Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 6 - Evidence, September 7, 2006 - Morning meeting
OTTAWA, Thursday, September 7, 2006
The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill C-2, providing for conflict of interest rules, restrictions on election financing and measures respecting administrative transparency, oversight and accountability, met this day at 9:05 a.m. to give consideration to the bill.
Senator Donald H. Oliver (Chairman) in the chair.
[English]
The Chairman: Honourable senators, I wish to call this meeting of the Standing Senate Committee on Legal and Constitutional Affairs to order. Today, we are studying Bill C-2, providing for conflict of interest rules, restrictions on election financing, and measures respecting administrative transparency, oversight and accountability. The bill is more commonly known as the proposed federal accountability act. As senators, our witnesses and members of the public, both here in this room and those Canadians watching these proceedings on television, know, this bill reflects a central portion of the new government's agenda and is one of the most significant pieces of legislation brought before Parliament in recent years.
I know that the committee will give the bill the extensive, careful and detailed study it deserves. The hearings commenced in June and this week the committee is focusing on more precise aspects of this bill. Subjects that will be covered this week will be accountability generally, ethics, and conflict of interest and political financing. In particular, we are hearing today from different political parties. Our hearings will then continue in the next few weeks on other important aspects of this bill.
Our first witness today is Mr. Michael D. Donison, of the Conservative Party of Canada.
[Translation]
On behalf of the committee I want to thank you for joining us. Without further ado, I would like to turn the floor over to you. After that, we will go to questions and have a discussion, which should prove very beneficial to committee members.
[English]
Before you begin, I will remind honourable senators that today, unlike other days, we have one hour for each witness. When it does come to question period, please keep that in mind so all honourable senators will have a chance to pose questions to our witnesses.
Welcome. You now have the floor.
Michael D. Donison, Executive Director, Conservative Party of Canada: I have distributed to all members of the committee, in both official languages, the text of my remarks. I will make a few introductory remarks and then I will answer questions.
Thank you, honourable senators, for your invitation for me to be here today with you. I was remarking to one of my staff that this is the first time I have ever had the opportunity to appear before a Senate committee. Therefore, I consider it a privilege to be able to meet with you.
I should like to extend thanks on behalf of the Conservative Party of Canada to the chair, as the bill's sponsor, and to the bill's critic, Senator Day, for the excellent work that your committee has been doing.
This committee has a mandate to examine legislation and matters relating to legal and constitutional affairs generally, including such things as federal-provincial relations, the judiciary and the administration of justice and law reform. That is in part why I am here today, because the bill deals with legal electoral reform. I am here to address those provisions of Bill C-2 that deal specifically with Canada's electoral process and the proposed amendments to the Canada Elections Act that relate to the reform of the financing of Canada's political parties.
Bill C-2 introduces two basic electoral reforms: First, changes in contribution limits to political parties, as well as to candidates, nomination contestants, electoral district associations of political parties and leadership contestants of those parties; and, second, a long overdue change in the method of the appointment of returning officers. I am specifically referencing in a substantive sense, for reference of honourable senators, the main substantive provisions that are referable here, namely, clause 45 of the bill. That is found at page 58 of the bill that is now before you. That clause specifically proposes to amend section 401.(1) of the Canada Elections Act in regard to limits of contributions. I reference now clause 174 of the bill, on page 128 of the bill before you, which proposes to amend subsection 24.(1) of the act, dealing with the appointment power of returning officers.
The Canada Elections Act governs campaign donations and the financing of political parties and candidates. The act ensures transparency and regulates the financial operations of political parties. As all honourable senators are aware, Bill C-2 limits contributions by individuals to registered political parties to $1,000 per calendar year. It lowers, from $5,000 to $1,000, the annual limit on contributions that an individual can make to particular entities of the same political party. I am talking about candidates, nomination contestants and electoral district associations as defined in the statute. The actual reduction in contribution limits is not going from $5,000 to $1,000 for individuals but from $5,000 to $2,000.
Bill C-2 also lowers, from $5,000 to $1,000, a separate pocket which is for contributions that an individual can make to leadership contestants of a particular political party during a year that that particular party is conducting a leadership contest.
This bill also establishes provisions to terminate all contributions from corporations, unions or unincorporated associations. In essence, honourable senators, individual Canadian citizens or landed immigrants will now be the only legal persons, as lawyers say, that can make political contributions. That is as it should be. For instance, in the United States, in France, and in the provinces of Quebec and Manitoba, they have already banned corporate donations to political parties. Bill C-2 will extend this practice to our country for federal political activity.
