this Act but, to our mind, it constitutes one of the biggest barriers to the democratic participation of small political parties in our political system. I am, of course, referring to the two per cent threshold required to be eligible for public funding and the issue of the $1.91. Access should not be restricted by the number of votes obtained by a party at the last general election.

This is one of our biggest concerns regarding to the current system. It means that the vote cast for a small party that does not achieve the two per cent threshold is essentially worth less than the vote cast for a larger party that is able to meet the five per cent threshold in the electoral districts in which it has candidates.

We believe that this constitutes the largest remaining barrier for small political parties and, although it does not affect us, we believe that change is required if we are to foster a healthy and accessible democracy.

Thank you once again for your invitation. We would be delighted to answer any questions you may have.

[English]

Greg Fergus, National Director, Liberal Party of Canada: I would like to thank the committee for the opportunity for the Liberal Party of Canada to speak this afternoon at your review of the provisions of the Canada Elections Act in the context of the registration of political parties. I am pleased that the Senate has deemed it important to review the practical applications of this law since it was passed.

Before beginning, I would like to introduce two of my fellow travellers in the Liberal Party: Jack Siegel, our electoral law expert as well as our Ontario election readiness co-chair, and Harry Mortimer, our director of regulatory compliance and reporting — a job I hasten to add that has become increasingly important since the passage of Bill C-3.

Since the coming into force of Bill C-3, we have noticed the emergence of a number of new political parties. Clearly, this legislation has opened up access to meaningful participation in the political process. Today, I would like to bring to your attention a few matters that I think should be of potential concern to Canadians with respect to the legislation as it stands today.

The first point is in regard to the opening financial position of a political party, including its assets and liabilities at the time of registration. The current provisions of the act require that ``within six months after becoming a registered party, the registered party shall provide a statement . . . of its assets and liabilities, including any surplus or deficit, as of the day before the effective date of the registration.''

No provision governs the source or nature of the assets or liabilities of the party at the point of registration. Prior to registration as a political party, a group may undertake to fund their initiatives from many sources, including corporate contributions. Such an entity potentially could raise a certain number, let us say $35 million, from corporate funds and establish themselves as a political party. It would be legal for the party to use those funds to fund an election and endorse candidates, but I think that contravenes the spirit of the legislation as it is set out.

Perhaps the Senate committee would recommend the addition of a provision to the registration requirements for a political party that restricts the opening assets and liabilities of the new entity to a low, perhaps nil, but reasonable amount. Any changes to the assets or liabilities would be subject to all provisions of the Canada Elections Act on an ongoing basis.

[Translation]

The second point I would like to raise relates to the administrative burden generated by the on-going compliance requirements of political party registration. Broadly speaking, the Act requires that a political party submit the declarations of 250 electors; the name of the leader and a copy of the party's resolution to appoint the leader; the signed consent of the officers of the party and its chief agent accepting their respective responsibilities; and the leader's declaration that one of the party's fundamental purposes is to participate in public affairs by endorsing one or more of its members as candidates and supporting their election.

While this may not seem like a lot of work, gathering these declarations every three years is very time consuming for a large party reliant on volunteers, as is the Liberal Party. Furthermore, were the deadline to fall during an election campaign, we would be too busy to gather signatures in order to comply with the rules and, at any rate, nobody would question the legitimacy of a well-established party such as the Liberal Party or the New Democratic Party. Perhaps the Act should contain a provision automatically extending the deadline by six months if it falls within 120 days of the writ being dropped.

On a similar note, I would like to sound an alarm as to the consequences of the growing compliance burden that we have witnessed over the past few years, as a result of amendments to the Canada Elections Act, for parties run primarily by volunteers. At the local level, we struggle to retain our chief financial officers. It is a heavy burden. I can but imagine the problems that Bill C-3 requirements cause small political parties, even registered ones such as the Green Party of Canada, the Libertarian Party of Canada and the Marxist-Leninist Party of Canada.

[English]

My final point refers to the fundamental purpose declaration that I just cited in my second concern. My concern is that this declaration may risk serving as mere lip service coupled with a single candidacy in each general election. I noticed at the previous hearing of this committee that the Chief Electoral Officer, Marc Mayrand, said it would be an offence to raise funds with an intention to transfer them to an entity other than one regulated by the act.

I suggest to the committee that you would want to look at the situation of transferring assets as opposed to funds between the parties at that point.

I could talk in a more detailed fashion or I can ask my colleague, Jack Siegel, to address this issue, but it is one we should look at.

In the interests of time, I will bring this to an end.

Should an appropriate standard be ``the dominant purpose'' rather than the fundamental purpose of establishing that political party? Put differently, it is not unimaginable to conceive that an entity could be both a political party and a charity.

If it were to satisfy that end, we would ask if it could then raise funds with the greater tax benefit for moderate-level donors provided for political parties.

I will stop with these reflections. We would be happy to take any of your questions.

The Chair: Thank you.

Senator Stratton: The question of political parties of a minor nature, in some instances, is to be applauded. We have a greater sense of democracy because of it. In your opinion, where does it lead? You have a small political party that operates as an entity but it neither elects anyone nor has the potential of electing anyone. Where do you think it should lead? The enactment of a bill is in progress. Is there another step?

Mr. Fergus: I take it as a point of principle. If the parties are legitimately representing or trying to represent a point of view that is not being addressed by other political parties, then I take it as a good thing that they are able to participate in the democratic process.

The bill has brought it down to allowing one person to represent the candidacy as opposed to the former provisions, which required a minimum of 50 candidates to be considered a political party. The Supreme Court would agree that that was considered too onerous an obligation. Is there a soft point? I do not know. As long as they are legitimately pursuing a political objective, then I would suggest it is a fine thing.

Where does it go? I can only guess. I am trying to conceive of the other perspective and I would have more trouble with that than with opening up the process.

Senator Stratton: For example, would proportional representation not be the next logical step?

Mr. Fergus: Is it proportional representation? Is it preferential balloting?

Senator Stratton: That is a fundamental question. We can get into the minutiae of proportional representation but the next logical step in the process with this bill — if you allow these minor parties to exist and if they capture a percentage of the vote — would be for them to have a number of seats in Parliament?

Mr. Fergus: I would be more than happy to invite my colleague, Mr. Siegel.

Jack Siegel, Co-Chair, Standing Committee on the Constitution and Legal Affairs, Liberal Party of Canada: Keep in mind that we have Bill C-3 as a result of the Supreme Court's decision in Figueroa v. Canada (Attorney General) and the elimination of the pre-existing standard and the need to establish a new one. I do not know that anything said by the Supreme Court that got us here could be interpreted as requiring a change in the underlying electoral system.

One can make an argument that it is a step to take. Voters in two or three provinces have another opinion. The discussion needs to take place as part of the overall public agenda on whether we make reforms, not merely look at proportional representation, and other modifications to the first-past-the-post system. It is a healthy debate but I do not know that it follows from Figueroa or Bill C-3.

Senator Stratton: I understand that but you are political and that is your business. I would ask Mr. Hébert-Daly of the New Democratic Party of Canada whether he thinks this should lead somewhere.

Mr. Hébert-Daly: There is no question that the NDP has long supported proportional representation as a way to allow minority voices to be heard in Parliament. We see it as potentially a way to increase the participation of women in Parliament. We have many ways of seeing the benefits of proportional representation. I was asked this question around Bill C-24, which is a method of financial proportional representation. It provides a bit of recognition and support to political parties who do not have representation in the House of Commons. That is why I go back to my point on political party financing being prevented and why the Longley decision, which we are awaiting, will be intuitive. I hope it helps us to go that extra step and recognize political parties, even if they do not elect people. Is a political party's only purpose to elect people or is it to help shape some of the debate? For some parties in this country, it is not only about electing candidates, but also about pushing forward an agenda or issues they feel strongly about and a political perspective.

Senator Stratton: I am a believer in proportional representation. I am trying to understand your position on this.

To make the point, in the respective constitutions of Iraq and Afghanistan, there is a requirement for 25 per cent women. I pose that as another question to you that perhaps we should take that route?

Senator Milne: For Senator Stratton's benefit, I would point out that proportional representation does not always mean groups or people are represented properly. The women in Afghanistan are not provided with offices or any of the amenities that the male members of Parliament have. They are there and, hopefully, are heard but I am not holding my breath.