The intention of these provisions is to ensure that money — that is, campaign contributions — does not have the ear of government. It should be Canadians who have the ear of government. These changes will level the playing field amongst individual contributions and encourage political parties to engage individual Canadians in the electorate more directly.
It is important to note that the vast and overwhelming majority of all political contributions in this country come from individual Canadians currently in amounts well under $1,000. Introducing a $1,000 limit on contributions limits the capacity and even the appearance of such capacity for interests or Canadians of substantial financial means to be seen to or assert or extract financial influence in our country's electoral process.
No one could seriously argue that a contribution of $1,000 to a political party or a candidate could even appear to give such a contributor any unnecessary undue influence in the electoral process. These limits rebuild public confidence and assure that influence is seen not to be brought through large political donations. That is how government earns the trust of Canadians.
The second major electoral reform that Bill C-2 would enact is a long-overdue change in the appointment of returning officers. Honourable senators, I would like to repeat what I said when I appeared before the House of Commons committee on this bill. The continuation of the practice in this country of having the senior state official responsible for the conduct of a federal election or by-election within an electoral district being a cabinet appointee is simply unacceptable, in our view, in a modern democratic electoral process. For some time, the Chief Electoral Officer has been calling for the appointment power for returning officers to be shifted from the political executive — that is, the cabinet — to his office in his capacity as an independent officer of Parliament.
I would make particular reference to the recommendations of the current Chief Electoral Officer that he gave arising from the 38th general election, entitled Completing the Cycle of Electoral Reforms, which was reported to the Speaker of the House of Commons pursuant to section 525 of the act, September 29, 2005. If honourable senators will look at pages 14 to 17 of that report they will see that Mr. Kingsley recommended that the power to appoint returning officers under the act be transferred from the Governor-in-Council to his office.
I would further make reference to the 13th report of the Standing Committee on Procedure and House Affairs of the House of Commons dated June of this year, entitled Improving the Integrity of the Electoral Process: Recommendations for Legislative Change. This report was made by that committee pursuant to House Standing Order 108(3)(a)(vi) and was that committee's direct response to the September 2000 report I just referenced of the Chief Electoral Officer.
Honourable senators, in that report at page 4 it is clearly indicated that a majority of the members of that House committee basically agreed with this recommendation, i.e., that the appointment of returning officers should be in the hands of the impartial Chief Electoral Officer, not in the hands of the political executive.
The Conservative Party is particularly pleased that the government has chosen to propose, finally, this overdue reform and incorporate it into Bill C-2.
To conclude, I am well aware of the tradition of collegiality that exists among senators and Senate committees. I look forward to hearing the insight and input of all honourable senators regarding my remarks and the provisions of the bill.
Senator Stratton: I like your comment about collegiality. For the most part it is collegial; the odd time we get into a little tussle.
My question has to do with the reasoning behind the reduction of the limit from $5,000 to $1,000. The $1,000 limit does not seem like a lot of money in today's terms; the $5,000 is a much more significant sum. Having been involved in fundraising before, I know it is much easier to get a few $5,000 contributions than many more $1,000 or less contributions. How will the reduction in the limit from $5,000 to $1,000 affect your party? The principle behind this is to expand the base of fundraising to the citizens of Canada rather than the large donors. How will you pick up the slack that you lose with the reduction of the $5,000 contribution?
Mr. Donison: There is no question that lowering these limits will make the work of political parties and fundraising more difficult. The bill is reflective of what I will call the new reality of fundraising. This is the case in the United Kingdom, the United States and across modern western democracies. The reality of modern fundraising is its small donations from individual Canadian citizens. Our party for some time has been working hard, as are some of the other parties as well, and our emphasis has been on enhancing and increasing that individual donor base, but it continues to be a challenge.
In my role as executive director, there is nothing I like better than to see those $5,000 cheques coming across party desks. The rationale for the limit is that, for most working-class and middle-class Canadians, anything over $1,000 is a great deal of money. It is important to keep in mind that when individual Canadians make contributions to political parties or candidates, they are making them out of those hard-earned after-tax dollars.
Senators are familiar with what is called the political tax credit, with which the bill does not deal. It currently allows up to $1,275 per year for credit. Once you get beyond $1,000 for the average Canadian, there is not even a tax benefit. Perception is important in politics, and I feel concerned about, as someone who calls himself a practitioner in politics, the fact that there is much cynicism out there about the political process. The bill goes a long way to speak to average working-class and middle-class Canadians, because for most Canadians $5,000 in after-tax dollars is an insurmountable figure. Reducing it to two pockets — it is actually $2,000, two small manageable $1,000 pockets — helps us in the perception department. In the reality of modern political financing, that is where the 90 per cent or more of the contributions are coming from anyway. We will continue our efforts in that direction.
Senator Stratton: The other question I have is with regard to the ongoing battle, of which you are well aware, between the constituency associations and the national party. Constantly you hear complaints from constituency associations that the national party — it does not matter which party — takes the lion's share and the constituency associations are out in left field, as it were. Do you think this bill will improve that situation or will we still have the same problem? The smaller contributions would allow for the local party associations to raise money more conveniently. Or are we still in the same fight?
Mr. Donison: Senator, it will definitely help. This is an issue across all parties. There is certainly a perception at the local electoral district and candidate levels in all parties that the national parties are treading in their waters, if you like. They are getting donations and denying the flow to the local people.
As you know, currently there is one pocket. It is currently $5,000, or $5,200 after adjusting for inflation, amongst the party and all its emanations. There is built-in competition in the current legislation. What we particularly like about this bill is that it creates two pockets. There is a new, $1,000 national pocket and a $1,000 local pocket. Once the $1,000 limit has been reached for our party, our plans will be to notify a donor who tries to send us more money and send it back, but encourage the donor to give it to his or her local district association.
This will improve that situation and give more opportunity to the local people to raise those small donations.
Senator Stratton: If they are not happy, can they always give you a call?
Mr. Donison: They know where to reach me.
Senator Zimmer: We have had three eminent witnesses who have come before us in the last several days: Professor Franks, Professor Aucoin and Professor Pal. All three had individual statements that I found interesting. I would like to lay out at this time what they had said.
One of them said the federal accountability act appears to imply a deep mistrust. There are legitimate concerns that the plan goes too far in the control, punishment and mistrust direction.
Another said the accountability act now before Parliament, such as the changes to Canada Elections Act respecting campaign contributions, have little or nothing to do with government accountability.
The third one indicated that there is a distinct advantage for the government in power to raise funds and, in his opinion, this bill is politically motivated.
Do you have any comments?
Mr. Donison: Those eminent academics have their opinions. First, on the issue of political motivation, I respectfully do not agree with them. The purpose of the bill, as I said earlier, is to reflect the new reality of financing for political parties across the Western democracies and to ensure that the limits are such that no one can reasonably say there is excess reliance on large donations. With all due respect, I do not agree with their opinion about political motivation.
Senator Zimmer: I thought that is what you would say. I would like to discuss some of the functions that your party has been doing recently. I would like to talk about the Conservative convention where they did not produce receipts. We are now looking at delegate fees that party members are charged to attend conventions. My understanding is that in your last convention, that was not included. What was the fee of your last convention that you had?
Mr. Donison: I believe the fee was around $500. I would have to double-check that.
Senator Zimmer: How many people attended? Do you have any idea?
Mr. Donison: I do not have those figures in front of me, but I can certainly get those numbers for you.
Senator Zimmer: Do you have a rough idea?
Mr. Donison: No. I would not even hazard a guess. In terms of actual paying delegates, I do not know.
The Chairman: Mr. Donison, would you mind getting the figures and sending them to the clerk so that we can distribute them to all members of the committee?
Mr. Donison: I will dig up those numbers, senator and chairman, and give them to the clerk.
The Chairman: Thank you for that.
Senator Zimmer: My understanding is it was over $1 million, but please provide that information for us.
We know from the testimony Mr. Baird gave before the House committee that you did not present the members of your party who attended the convention with receipts for this convention, which is not standard practice for other major political parties, who do offer receipts. The Chief Electoral Officer of this country has asked to look at your party's books concerning this convention. Have you complied with that request?
Mr. Donison: Yes, we have. I would reference to you a press statement that I issued at the time. It is very short. With your indulgence, I would like to read it into the record. This was issued on June 29 of this year.