I have the same question for both Mr. Fergus and Mr. Hébert-Daly about the Figueroa case that struck down the minimum-of-50-candidates law. Is there a soft point? Is one candidate too few? The court said that the requirement of 50 candidates is too great. Is there somewhere in-between that should define a political party?

Mr. Hébert-Daly: I think one is sufficient, and one should be sufficient. I do not think there is a soft point beyond that. It would be difficult to identify what that would be. From the perspective of a small political party, it would be difficult for them to set a standard by which they would feel it would need to go. My party and I feel strongly that one candidate is enough.

Senator Milne: Under the current requirement of one, how could you prevent a party from declaring its purpose is the Me Party?

Mr. Hébert-Daly: The Chief Electoral Officer has within his powers ways to deregister such a party. If 250 people said they supported the Me Party — their nearest and dearest — given the constraints in the act in terms of the motivation, purpose and partisan nature of the organization, there is sufficient coverage to deal with that. The last two years have not taught us that we are wrong, until now in any case.

Mr. Fergus: Perhaps 50 is too high a standard to hold. With all due respect, I disagree with the minimum of one. I know that we want to avoid the situation presented in Longley. Mr. Siegel could probably speak more to that case given his expertise in legal matters. The opportunity for abuse could happen, although it has not to date. We should try to ensure that the provisions of the legislation will avoid that kind of situation.

Mr. Siegel: The problem with a minimum of one is that it completely eliminates the distinction between an independent candidate and a party. The threshold needs to be low to meet the points made by the Supreme Court in Figueroa but a minimum of two might be a bit more rational that there is linkage between two campaigns. Otherwise, you are saying that an independent candidate who can also assemble 250 signatures has year-to-year benefits that other independent candidates do not. I am not sure that clarifies the situation or improves upon it any better.

My other area of law is union labour law where a union is two people or more in most regimes as opposed to a bargaining unit of one. Again, the bargaining unit of one is the individual. If a party is a collective, surely there should be more.

Senator Milne: My second and final question is to Mr. Fergus because I did not understand what you were talking about in your final point. You say that the fundamental-purpose declaration may risk serving as mere lip service, coupled with a single-person candidacy in each general election. I do not understand what you are getting at there.

Mr. Fergus: For the purposes of time, I had cut back that section of my remarks to ensure I respected the five- minute limit. I will ask Mr. Siegel to walk us through that one.

Mr. Siegel: The notion of having the declaration of it being a fundamental purpose to participate in the political process by putting forward candidates is there as a safeguard, as part of the intention of addressing the Figueroa decision, so the entity that registers has some character of an ongoing political continuity — but a fundamental purpose may not be its dominant purpose. The concern remains that one establish and declare it to be a purpose in order to obtain the financial benefits, the tax receiving, which is of enormous potential benefit to donors as a means of raising money for a number of purposes.

In discussions, I have used the illustration of founding the Party Party, whereby the Party Party wants to establish a means for people to have more fun and puts a candidate forward for that purpose. Every year, it gets its 250 supporters to kick in $200 toward the Party Party party pool, which then gives each of them a $150 tax receipt. It costs them $50 to have an enormous party.

As long as you say it is a fundamental purpose and field a candidate, you are covered. Should it not be something more? The phrasing we are throwing forward for consideration — by no means are we saying this is what you have to do — is whether or not it should be the dominant purpose of the entity to participate in the political process and, in so doing, put forward a candidate in each general election.

I agree with Mr. Hébert-Daly that it is not the only point of a political party, although I might get disagreement from my friend over here. The NDP's greatest contributions to this country do not come from the force of its numbers in the House of Commons; they come from the strength of its arguments for socially progressive policies. Any entity that participates in the process should have that ability, and it should be recognized as something worthy of respect and deference.

Senator Milne: Mr. Siegel, that was exactly what my CCF/NDP father used to tell me.

Mr. Hébert-Daly, what do you think about what Mr. Siegel said — that one is an individual and two makes a party in union parlance?

Mr. Hébert-Daly: Again, I do not particularly agree with my colleague. I say this with due respect because I understand the principle in the union movement — particularly of saying that there has to be more than one person with which to create a union. Therefore, I accept that understanding in that context.

However, in the political realm, if it meant that a political party was going to run two candidates but failed to run a second one for whatever reason — because they got to the deadline too late or were unable to get their deposit together for that particular candidate — despite the fact the party may be more than just that one candidate which I believe it is, a political party is far more than just the candidates it represents. It is the membership, the executive board, et cetera. In a scenario like that, you do end up leaving a political party that may have all the right intentions out on a limb.

I do believe that the Chief Electoral Officer has enough room to look at a political party and say, I do not think you are meeting these criteria. I think a Party Party, for example, would certainly be caught relatively quickly and would not qualify for registration.

The Chair: The Chief Electoral Officer, when he appeared before us, did not seem to think it was that far-fetched, although we did not use the Party Party as an example. He did tell us that, basically, they rely on the declaration of the party leader and tend not to go behind that. They get the 250 names, which seems like supporting evidence.

I asked him if it would be simpler just to drop the fundamental-purpose thing altogether. I am quite sure Mr. Siegel does not think we should drop some reference to purpose. Do you think that way?

Mr. Hébert-Daly: No, not at all.

The Chair: We have to tackle the purpose thing in some way.

Mr. Hébert-Daly: Absolutely.

The Chair: That was a supplementary. I apologize to Senator Milne for barging in.

Senator Oliver: I have a question for Mr. Fergus. I was interested in the section of your brief that dealt with the source and nature of assets. You gave the hypothetical of $35 million.

I favour multiple parties in Canada because that gives more choice to Canadians in the democratic system. Anything we can do to get more parties registered gives Canadians more opportunity to debate the public issues that they should have in mind before casting their vote. Therefore, I would not favour anything that prevents parties from emerging.

A number of Canadian parties have emerged from the vision of one individual. I am thinking of parties in Western Canada. Often, that one individual put up his or her personal money to fund that party. If I had $5 million and a vision and an idea, I should be able to put my money behind my ideas and build my party. That is not $35 million, as in your example, but I do not think there should be any limit on the original source. I think that deprives Canadians of the right to have new parties with new ideas to give everyone a better choice.

We have to level the playing field. You two represent established parties and you know from election law and experience that incumbents have a huge advantage. If you try to balance the advantage of incumbents against the person who wants to put up $5 million to start their party, it begins to level off. Given my views, what do you say about your hypothetical of $35 million?

Mr. Fergus: Although we have the same concern, we disagree about how to get there. There are two issues I will try to address.

The first is about the level playing field. I recognize that the New Democratic Party, the Liberal Party and the Conservative Party have had proud and long histories and have a certain ability, with the network available, to raise funds from Canadians, whereas newer parties do not have that same kind of network to start the process.

However, in order to level the playing field, it does not seem right to me that, whereas the existing political parties are limited by the contribution cap of $1,100 from individuals, a new party can spring up and have as its basis a $5- million or $35-million kitty with which to begin its operations. That strikes me as being unfair.

I am not suggesting we should limit them to nil in terms of what type of assets and liabilities they would bring to the creation of their party. However, I would suggest that we want to ensure it is a low and reasonable amount, not to give them an undue advantage, in order to avoid those situations.

I wonder if someone can correct me on this. It was when the National Party was set up — was it in 1993? It was on the basis of a generous donation from a Manitoban who had donated $4 million to the creation of this party. It was under a different legal context than what we find ourselves in now. I remember him saying no one should be allowed to give $4 million to a party. I think he is right. At some point, you want to avoid the excesses that money can play in terms of establishing a new party.

Mr. Hébert-Daly: On this point, my Liberal Party colleagues and I agree. I think that levelling the playing field means you have to do something about the source of revenue for starting a new party. There is also a danger that can come from a political party being created with, for example, a $5-million individual donation in the event that party decides a year later to merge with another political party. At what point does it become appropriate or even legal for the party that has benefited from the $5-million contribution to the smaller party with which they have merged? There are some real concerns there which I share with the Liberal Party of Canada.

Mr. Siegel: I will add a small note. Even as a fallback position, I think one could engage in extensive debate about whether there is an appropriate level of seed money whether it be $100,000 or $4 million. Transparency is the more transcendent point upon which I hope everyone would agree. If a new party is to enter the forum with a sizeable nest egg, at minimum, the source of those funds ought to be publicly disclosed as a matter of law.