The party's convention arrangements in 2005 fully respected the law. The fees we charged our delegates to attend did not exceed the cost of running the convention. The fees covered such things as meals, hall rental, security and the like, and there was no net revenue earned by the party. Consistent with interpretation of the Elections Act and the Income Tax Act issued by Elections Canada and the Canada Revenue Agency and applied many times in the past concerning the price of admission to political events, receipts for political contributions were therefore not issued for any part of the delegate fee. The President of the Treasury Board, the Honourable John Baird, was quoted correctly when he was in committee as saying that the party did not issue receipts for the 2005 convention. He made no statement that the party thereby did anything contrary to political financing legislation.
I would like to add that this matter is in fact with Elections Canada and we are working through it. I think this is one of those situations where it is very much a matter of interpretation. As far as we are concerned, we have complied with the law and we will comply with the law in the future, whatever is determined in this regard.
Senator Zimmer: I believe the public has the right to know exactly what the contributions were, if there were any sizable contributions made to your party, and I am sure you will comply with that when you publish that information.
Mr. Donison: We are dealing with Elections Canada on that matter and we will comply with whatever requirements they have.
Senator Zimmer: Do you believe the committee should recommend exempting convention fees from the donation limits? In certain situations, where the limit is $1,000, if convention fees are in the range of $750 to $1,000, there is nothing left throughout that year to contribute to anything else. What is your opinion regarding exempting convention fees from political donations?
Mr. Donison: Our opinion is that is not necessary. Our view is that if a political party is to hold a national convention, the convention is used partly as a fundraiser. I do not think there is any disagreement. When a political party holds an event, whether it is a fundraiser or a convention, if it makes a profit, if it becomes a net revenue generator for the party, we have no disagreement that in those situations, contributions would have to be receipted. All I can suggest to you is that I do not think the difficulty arises for your party out of the legislation itself; it arises out of the fact that you are charging a $995 delegate fee.
Senator Zimmer: Senator Mercer and I work closely on fundraising for conventions. We budget to try to break even. There are times when we make a little money and there are times when we lose money, but our original intent is to break even. It is not considered a fundraiser. At conventions, many times the expectation is for good attendance, but there are times this does not happen, based on a number of factors. We try to budget in a way that we break even and it is not considered a fundraiser.
Mr. Donison: If the national convention turns out not to be a net fundraiser for you, our view, subject to Elections Canada, is that there are no contributions and there is no receipting to do. That is obviously a matter of interpretation that we will have to work through.
Senator Zimmer: You mentioned Quebec, as far as not having corporate limits. In fact, Quebec does not allow contribution from companies. However, there is a report being considered now from the Chief Electoral Officer, a report submitted by retired Superior Court Judge Jean Moisan. In it he recommends that corporate donations be allowed up to $15,000 and individual donations up to $5,000. Quebec is now reconsidering their whole scenario and considering a change to the limits in the amounts of $15,000 and $5,000. What is your opinion?
Mr. Donison: I respectfully disagree with that. The reason I disagree is because corporations, unions and unincorporated associations do not vote. They have not had votes for a long time. It seems to me that what we should be encouraging is citizen participation in politics. Canadian citizens, whose ultimate act is voting — the other one is donating money and supporting the political party of their choice — are the individuals who should be involved financially in politics, and not other legal persons, whether it be corporations or unions. I would respectfully disagree with the former Chief Electoral Officer's opinion.
Senator Zimmer: There was a rather odd situation the other day, if I can respond to you on that. While we were in hearings, a very strong fundraiser of your party in Manitoba was sick with the flu. He turned the television on to CPAC, where we were discussing the issue of corporate donations and companies. He immediately sent me an email in which he said that he strongly believes that we have to encourage the $1,000 donations.
On your point that they do not vote, Minister Baird said that, and it was a good answer. I have thought about it. Over the last month, I have received many emails, letters and phone calls from a variety of political parties, saying: In fact, we do vote. My company will have an opportunity to participate in the democratic process of this country, and by not allowing me or my company to be able to contribute to a party that I believe in, on their fiscal responsibility, takes away a demographic right.
They are saying to me in many ways that yes, they do vote, they vote through their company's beliefs. I am sure we will disagree on that, too, but I wanted to put that on the table. There is another opinion out there and it is an interesting comment, their contention that there is an opportunity for a company to vote through the democratic responsibility and the right to make a political donation.
Mr. Donison: Was this a federal Conservative or provincial Conservative fundraiser? I am not asking for the name. I am just not familiar with that.
Senator Zimmer: Federal.
Mr. Donison: Most working-class and middle-class Canadians are employed. That is their source of income. They are not incorporated, they do not have a company and they do not carry on business through a corporation. Those individual business persons will be allowed to use their $1,000 limit. I am of the view that why should they be able to do it twice? Why should they have extra participation in financing a party simply because they are incorporated? Our view is to keep it to individual Canadians and landed immigrants who we want to encourage to eventually become citizens, and that is where it should stay.
Senator Zimmer: If I could counter that. I would just like to add that a lot of them do not make donations individually, and then they want the opportunity to do that through their company.
Given the $1,000 limit being proposed and the $1,000 most of your party would charge to attend a fundraiser, I understand there are cocktail receptions being conducted in October by your party for which they are requesting is $2,000: $1,000 to the party and $1,000 to the constituency.
Do you know anything about that or these fundraisers that are coming up in the near future by Mr. Harper?
Mr. Donison: I am not aware of that particular aspect. Again, there may be situations where the national party will hold joint fundraisers, as all parties will be able to do, with particular electoral district associations so that contributors can give $1,000 to the party, as the act specifies, and a separate $1,000 to the EDA, but I am not aware of those particular arrangements. I would think if they were properly documented they will not violate the spirit or the text of the statute.
Senator Zimmer: Thank you, Mr. Donison. I have enjoyed the banter.
Senator Segal: The most difficult job in the country is being the national director of any political party. Expectations are massive, resources are limited and when you cannot blame anybody else, you always blame party headquarters — in all political parties. It is a matter of course.
I would like to ask a question of the national director of the Conservative Party, as someone who is obviously a Conservative, about the increasing role of the state in election financing that these rules will, by definition, generate. To be fair, it was Prime Minister Chrétien who began that process in a previous administration. If you reduce the amount of contribution that can be made by individuals, if you take out corporations and trade unions, and if you accept for a moment that the cost of elections — the democratic process, campaigning locally and nationally — has no prospect of reduction but rather is going up with media costs and all the attendant pressures, I would be interested in your sense of how that gap will be addressed.
It may be addressed by more effective fundraising by the existing political parties as they develop their skill sets, and that would be a good thing. However, I worry that if you assume there are always people thinking about how they can get around the system, this may have the inadvertent impact of generating more of that kind of activity, not in any particular political party but in all the political parties. I want you to deal with that.
I also would like you to give me your view on the difference between political patronage and bureaucratic patronage. The government's initiative with respect to de-partisanizing the appointment of returning officers is a superb reinforcement of the democratic principle. It has been my experience, however, that to the extent that one says to the political side of the measure, this is no longer your decision to make. If that is downloaded to the democratic part of process — and I say that with the highest regard for the Chief Electoral Officer, who is an absolute professional in every respect — one kind of patronage is being replaced with another. I would be interested in your perspective, as the national director of the Conservative Party, with respect to the fairness of that process.
I assume that once legislation is passed, regulations will have to be put into effect relative to the actual practical application of such. Is there any advice you might be able to give the committee, either now or in the future, with respect to how that process might roll out in a way that protects the notion that election workers in the riding should be reflective of no partisan interest or, at least, be reflective of a multi-partisan view that represents all the parties in the mix?
The final question relates to the legislation before us and the coming into effect date — whatever that ends that up being — when and if it passes this chamber and when and if it is given Royal Assent and a proclamation date is set.
Is it a matter of substance to you, as the national director of the Conservative Party, whether the coming into effect date of any of the provisions is immediately upon Royal Assent or a different date? A specific date, perhaps January 15, 2007, would give parties a chance to adjust to whatever implications may emerge, not only parties but also the larger public service in a sense, because of the broad range of this legislation. I would be appreciative of any advice you could give the committee on those points.
Mr. Donison: I will try to answer the questions in the order you put them to me.
The first was your concern about the fact we were limiting individual contributions and eliminating corporate entirely, cutting off some sources of revenue. I think you said it best. The political parties are just going to have to work harder, sir. That is the price to be paid. I am happy with that for the reasons I already gave in the rationale to the committee as to why it should be $1,000. It is the price that we need to pay, and it will make my job harder and that of all of us in the process harder, but it is a challenge and it is worth it. The parties will have to make up the gap by the hard work. That is all I can say.
You mentioned that the effect may be, because it is more restrictive, to increase the chances of people getting around the rules. That is always possible. It is my observation with such rules, whether it is the area of accountability, or ethics or elections, that Parliament, with all due respect, can pass statutes. However, the Elections Act has been based on the assumption of the common decency and honesty of 99 per cent of Canadians. To a certain extent, we have to proceed on that basis. It may increase that possibility, senator, but I am not concerned about it. The parties will to have to distance themselves in this area.