Senator Oliver: Take my $5-million example. What if this individual had $5 million in Royal Bank stock and sold that stock to see through their vision of a new party? What is wrong with that? How does that advance the political process?

Mr. Siegel: I suspect there was no problem with it prior to Bill C-24. However, we have undergone a paradigm shift in Canadian electoral law since the introduction of contribution limits. Prior to 2004, that was perfectly appropriate to do.

Senator Oliver: I am talking about a new party. I am not talking about an annual contribution. I am aware of the new limits.

Mr. Siegel: I think the problem is illustrated in Mr. Hébert-Daly's point that, when a new party is created, it a party and with that comes the statutory provisions for how the mechanics occur regarding the ability to merge with an established party. The establishment of a huge fund to create a new party that is more than the party can spend in a campaign could result in a rather dramatic distortion of the system.

I agree with you in saying allow them enough money to get into the game, but not to go over the top in satisfying their initial fundraising needs, and not without public disclosure of the source of those funds.

Senator Oliver: Do you have a figure in mind?

Mr. Siegel: I speak for no one but myself, but I would not have a problem with a figure that was in the low six-figure range if you are trying to mount something nationally. When you start moving towards seven figures, it gets dicey.

Senator Milne: I think, Mr. Hébert-Daly, that you were suggesting a new party could be established with an enormous grant before they were incorporated. They could really be a sham and join an existing political party a year or two down the road. Therefore, they could bring an enormous amount of money to that existing political party.

Mr. Hébert-Daly: It does not have to be intended as a sham for it to be a problem. Yes, I suppose it is possible for it to be a sham but, in fact, it may have started out legitimately.

Senator Milne: What if it started out as a sham?

Mr. Hébert-Daly: Then I worry about the Chief Electoral Officer's work in recognizing the political party. That is a different issue.

In fact, it could have been legitimate and could have been one person's legitimate work. It could be a way to promote their ideas individually. They get to a certain point, then have a discussion with a political party and realize they can do this within that party. It would be perfectly legitimate, but we would still find ourselves in a situation where that money comes from sources that would not be legal in any other circumstance.

Senator Milne: My point is that both you and I could design a political party that would sound legitimate to anyone, including the Chief Electoral Officer. However, still in the back of someone's head was the fact that they were intending to make this as a donation to another party eventually.

Mr. Hébert-Daly: It is possible.

Senator Joyal: Since the Figueroa decision has interpreted Section 3 of the Charter dealing with the democratic right of every citizen to have the right to vote, I think the threshold imposed by the previous legislation — the one presently implemented — is unconstitutional. I do not think you can say, on one hand, that a number of candidates to be recognized as a party are not acceptable and, at the same time, say the number of votes of that ``party'' should be at a prescribed level to get the $1.75 for each vote. There is no logic there.

Administratively, it may be arguable. However, when you consider that limit in regard to Section 1 of the Charter, the reasonable limit in a society, I do not think it is unreasonable. For instance, if that $1.75 would have been given to all the small parties that did not meet the 2 per cent and 5 per cent thresholds in the last election, I calculated the amount would have been about $500,000. When you compare that with the overall cost of the election and the millions of dollars the public treasury is channelling to the recognized parties that have met the threshold, I do not think it is disproportionate to the overall results.

My opinion is that this section of the act is unconstitutional. I do not know where the case is now with regard to the Figueroa decision, but maybe Mr. Siegel is in a position to inform us. We should recommend that be reviewed and not wait again until the Supreme Court tells us what to do. If we feel this is the right thing to do, we should do it. The problem with the electoral act now is that each change to make it more open and more democratic seems to be dictated to Parliament by the court.

Do you feel there is something wrong here?

Mr. Siegel: I can bring you up to speed. It is the Longley decision. There is a previous decision involving Mr. Longley that may be more relevant to this topic. However, Mr. Longley's present dispute went to the Ontario Superior Court where he was successful in having the law struck down as being contrary to the Charter. On appeal to the Ontario Court of Appeal, that decision was reversed. The court found it was a violation of Section 3 but that there was a savings under Section 1 of the Charter, as demonstrably justified in a free and democratic society, on the basis that the previously existing parties, the Rhinoceros Party and the Natural Law Party, were frivolous and a waste of public funds. That was the demonstrable justification on which the Court of Appeal relied. I have an issue with that, particularly given that neither party exists today.

Be that as it may, from the judicial perspective, there is an application for leave to appeal to the Supreme Court that is pending. I am not sure if it has been argued yet, but there is no decision to the best of my knowledge as to whether the Supreme Court will hear it.

From a political perspective as to whether Parliament ought to get ahead of the Supreme Court on the issue, I have no difference with you at all. I argued at the time that this was not worth the trouble that would follow. My arguments fell upon deaf ears in the Minister of Justice's office at the time on the basis that we were told, we can do it so we want to.

It warrants some discussion as to whether or not there is any possible downside. I did the calculation you referred to as to how much money was at stake in the last election. I think your number is high. I may be wrong, but I thought the number was closer to the $300,000 level.

In the overall scheme of things, the amount of money at issue has probably been consumed in the litigation, if you consider the court as well as the lawyer resources. What we have done is to give voters two things to do with their votes. Not only are they saying that they want so-and-so to be elected to the House of Commons, they are directing a small portion of public funding toward the party they choose. Those electors who do not happen to be part of a collective 2 per cent or more do not get to disburse the money like other electors. That is a more fundamental problem than the perspective of the political parties involved.

If I vote for one of the so-called fringe parties, is my vote worth less? It does not make sense.

Senator Joyal: What is your position on that, Mr. Hébert-Daly?

Mr. Hébert-Daly: As I mentioned earlier, that is one of the fundamental problems. The value of someone's vote is in question here. One of the biggest affronts to democracy is that somehow if I were to vote for the Animal Alliance Environment Voters Party of Canada, my vote would somehow be worth nothing in terms of monetary value. However, the vote of someone who voted for the NDP is worth something. As a basic principle, that is probably what pushes me to believe and pushes our party to believe that this is just unacceptable. We said so at the Bill C-24 hearings back in the day as well, that we thought this threshold was inappropriate in a democratic and healthy democracy.

Senator Joyal: The other aspect of our review pertains to the definition of political party and how that definition is implemented by the Chief Electoral Officer. I heard Mr. Fergus pointing out some administrative difficulties because of the paperwork involved. Is there in the definition per se any element you feel is unworkable, or is it more on the clerical side that you feel it is too heavy to handle?

Mr. Fergus: I would move to the latter rather than the former. I do not think the purpose of the law would be to make anything unworkable. It is workable, but it comes at a cost. The cost is pretty heavy when we move away from the stratospheric heights here in Ottawa and down to what happens in each electoral district association, to depend on volunteers — and I am certain this is the case with the New Democratic Party — to serve as official agents or financial agents. The reporting requirements are heavy, especially compared to what we have been used to in this country in the past. I would suggest that the committee might deem it important to look more at that question, to find out what is actually happening at the local volunteer level for people to be involved in the political process and to try to share their views. It becomes a burden to find people who would serve as financial or official agents just because the reporting requirements are much higher than they ever were.

Senator Joyal: Mr. Hébert-Daly, do you want to comment that?

Mr. Hébert-Daly: I agree that the issue of volunteerism and the requirements and responsibilities placed on our volunteers is enormous. I am not sure it touches this bill necessarily. The 250 signatures every three years, while it is a bit more work for us, is not an insurmountable obstacle to the political process. That is why we find it a decent precondition to becoming recognized as a valid and legitimate political party. I certainly concur on the whole bunch of reporting requirements and the responsibilities we place on our volunteers. It is more and more difficult to recruit people to do that work, given the amount of regulatory framework in which they have to work.

Mr. Fergus: If I could add an additional comment, when the law came out in 2004 and we had to do the initial registration process, we discovered in our party a great number of party officers or so labelled by our constitution and, as a result, we had to get the right declarations and forms for them to fill out. As a result, we underwent a constitutional change to precisely reduce the number of officers so we would not be caught doing the same as what we would see for an established political party, almost nuisance types of administrative tasks.