You asked me about bureaucratic versus pure political patronage. It is not my expertise to talk about that in a general, government-wide context but in the context specifically of the Chief Electoral Officer and the issue of the appointment of returning officers. I, too, have always been concerned that in the end there are only two types of patronage. However, in this particular case, if we resolve bureaucratic patronage — if that is what it is — due respect to the Chief Electoral Officer, I am in support of that. He is not just a mere bureaucrat; he is also an officer of this Parliament. I am satisfied that, through his offices, impartiality at the local level will be maintained. There have been concerns or a perception, if not actual cases, where local returning officers were perceived to be quite partisan — being appointees of the government of the day, so to speak. This bill eliminates that. If there is more bureaucratic patronage, that is a small price to pay in terms of that value.
Regarding the issue of coming into effect, the Conservative Party has no difficulty in terms of the effect date. I am sure with all the national parties we have a computerized system. At the moment, it is programmed at the $5,000 level. We will just shift our systems over to $1,000. We do not have any difficulty as to when this bill comes into effect on the operational side.
In that regard, there have been comments that when it comes to electoral legislation, usually you want to have a firm cut-off date at the beginning. I want to remind Honourable Senators that there were some major amendments to the Canada Elections Act in 1997, I believe, and again in 2000 by previous governments, and in all those cases the cut-off was in the middle of the year; one was even on the redistribution. There was supposed to be a one-year waiting period, and I believe all those bills became law and in effect in the middle of the calendar year. We got used to that, so there is nothing magical about that. Therefore, we have no operational problem with dates, Senator.
Senator Segal: On the issue of talent, one of your jobs — as is the case of your colleagues in the other parties — is to generate talent: bright, young people across the country who want to be involved in the political process as volunteers, who care about their country, have different political views, and bring different ethnic and professional backgrounds to the process. It is the kind of politics we believe in in this country.
Is there any provision in this bill that causes you concern about attracting bright young people into the process either as volunteers, as potential candidates or as folks who will participate in the process for the long haul? Are you comfortable that the full measure of this legislation will be quite positive in every respect?
Mr. Donison: I am quite comfortable that it will be. I do not think that the legislation speaks to volunteers.
If I could add a point, though, other than fundraising, that is another big challenge that all of us face in politics.
I have not been involved in politics for as long as you, but over the years I have seen a substantial drop of volunteer involvement in all parties. There is a real problem getting individual Canadians to be motivated, particularly at the local level. It is a problem our party and all parties have. I do not think the bill speaks to that issue, but it does not stand in the way of our ability to enhance that kind of involvement.
Senator Milne: Mr. Donison, you said in your statement that the United States, France and the provinces of Quebec and Manitoba already ban corporate donations to political parties, and Bill C-2 will extend that to the country at the federal level.
What is the limit of donations that can be made in these different constituencies to political parties by individuals?
Mr. Donison: I must confess that I do not have that information with me. Are you talking about France?
Senator Milne: Yes.
Mr. Donison: I am not deeply familiar with their individual contribution limits. That is a good question, but I do not have an answer for that.
Senator Milne: Do you know about the provincial statutes for Québec and Manitoba?
Mr. Donison: No, I do not know offhand. It is in the record, in their statute. I am not sure what their limits are.
Senator Milne: In the U.S., do you know if they ban corporate donations to PACs — political action committees — the system they have that is used to get around any kind of ban?
Mr. Donison: I will not pretend to be an expert on the very complicated vagaries of United States election law.
From what I understand, PACs were eliminated. I believe there were legislative changes that eliminated that process. I am not particularly familiar with the arcana of American politics. Although I have an interest, I do not know a lot about political financing in their system.
Senator Milne: You say that we should be encouraging Canadian citizens to participate in the political process. This $1,000 limit that is mandated in this bill is actually a $2,000 limit, so let us not play around with words. It is a $2,000 limit.
In my opinion, that figure seems to limit Canadians from actually participating in the political process. They cannot support the political party of their choice up to an amount that they would like, let alone equal to an amount they can donate to any charitable organization. They can give more money to the Canadian Cancer Society than to a political party. What is your feeling about that?
Mr. Donison: Well, first of all, as I said earlier, all the evidence I have seen indicates that 90 per cent north of all contributions for many years to all political parties, locally and nationally, have been in small donations anyway. That has been the reality.