Senator Joyal: Are we not punished where we have sinned? We wanted to make it a publicly funded system from a system funded from private sources, by the fact that most parties now receive the largest amount of their budget from government subsidies. At the moment you put government subsidies at hand, by that very nature you augment the bureaucracy with the check and counter-check. You cannot have it both ways. If you want public money, you will have to be transparent in the way you use public money.

Perhaps we should have thought better before changing the rules to a point where we have changed the nature of our political system in Canada. We have to live with those consequences. I am not sure I accept all the implications. As Senator Oliver has said, now our capacity to draft a will is limited. I could draft a will and give $5 million to the animal society of Canada, but I could give only $1,000 to the Animal Alliance Environment Voters Party. It seems to me that that is what we have done.

We have to understand that, when Parliament legislates, we legislate with all the negative aspects we expect to achieve. The objectives remain sustainable, but in the practicality of it, we have to live with the deeper consequences.

Mr. Fergus: To address your transcendent point about having to lie in the bed we created, I am not advocating for us to return to a non-publicly involved and funded system. I would argue, however, there is some tinkering we can do, and there are some unintended effects and burdens that fall upon volunteers to ensure they meet the requirements of the law. I suggest that perhaps we would want to look at that, without undoing the system and moving away from it, and still trying to achieve its overall goal, with the required and appropriate accountability to the public for the use of public funds.

However, just to correct concerning what would happen if someone wrote in a will that they wanted to give a contribution, that is permissible by the law. What we have addressed here today and what our concern is involves someone using private or unaccountable funds in order to register a new party. It is a funny aspect of the law, and I am certain Mr. Hébert-Daly would agree with this, that you can have legacy giving.

Mr. Hébert-Daly: Sorry to go off on a tangent, but legacy giving is useful here and makes sense even in the principles of the law. The idea is not to buy influence. When you have passed away, you will likely not benefit from much influence.

Senator Joyal: Maybe in the next world.

Mr. Hébert-Daly: That particular exclusion makes sense. I want to correct the record because Senator Joyal also mentioned that political parties receive most of their financing from the public purse. I would like to correct that. Our party receives just less than half of its financing from the public purse. It varies from political party to political party, but that is not completely true even today.

Senator Joyal: Let us say it is not always true.

Senator Andreychuk: I have a bit more on the same point but from a different angle. What the act changed was that our electoral officer now has the conduct of registering, and the words were added ``to participate in public affairs'' by a political party. The act controls those who want to come into a political process, not those who want to influence it.

Your example of the $4-million gentleman who will start up a party and then merge it but he can take all his assets with him is perhaps possible, but surely that is not going to be the probable way. People who have assets and want to influence a process will do so in third-party advertising and all those other things we talked about.

However, to form a political party and to truly want to be involved in public affairs through a political party, you have to go through this process at the outset. That, in itself, is quite a step. We put this threshold, I guess, to stop political parties being formed just so they can get access to money. If the threshold is removed — in other words, you have access to taxation the minute you are a political party — is that going to generate more parties and problems?

This act did not create many problems in the three years we have had it. It created 16 parties that are now registered which are not in the House, and there are three yet to come. That seems like a fair result. It is not unintended consequences. There is no fear factor in what we have seen in three years.

If they should remove that threshold before you get access to public funds, with this act as it is, will that generate more political parties of all stripes? I do not care about the man who has $4 million and starts a political party. To try to have an effect in Canada, $4 million will not go far. A lot needs to be done and there is a cost to starting a party.

However, if you know you will set it up and you have a reasonable expectation of return, will that generate more parties?

Mr. Hébert-Daly: My sense is that there is a lot more than just the registration process. We talked about 250 signatures and all those aspects but every year, actually every quarter, a political party is still required to be filing reports and doing the work. There is an onerous task of existing as a political party that goes beyond saying, okay I am registered, now hand over the cash.

Another aspect is that, if you are building a political party just for the purposes of your own cash, not many people will respond electorally to that kind of pitch. It seems unlikely that would be the product.

We have not seen it in the last two years. For that purpose alone, I feel relatively confident in moving forward. If we do start to see the snowball, I know the elections act is one of the favourite things of the House of Commons to change, so we can find ways to fix those problems if we start to see them rise up.

On the issue of tax credits, there are political parties in this country that, in the past, have had to stop using their own fundraising capacity to give benefits to other non-political organizations. If you look at the Elections Canada website, you will find there are political parties who have had to sign settlements with the commissioner of Elections Canada on these types of issues.

It has happened with political parties that exist now and it has been stopped. Therefore, my assumption in that context is that in the future, there are the tools necessary to stop it from happening as well.

Senator Stratton: I think most of my questions have been answered. When we are talking about contributions by an individual, I know there was that case in Manitoba where somebody gave $4 million. I think I know the individual.

Apart from that, has there been any evidence of this at all — of starting a political party after the law has taken effect?

Mr. Fergus: Not to my knowledge, no.

Mr. Hébert-Daly: In fact, some of the reports I have seen show the contrary — that these political parties are starting with very little money.

Senator Stratton: That is my assumption too.

The Chair: I have a quick question to Mr. Siegel. The other Longley case, the one in B.C. that went to the B.C. Court of Appeal, did it get appealed beyond that or did it just die there?

Mr. Siegel: I just discovered that case by accident. There is no record of any proceeding before the Supreme Court of Canada, so the bottom line of that Longley case appears to be — unless there have been technical amendments to the Income Tax Act — that a party or candidate can solicit a $200 contribution, bestow a $150 tax credit upon the donor and then buy that same donor a $200 present or give them $200 worth of employment, and end up having a $350 benefit flow back.

To be fair, the Court of Appeal was dealing with a cross appeal, so the Supreme Court in British Columbia not only said that was perfectly okay, but awarded Mr. Longley $55,000 in damages from the Canada Revenue Agency for interfering in his plan to implement this.

The Chair: We will probably inquire into whether the tax law has been changed or not. However, going back to the earlier point Mr. Fergus made about dominant purpose rather than one of fundamental purpose, I take it you think that would solve that particular problem.

Mr. Siegel: It deals with Senator Stratton's point that no one has done it as yet, and whether or not part of the exercise here is to be preventive as well as curative. I think you reduce the risk of an abuse if you increase the burden.

At the same time, last week the Chief Electoral Officer — I think rightly, given his paramount role as neutral arbiter — took a hands-off approach to how he might address any possible gray area a party might venture into. Perhaps as a parting shot, I could throw to you whether he is the appropriate official to be dealing with these questions.

Another official who is not at all concerned with getting his hands dirty in potential political misbehaviour is the commissioner of Elections Canada. Perhaps it might better fall upon the commissioner to check into the bona fides of parties in this fashion rather than put the Chief Electoral Officer into a difficult bind where he must at all times, not only be, but be seen to be, utterly neutral between political parties, even one that misbehaves.

The Chair: Thank you all for an interesting session. As is always the case, the more you look at something, the more fascinating it gets. We are grateful to all of you for appearing today.

We now have the pleasure of hearing witnesses from parties not yet represented in the House of Commons: Liz White, leader of the Animal Alliance Environment Voters Party of Canada, the Honourable Sinclair Stevens, P.C., leader of the Progressive Canadian Party, and Laurel McCallum, representing the leader of the People's Political Power Party of Canada, which is not yet registered but which has been ruled eligible for registration.

Ms. White, please proceed.

Liz White, Leader, Animal Alliance Environment Voters Party of Canada: I am the leader of the Animal Alliance Environment Voters Party of Canada, which is an amalgamation of two organizations that were involved in third- party electoral politics prior to the ruling that third parties were limited in what they could spend; the name is long so we will probably change it. I am running as a candidate in a by-election as one of my major activities involved in electoral politics.

Perhaps with the exception of the Canadian Charter of Rights and Freedoms, no single piece of proposed legislation has done more to enhance the democratic rights of Canadians than an act to amend the Canada Elections Act, section 24, currently before the Senate.

The act was Parliament's legislative response to Figueroa v. Canada (Attorney General) and served to reduce the regulatory barriers to registering a political party. Prior to Figueroa, Parliament had passed legislation that barred anyone except a registered political party from participating effectively in elections. The Supreme Court of Canada recognized that election advertising spending restraints on so-called third parties, which is what we were before, were an infringement on Charter rights. It judged they were demonstrably justified in a free and democratic society and upheld them in Harper v. Canada (Attorney General).

One of the Animal Alliance Environment Voters Party's parent organizations, Animal Alliance of Canada, intervened in this action with Mr. Harper at the time. It remains a disappointment to us that Mr. Harper has not acted to restore the democratic rights of third parties, which he championed when he was in opposition. Concurrent with barring third parties from campaigning effectively in elections, Parliament also set conditions for registering political parties so onerous that they barred many citizens and organizations that represent legitimate public policy interests from forming political parties.

Parliament's will was that elections were to be the exclusive domain of major political parties and no one else. The deficiency of this view and testimony to the democratic necessity of the act is being demonstrated in the March 17 by- election in Toronto Centre where I am a candidate. Only through elections can Canadian citizens directly hold their governments and members of Parliament accountable for their policies and performance. Election laws that shield MPs and governments from that accountability can entrench policies that advantage the economically and politically powerful, while gravely harming the impoverished and less powerful. Such laws prevent voters from hearing public policy insights that might help them choose how best to cast their vote in order to influence public policy.

Such laws effectively bar from the election discourse issues that, while politically inconvenient for candidates of the major political parties, profoundly affect voters' lives. An example is how Alberta's development of the tar sands impedes Canada's effort to address climate change. Most Canadians agree that climate change and how Canada responds to it are crucial issues. Some scientists argue they are life and death issues. Yet, the most important aspect of the climate change issue in Canada would have received minimal discourse in the recent Toronto Centre by-election were it not for our party and my candidacy. Canada cannot address climate change if the Alberta tar sands continue to be developed at the current rate. In the context of this committee's review, the merits of these two statements are not important. However, it is important to raise them during an election for the consideration of voters when the major parties decline to do so out of political expediency.

The Chair: We have a copy of your presentation, and we will want to put questions after hearing from all the presenters. If you wish to skip some portions of your presentation, it would be fine with us.

Ms. White: I am fine with leaving it as is.

The Chair: Mr. Stevens, please proceed.

Hon. Sinclair M. Stevens, P.C., Leader, Progressive Canadian Party: Since preparing the remarks that have been circulated to you, I felt I would take the opportunity, as politicians learn to do, to take advantage of a situation in Ottawa. I received the Ottawa Citizen this morning and read the headline, ``Gomery: Canada on road to `one-man government'.'' Mr. Gomery is concerned about another issue but it is startlingly vivid to us how serious is the question of how democracy is on the decline in Canada.

Mr. Gomery's contention is that the Prime Minister's Office is overwhelming the bureaucracy. I would like you — and I will take your word, Madam Chair, literally of not necessarily referring to my prepared remarks — to consider the magnitude of the change that has occurred in our political system. If Mr. Gomery is concerned about over-control of the bureaucracy, I feel you in the Senate especially, and this committee in particular, should be concerned about whether we have lost true democracy to some extent.

In my remarks, I point out that in our Constitution parties are never referred to. There was no such concept at the time our Constitution was accepted. I found it remarkable to listen to the first hour here today and hear the concern expressed about what those little new start-up parties might do and the disasters that might happen. At a previous session, I noticed a senator question what might happen if the Hell's Angels should form a party. The problem is not with the small parties. It is with the big parties.

Let us not forget, we call it the House of Commons. It is not the House of big parties but that is what is evolving. When you think about it, a big party raises this question — what would happen if somebody puts $35 million into a new company just purposely to merge it somehow or other with a registered party and, lo and behold, he has $35 million of a war chest. What do you think the big parties have? They have multi-million dollars of goodwill. On a balance sheet, that could be shown at least at $35 million as an asset and yet that seems to get overlooked.

In my remarks, I point out there is a serious conflict of interest here. I realize we do not want to in a money sense get into the American situation where you are talking of tens or even hundreds of millions of dollars to fight elections. But think, once you come into saying, let the public purse pay, how you have to be on your guard. Who calls the shot as to what gets paid? It is the people that are the recipients. In the first year alone, 2004, the main political parties are taking in $28 million per year from the public to finance themselves.

Is it not startling that they appeal when a small party says, ``We think we should at least vote by vote get pro rata with you up there who are getting $28 million a year.'' Is it not remarkable that, at the low court, the government chooses to appeal that? The low court found it is unconstitutional. The government said, no, no, we will go to the Court of Appeal, and as happened with the Figueroa case, the Court of Appeal also went with the government. Hopefully, it will now go to the Supreme Court but what I am saying is — is this not out of perspective?

You in the Senate have less of a conflict. You are at least not having to go back and get elected and depend on these public funds, but I would think perhaps this committee could come up with some interesting recommendations, or perhaps the whole process should start being amended at the Senate side and let it go back for final ratification to those who have this conflict.

If I do nothing else today, I hope to put a different focus in your minds as to what is the real problem in Canada today. At one time, certainly when I was elected in 1972, leaders never had the exalted role in the Canada Elections Act that they have today. As you know, they can go into ridings and say we do not like the candidate that association would like to send to Ottawa. That never used to be. When I had the nerve to say in 1972 that I would run in what was then York-Simcoe, the party brass said no way. The leader did not have the power to stop me. I said I had the democratic right to run in the riding and I ran. I defeated the Liberal incumbent, who in turn had defeated Senator McCutcheon. I hope that will never happen in the future.

Thank you for the opportunity to share my thoughts with you. I look forward to your questions.

Laurel McCallum, representing the Leader, People's Political Power Party of Canada: That is a hard act to follow. I will be summarizing the address I sent to you. In answer to a comment from one of the senators about stopping small parties from forming so that they will have access to the money, I want to say what money? At this point, as an eligible party we are in a gray spot where we do not get money. We do not issue receipts for donations because we are not a fully registered party, so we really are dependent on the goodwill of the people who support us, which in reality is what other colleagues have alluded to here today.

It is in the riding and it is the sentiments of the people, not the money, and in the address it says we have two choices today — money or no money. It really is unbelievable to think this country should be going ahead on the basis of money.

I began my address with an allusion to the recent remarks by the Liberal leader, Stéphane Dion, saying that if he had money he and his party could be powerful, but since they had no money at the moment, they are weak and could not go forward. That is really the basis of what this address was all about and it has been mentioned as well many times today.

We are stating that there is no balance and we agree with Mr. Dion and others that there is no balance. What we are trying to do as a small but eventually big party is to provide that balance and look for it.

We know we can do it. We know we can do it without money. We are doing it without money but the rules make it challenging for our party to exist. It is understandable that so many small parties disappear due to lack of funds. It is like David and Goliath, as I said in my address.

To summarize, when all the parties met in 2006 to discuss broadcast time, it was to be a democratic process but, if there was no consensus then the arbitrator made the final decision, despite the fact that the vote went 10 to 15 in favour of equal minutes of broadcast time. As I said in the address, because there was no consensus we reverted to the status quo. Now, the Conservatives at the election can purchase 99.5 minutes of broadcast time, the Liberals 86, the NDP 47, the Bloc 39.5, and the Green Party 23.5 and so on.

Our party can purchase six minutes. When the arbitrator was asked about the cap on advertising spending, he acknowledged the reality was, if you had enough money, you could buy as much advertising as you wanted.

As a new member on the scene, I do not quite understand these loopholes and am dismayed by them to tell you the truth.

Even if we become fully registered and our name is on the ballot, our allowable minutes of broadcast time do not change until the next election since allocation of minutes is based on the percentage of popular votes gained in the previous election, as well as the number of seats the party has in the House of Commons.

There really is no balance in the most basic right at an election time — the right for the public to be given information and make informed choices. Frequently, I hear at election time: Who is running? What is happening? Who is there to vote for?

Again, what we find at election time, or at a very important time, is that we are given a choice based on the most powerful advertising.

I would say that the foundation of this act is totally flawed because it really does not have balance at its heart. We are seeking balance and honesty for the country. We ask you: What is the importance of shaking hands? What does it mean? How do we go forward? A handshake is about balance, evenness and honesty. If we are not honest inside ourselves, we should not be in leadership. It is not about the big versus the small. It is about the goodness, honesty and transparency of the party.

I truly believe that this Senate provides the balance of what is going on, and I agree with my colleague about his remarks. Without this type of balance, we have a skewed government that can really verge on dictatorship, which is something we never want to see.

Thank you for the opportunity to speak this afternoon. I am happy to be here and to answer questions.

The Chair: Thank you to all of you. We will now have questions, beginning with Senator Oliver.

Senator Oliver: The reason we are here today is that there were amendments to the Canada Elections Act in 2004 — that is, the Canada Elections Act and the Income Tax Act by virtue of chapter 24 of the Statutes of Canada at that time. There were a number of amendments that affect political parties. One of them was that you have to file a declaration of the party leader confirming that the objectives of your party are consistent with the act, and every three years you have to supply the names and addresses and signed declarations of 250 electors who are members in good standing of your party.

What do the three of you think of that new set of requirements? Do you think they are necessary?

Ms. White: We have no trouble signing the declaration or getting the 250 names. However, I do believe that for parties starting in a different place than we did, 250 names is sometimes a barrier to actually getting a party formed.

If the idea is to increase democracy and people's ability to vote for parties with other opinions, we might want to take a look at that. It has not been onerous for our party at all.

Senator Oliver: Do you think it is necessary?

Ms. White: I have no problem signing a declaration saying our main activity will be involved in public policy and electoral politics. My greater concern is trying to figure out how to get 250 names and to have someone look at the names and say they all came from a small town in Saskatchewan or a suburb in Vancouver and, therefore, not across the country. I do not think that makes any difference. I do not think we need the 250 names.

Senator Oliver: If there were an election in Canada in the next six months or so, approximately how many candidates would your party intend to field in that general election?

Ms. White: That is a good question. We were registered in the 2006 election so we have been in existence for a couple of years. Essentially, what we have done through this period of time is ensure the people who belong to our party understand what we are doing, and raise money to ensure that there is proof of concept and that we can actually pull it off.

What is interesting is that many people involved in our organization, our political party, have not been innately political, so there is a big learning curve for everyone. We have to go through that process.

Second, fielding two or three candidates does not sound like a lot, but the reporting requirements, the amount of money you have to put forward and the control on how that money is spent is enormous for a small political party. When I ran as a candidate, we went through three audits in six months to meet the criteria of the Canada Elections Act. I did not find that particularly problematic. It was a steep learning curve. However, if you add four or five more candidates who are not as familiar with the act, raising money and doing those sorts of things, it is an enormous hurdle for small political parties to get over.

Senator Oliver: What would the others say about the declaration and the 250 names?

Mr. Stevens: As far as a declaration is concerned, I think that is probably worth retaining. I do not know why a party would not want to sign a declaration.

As far as the 250 names are concerned, whether that is the right number, I do not know. We did not find it a particular problem.

One of the indirectly helpful things is that it gives you a reason to call people and say: It is fine for you to say you are a supporter, but we want you to be a member. We need at least 250; will you come along? As far as the future is concerned, our goal would be — depending partly on when the election is called — to field at least 100 candidates. We are conscious that, while we feel we have inherited the main carriage of progressive conservatism as a philosophy, it was a term first used by Sir John A. Macdonald in 1854.

Senator Oliver: I am not so sure that is lost.

Mr. Stevens: Well, I do not know. As far as I am concerned, we intend to identify what we think would be part of what we call a prosperity Canada program. There are various aspects of that where we can identify who our constituents should be, and that is what we will go after.

Senator Oliver: Mr. Stevens, when you started your presentation, you referred to Judge Gomery and you provided the example of the power of the leaders of parties to not sign the certificate of designation. I remember when a leader, Robert Stanfield, in Moncton, New Brunswick, would not sign for Mr. Jones who was mayor of the city of Moncton, but he did not get his certificate signed to be a member of the party. There were sanctions even back then.

Mr. Stevens: Yes. That was more within the party itself. It is almost taken for granted now that a leader's signature must go on a candidate's papers.

Senator Oliver: As it did then.

Mr. Stevens: That is right. However, what I feel has gotten a bit out of control is the Conservatives challenged, for example, four at one time. The Liberals challenged our friend out in Saskatchewan, if you remember.

It is so foreign to our constitutional approach to representative government that, as I point out in my remarks, 308 members are supposed to be reflective of 308 constituencies. Granted, you have to congeal in order to get some order. That is where the parties come in. However, to go to the other extreme of where a leader can say exactly who he wants to be included in that 308 is giving him tremendous power.

I think the reason for the confusion is that we get bombarded with the American system where they elect a president, but that is fundamentally different from our system. The essence of our system is 308 representatives from across the country who choose, in their wisdom, to support a first minister. When you reverse that, it is dangerous.

The Chair: Senator Oliver, as you know, at some point — from what I understand, it could be most any time now — the bells will start ringing for resumption of the Senate sitting. We have permission to sit while the Senate is suspended, but not when it reconvenes. Can I put you down for a second round in an attempt to get as many people in as possible?

Senator Oliver: Sure.

Senator Merchant: I found all your comments interesting, but I am particularly interested in the comments of Mr. Stevens because he has been part of the system.

I was reminded by you that, in the beginning, there were no political parties. I think once we started putting the political affiliation on the ballot, we slowly started giving away the power from the individual to a higher person. The leader had to agree that you could run for that party. He can refuse, as you said, to approve candidates. Today, they can even appoint candidates and bypass the whole nomination process because they have all these powers.

Then, with the tax credits, candidates have to sign funds over now to the party. When they raise funds, they cannot keep them for their own constituency. That money goes over to the political party to which they belong.

The whole process — and you have been part of it because you were here for a long time — has turned democracy upside down. Now you are worried that the Prime Minister's Office is very powerful. What is the solution? You say we can effect some kind of change as a Senate. What basic change are you looking for to make it more democratic?

Mr. Stevens: It is not unusual when change occurs for the ball to swing too far the other way. I think there was a danger that, if we left funding heavily to the private sector, you had big donors — for example, banks giving $50,000 a shot to a party. Sometimes when I was on fundraising in the Progressive Conservative Party, they were very open in saying we want access if we give you this kind of money.

Senator Stratton: Yes, I do recall.

Mr. Stevens: That was not right. On the other hand, to say there should be no corporate giving — with the severe restrictions now of only $1,100 per person — and at the same time, parties have funds like they would never have believed coming out of the public purse, I think the ball has swung too far that way. The idea that because someone voted for you, there is $1.75 every year then going to that party is too much.

I think maybe the $1.75 is too high. I am not sure how it can be rectified, but I would say more liberal private funding should be restored and there should be less public funding to get a better balance here.

Senator Merchant: What kind of Parliament do you envisage with, say, 15 or however many parties?

Mr. Stevens: I noticed that point was raised, and it may have been Senator Stratton who raised it. We must not forget that three of the parties in the House of Commons at the present time started as small parties. It is interesting that the Reform Party was essentially a Western alienation type of party that grew and found they could not become national. Therefore, through an unfortunate merger with the Progressive Conservatives, they ended up squashing that party and now claim they are a national party.

Think of the Bloc. The Bloc is essentially reflective of Quebec separatism. The NDP started off as essentially a union-oriented socialist type of party, but it was small.

Small parties do become big. That is why I do not think we should be too fearful of small parties. If one or more of them becomes big, so be it. If we go the other way, that is where we get into serious trouble.

The Chair: Just before I go on, I realize that I cut off Ms. McCallum before she had a chance to answer Senator Oliver's question about whether the leader's declaration and the 250 members are excessively onerous for a new party.

Ms. McCallum: We do not find it onerous at all. We appreciate a lot of these checks and balances within the act. It gives us a chance to be out with the grassroots.

We do not require a membership fee because many of the people we talk to do not have the money. When we speak to them, we know we are representing them. It is really our voice for them. We appreciate the fact that we are in touch with them.

Senator Joyal: I understand from your briefs and presentations that all of you support the position that the $1.75, as long as it stays in the legislation, should be accessible to all parties, independent from the threshold that is presently part of the legislation.

Ms. McCallum: I did not really speak to it before, but it is not a big issue with me.

Senator Joyal: Can you can live with the threshold as it is?

Ms. McCallum: Yes. It is a formula. To me, it is not the essence of what we need to do, but it is fine.

Senator Joyal: Mr. Stevens, I understand your position is that it is unfair and undemocratic.

Mr. Stevens: That is right. It was brought up earlier. We are not talking about big money here. In 2004, if it had been available, it would have been $189,000. With the other parties collectively getting $28 million, you can see how ludicrous it is. Yet $189,000 for those individual parties would mean something.

Ms. White: On top of that, the more important issue is that, if you vote for one of the bigger parties or someone who meets the 2 per cent threshold, that voter's vote is worth $1.75. If you vote for our party, it is worth nothing. I would argue it does not matter how much the small parties or big parties get. It ought to be an equitable application so every vote is equal, no matter who you vote for.

Senator Joyal: Mr. Stevens, does it not sound weird that now the government intrudes so much into parties' business? At the very moment you give public money to a party, you enter the world of bookkeeping and bureaucracy, of having to control because the one who pays is the one who calls the shots. The public expects that, if public money is channelled to parties, the parties will have to answer for the use of their money.

Is it not, as you stated, contrary to the very essence of what we think democratic life should be — uncontrolled by government bureaucracy?

Mr. Stevens: I agree. In my remarks, you will notice that I mention those three parties that, at one time, were small and are now big. One is even the government. They could not do that under the new rules. They would likely have found it so hard to cope with the existing Canada Elections Act, the related matters and, if they were starting up, the lack of funding, they would never make the grade now.

I think it is inherently wrong for that type of thing to happen in a democratic country. I think it was well meaning to get away from the big, private fund or corporate donors. However, we have lost sight of something when you shift into a Parliament that can increase that $1.75 to $3.50. There is nothing preventing them from doing that. It is not right. The people who are the benefactors have it within their power to pretty well say what they will get. The number of things that a sitting MP gets today compared to what I got in 1972 is unbelievable. We are talking tens of millions of dollars that were never spent back then.

Senator Joyal: Do you think the principles of the responsible government system have been changed by the very over-creation of political parties in the system, as well as by the interests they have to serve for re-election within the parameters of the system?

Mr. Stevens: I will put it even stronger than that. I think the Westminster model we have followed is, if properly respected, a better model than the American model. However, we should not fall someplace in-between. The nice thing about the Westminster model is that you have truly responsible government. The first minister must keep the confidence of his House or he is no longer prime minister.

In the American system, they choose, as one thing, the president who is the commander-in-chief. That is very significant. In addition, he is the senior executive. However, he still has no dependence on Congress. Presidents can veto, et cetera. However, his tenure is for four years up to eight years. The tenure of our prime minister is at the will of the House of Commons and then, eventually, the public.

When you get a system rigged where that is not practical anymore, where you do not really have 308 members coming in, and it is at the choice of those ridings as to who will come here, that is the threat. Once you have an overly powerful prime minister, it would be worse than having an overly powerful president in the United States. You have no checks and balances. He is king.

Senator Joyal: Do you feel the way the Canada Elections Act has developed over the years has enshrined that potentiality into the system so that, in fact, the democratic equality of the Canadian system has been reduced?

Mr. Stevens: That is correct. We are talking about the House of Commons. However, the media is so focused on leadership. Some member of Parliament may have a wonderful idea, but he is not news. It is the sound bite they are looking for. More and more, it is the fixation, whether you like Mr. Layton, Mr. Dion or Mr. Harper. An election is only a 30-day affair. It sometimes turns on very incidental things and not on substance. It is not a true reflection of what people think.

Senator Stratton: Are you saying that Kim Campbell was right?

The Chair: Mr. Stevens, I must ask you to speed up.

Mr. Stevens: My respect for our parliamentary system is high. I hate to see what is happening to it. You in the Senate are in a rather independent role. You can do something to ensure that we do not lose the best democratic system in the world.

The Chair: Honourable senators, the trouble is we do not know how much time we have. There is a risk you may be cut short.

Senator Milne: For the record, I should mention that I think the case you were mentioning, Mr. Stevens, in Saskatchewan was when a man called Jones — was it in Moncton?

Mr. Stevens: I was referring to David Orchard.

Senator Milne: For the record, I should say we are limited in what we can do right now in this committee. We are mandated to look at the last changes to the Canada Elections Act and comment on them. That is what we are doing. Although some of your suggestions, Ms. McCallum and Mr. Stevens, are interesting, they would require a further mandate to this committee to be able to go on to them.

The Chair: We can mention in our report what witnesses have told us, if we choose to do so.

Senator Milne: We certainly can, which is interesting. I will ask you the same question that I asked the two major parties that were here earlier on. One of the suggestions they made — and it is in the Figueroa case — is that a minimum of 50 candidates was unconstitutional and, as a result, the new elections act brought it down to one candidate to be a party.

Do you think that one is the right number? In union parlance, one is an individual and two is a party or a union. What do you think of that?

Mr. Stevens: I do not think it has much consequence. If one is too low, why is two okay? I suppose that union argument is relevant but there are so many more important things at stake in what is in front of you that I would not worry too much about recommending if it should be two or ten or anything like that.

I took encouragement from what the Chief Electoral Officer said while he was here. He got away from your immediate mandate and explored a few things. That is where you can be meaningful. I do not think people feel that what happened in 2004 should be reversed or that there is anything too seriously wrong with it. If that is so, how can we improve?

If you took that opportunity, I think a lot of people might listen.

Senator Milne: Ms. McCallum?

Ms. McCallum: I believe one is fine; it is sufficient. It is a voice. It is a voice of 250 for sure and an executive of at least three. I think it represents the people, but it serves the people and it must do it well. It is working with a lot of people.

Ms. White: I think one person meets the criteria. My experience, having sat in on the Chief Electoral Officer's meetings, is that the small parties around the table are committed politically and are making every effort to do what they are able to do to participate in electoral politics. I do not think the fact they have just one person in any way indicates they are trying to get away with something in the system.

Second, I think that having a one-person requirement allows the new political parties to begin to build up their political abilities, just as our party is. We are proceeding through a significant education process with people in our party to understand the political process, the Canada Elections Act and the responsibility that is taken on when you run as a candidate.

Our party has not done that before, except for me, and so it is a big learning curve, and I do not want to be punished while we are going through that learning curve in our ability to try and get more people elected or on the ballot.

Senator Andreychuk: I have a short question for Ms. White. I read your brief. You say on March 17 that Bob Rae will be the member from your riding. You have already conceded the candidate from the Liberal Party as the winner.

Ms. White: I am looking at the reality of the situation. I said in all my talks at all-candidates' meetings that I like to be straightforward and honest about what will happen. I think Mr. Rae will win with more votes than all the rest of the parties combined. Whether that happens or not, we will see what happens on Monday. I would love to be elected, but I do not think that will happen.

Senator Andreychuk: I hope you work a little harder between now and March 17. Who knows what might happen. That is the political process. You seem to have conceded, and I find that depressing. I would have hoped you would have gotten your message across and tried. Hope springs eternal in politics. We often have results that cannot be measured by polls and is our own inclination.

In your second statement, you say the third-party election advertising expense limits in the elections act are so low that, if the Animal Alliance Environment Voters Party of Canada was not a registered political party, this literature distribution would not have been possible. This issue could not have been raised effectively.

Are you saying you formed a political party because you found the third-party election expense limits ones that you could not live with?

In other words, you did not choose to be a party? You chose it as the alternative because you could not get your message across through third-party advertising?

Ms. White: Since 1998, we acted extensively as a third party in federal, provincial and local politics. We intervened with Stephen Harper in the fight against limiting third-party spending and lost at the Supreme Court, and the problem is that you are exactly right. You simply cannot impact how people will vote with $3,000 in a riding. It is not possible. You cannot buy election advertising. You could not buy enough literature to put around. When we looked at this and our inability to participate meaningfully in electoral politics and that became an impossibility, we decided the opportunity was there to form a political party and be actively involved and engaged in electoral politics, which we were, except we are now as a registered party.

Does that answer your question?

Senator Andreychuk: That is one of the unintended consequences of the third-party election expense limits.

You are now utilizing this bill, and we should comment on it.

Ms. White: Let me clarify. In a sense, I think we are not utilizing. We are a political party with a particular point of view that many people hold across this country, and whether we reflect that view as a third party or a political party, we are simply reflecting what the rule book says. Honestly, now that I have been involved as a political party, I think it is probably the way we should have gone from the beginning, except we could not meet the 50-candidate criteria. We were left with the option of a third party, but now that we have this possibility, I think ultimately we have the potential to be more effective than we were as a third party. It is a much better way to go, and so I think in a sense we were forced to do something that would end up being much better.

Senator Stratton: I would like to get to two points that have been discussed this evening. One is the evolution of political parties and we have two examples historically from the West, one being the CCF to the NDP. Here we have them today sitting in Parliament and they just started off with the idea of a few people.

I was at the initial meeting of the Reform Party in Saskatoon around 1987. It was an idea. They elected Deborah Grey and that evolved, and it became the Alliance Party which merged with the P.C. Party, and we have the Conservative Party today. Those ideas happen in democracy today, so I think the system works with those two examples — one old in the CCF/NDP and one relatively new from the 1980s.

I look at that and say, while there are problems with the system, we still have a pretty good democracy when you see these two examples that happened, old and new. Could I have your comments on that?

I have a second question with respect to private donations. I would like to get your response on that later.

Ms. White: You are exactly right. We now have the ability for ideas to come forward, to be taken by a political party and to see whether they have roots and can grow. Maybe they do not but it provides that opportunity.

I would point out, for example, with parties like ours, which many people see as a fringe party where we talk about environmental and animal protection issues, in Holland, with proportional representation, they have elected two animal protection people to their national Parliament. It has allowed ideas, as you stated, to percolate, come forward and then be reflected in Parliament. It is important.

Senator Stratton: I am a believer in proportional representation, as obviously you are, because I think you need those minor parties as they do represent a percentage of the population that vote. Therefore, should they not have a place in Parliament? I believe they should.

Ms. White: I think so, too.

Ms. McCallum: I think the system works but the attitude is wrong. The system could be fabulous if people had a change of heart, if they realized that we have so many resources we could be using if we did not keep thinking about the money and the power.

Concerning money for advertising, I have to disagree that it is really important. I believe that word of mouth and radio in the old days — I know I really was not there — all these things seemed to work. We got people out in greater numbers than we do today. It was the sentiment of the people with the desire to follow the leader that they really believed was going to serve their purposes.

We are way off base when we focus so much on money. We need to change our attitude and work together to figure out how to achieve a balance. If we do that, everything else follows. I know it sounds ideological and philosophical, but if it is at the heart of things, every time you look at something you say: Will this make sense? Will somebody be disadvantaged? For instance, you can give as much as you want in your will, which is an advantage in terms of legacy and a party that continues to build for generations. That kind of thing we would look at with fresh eyes and say it does not make any sense and it does not serve anybody.

I believe the system works but the heart has to change.

Mr. Stevens: If we look at the Reform Party, I feel that could not repeat. When we say the system works, the past system did work. However, today, think of the problems if you are a new party. They are passing new legislation that says you cannot even borrow money, or at least that will be the intent, unless a bank or financial institution lends you the money. That obviously will not affect the larger parties because they are bankable. They can go and get a few million. We in the Progressive Conservative Party had a standing credit with the Canadian Imperial Bank of Commerce for $5 million. There was no question. We never even had to pay interest on it.

Senator Stratton: We owed our souls to the bank, sir.

Mr. Stevens: Now, the guillotine has come down on that. You cannot get money from corporations. When you are starting a new party, you need sizeable funds. Well, that is gone now. All you can do is find 10 people who, at most, might be able to give you $1,100 or whatever. It would be difficult to repeat what the Reform Party was able to do. My anxiety is that we have gone too far, as I said before. It has gone to the point where, if you are a fat cat and are one of the existing main parties, obviously, you are happy. If you feel $1.75 is not enough, you are one bill away from getting more, whereas the new party has nothing like that. It used to be a much more level playing field. As you probably know, Paul Hellyer established the Canadian Action Party. I do not know whether they will be here.

The Chair: They will not.

Mr. Stevens: He spent $2 million trying to get that party going. I think that is the magnitude of the problem. He was very dedicated. He felt the country had a problem and he wanted to do something politically. I think it is unfortunate. That is not possible now under the existing structure.

Senator Stratton: Mr. Stevens, you say there should be some form of private donations. I remember the bad old days when the partners at a firm would sit around the table and decide to contribute to the various political parties. There would be so much for this or that party. It happened all the time. It did not matter who the firm was — architects, lawyer, engineers, et cetera. If you allow private donations with a limit of $5,000, then they will sit around the table again and do the same thing. In other words, you will destroy the intent of the system.

I am almost certain that most of the money for the Reform Party came from individual donors. It was not corporations. It was small personal donations. There was not any money, but they had this idea and it snowballed. Even today, the Conservative Party gets 90 per cent of its funding from individual small donors. I say that is an example of the system working under the current law.

Mr. Stevens: I would like to respond to that. They may get 90 per cent of what they receive on the private side from small donors. However, that is after they have nearly 70 per cent of public funding. That is where I feel there is such a startling contradiction. I agree, maybe corporate donations had their problems. However, it is not right when the people who are in government and members of Parliament generally have the power to say we want even more. This is not right.

The way you heard people here today was interesting. Those sitting in the House came in to tell their side. If you need other evidence, those of us not in the House have a different view.

They, I think, have access to funds that we are going to regret 10 or 20 years down the road when people say how did we lose true democracy in a representative sense in this country? I think you will find that incumbents will be finding it easier and easier to get re-elected. As far as money is concerned, they will propose an amendment to the act to even get more money.

Ms. White: I do not know whether any of you have done fundraising with small donors, but I do it all the time. It requires money to do it. If you start a small party with a no-name base, you are already behind the eight ball. It makes it difficult to raise the substantial funds required to participate meaningfully in an election across the country. It is really difficult.

Senator Stratton: Did the Reform Party not start off very small?

Ms. White: Yes, and that is my hope. We started off really small and I think we have potential to grow. The Liberals, Conservatives and NDP have an established membership. However, the problem for the small party with little name recognition is building the cash flow to build on the membership allowing you to participate meaningfully in elections.

Mr. Stevens: We have referred to the Reform Party that became the Canadian Alliance Party. We should not overlook that one of the driving forces for the Alliance Party to want the merger with the Progressive Conservatives was money. They were bankrupt on a cash basis and were not able to repay the credit they had.

Senator Stratton: I thought that was the Progressive Conservative Party, sir. I was on the executive at the time and we owed our soul to the bank.

Mr. Stevens: I would like to explain how relevant what we are saying is. The Alliance did not have any agreement as the Progressive Conservatives had. Doug Bassett was the one who arranged with the Bank of Commerce that the loan was on a never-never plan. If you look at the Conservative Party after the merger, you will see that loan was still there, whereas their loan got paid off.

Senator Stratton: I will disagree with you there because both loans were paid off. The Reform Party had the money to give and pay off the debt of the former Progressive Conservative Party. That is exactly what happened.

Ms. White: Would that be allowed under the current rules and regulations?

Senator Stratton: A merger of two parties, yes, because you are merging two accounts.

Ms. White: And all the money as well?

Senator Stratton: Yes.

The Chair: I want to thank the witnesses. We are grateful to you for such an interesting session. For the record, we wanted to have Jean-Serge Brisson, Leader of the Libertarian Party of Canada, but he was not able to join us.

Colleagues, you cannot leave. There is another small piece of business we have to attend to.

The next item is the draft budget. I believe we all now have copies of two draft budgets, which the steering committee has considered and approved. Could we turn first to the one that concerns the review of the study we are doing right now — the review of the amendments to the Canada Elections Act and the Income Tax Act.

So moved. Are there any questions?

All in favour? Opposed? Abstentions? Carried.

Then we will turn to budget authorization for studies of legislation.

Senator Stratton: I am always curious about this because it is proliferating across the board with respect to committees.

Have we actually sent anyone to a conference?

The Chair: We have not in recent years.

Senator Milne: This committee did in the past send the clerk.

Senator Stratton: We are always concerned about this because, when sitting on other committees and going through budgets, we want to be careful we are not padding the budget. I do not see that here but I have seen it in other committees. I think it is important and I am going to push for a review on how budgets are formulated across the board because of the tendency of some committees to pad; however, I support the budget.

The Chair: For your information, Senator Stratton, it has been standard for a number of years to make provision for two conferences, which we have not in recent years used but we are talking about the law and there are interesting conferences that might be directly pertinent to something.

Senator Stratton: I do not see abuse, but I appreciate that.

The Chair: Did I hear a motion? So moved by Senator Andreychuk.

All in favour?

Hon. Senators: Agreed.

The Chair: Opposed? Abstentions? Carried.

Colleagues, I thank you very much indeed.

The committee adjourned.