The other thing, of course, is there is a $1,275 political tax credit limit. With charities, it goes beyond that limit.
The statistical evidence indicates that the vast majority of Canadians do not intend to donate the amount of $1,000 anyway, so I do not see that limit as a bar to the overwhelming majority of Canadian citizens.
Senator Milne: Do you think that the $2,000 limit should be indexed? Five or ten years from now, that limit will effectively be a great deal less.
Mr. Donison: That is an excellent technical question. I am not sure of the answer.
With respect to the current limits that were brought in by Bill C-24, there was an inflationary indexing clause added. Senator Mercer may have more knowledge about this than I do, but I believe that clause still exists in the bill.
I believe there will be indexing built into the limit so the $1,000 figure will start going up each calendar year. That is my understanding of the bill, but I stand to be corrected.
Senator Milne: Maybe Senator Mercer can answer that question for us.
The current government provides funding for political parties. If this ever-increasing gap that you spoke about between the cost of running elections and the amount of money parties can raise continues to increase, do you foresee future governments trying to step in to fill that gap?
It appears that increasing government donations for elections is actually interfering greatly with the democratic process because this bill discourages Canadians from donating to a party of their choice.
Also, because they are no longer free to give what they can to the party of their choice, and the government is already giving money to the parties, the government may start to put limitations on political parties and narrow down the freedom of choice of a party to say what it wants. That may begin to interfere with its source of money from the government. Am I making myself clear at all?
Mr. Donison: That is a difficult question to answer. I do understand the question. I will try to keep my answer short.
There has already been state involvement. For over 25 years, rebates have been provided to parties in Canada of 50 per cent. That is taxpayers' money. The political tax credit itself is a form of taxpayers' money to small donors.
I cannot speculate on what a future government will do. Are you suggesting that future governments will be under pressure to increase the statutory allowances to public subsidy?
Senator Milne: Yes, mainly because of the effects of this bill.
Mr. Donison: I will repeat what I said before: It will be up to the political parties to do the job of getting small donations, doing the work and resisting that temptation. I do not think the bill increases that possibility, but I cannot speculate what a future government might do.
Senator Comeau: Are you sensing any changes or trends in the way fundraising is being planned for the future, any changes from the past because of the limits that are now being imposed?
Mr. Donison: I think the act simply recognizes the current reality, which has been a trend line for several years. Again, the reality of modern political party financing is the small donor.
I saw a statistic somewhere that said for the 2008 election, it is anticipated that over 65 per cent of the donations for President of the United States will be amounts of less than $200. That is the reality of modern party financing.
The bill simply recognizes that. I think that has been the trend for several years, and the act will just encourage us to continue to work in that direction.
Senator Comeau: You used the word ``reality,'' and it is on this reality parties are currently planning their strategy.
On the question of gifts, my understanding is it is now $500 for a gift. If it is above $500, the returning officer must evaluate the nature of the gift, and that is not in private to the legislation.
Mr. Donison: I believe that appears in section 92.
Senator Comeau: Have you had a chance to evaluate the impact of this provision as to what in fact constitutes a gift? Could it include gasoline in a vehicle or a trip to let us say a fishing lodge? What would be considered a gift?
Mr. Donison: The reason I have not been too concerned about this provision is because there is a specific section that says a contribution as defined in the act is not covered by that.
I think this is a provision dealing with some issue of trust funds and money being paid out of that. I believe it is meant to enact that.
I have not looked at it in detail because I do not think it practically affects the operations of political parties. Anything that meets the definition of contribution under the act is not caught by that section.
I believe there is an intent provision, the idea that someone is giving money for the sole purpose of influencing a public official. I have not looked at it very carefully because I do not see that it has much of an implication internally.
Senator Comeau: Have you looked at the issue from the point of view of a candidate being offered a gift from a corporation, given that corporations are no longer capable of providing donations? You have not seen this as a kind of problem, have you?
Mr. Donison: No, I do not see it as a problem.
Senator Comeau: This question is a follow-up to Senator Segal's question concerning poll workers. Historically, and I think it is still the case, the returning officer was recommended by the governing party. The number two person, the clerk, was recommended by the other party, which created a check and balance in the returning office. In the constituency returning office at least two people from different parties could perform that check and balance function. With this no longer being the case under the provisions of the new act, wherein the chief returning officer is given the duty to hire, are you aware of any means by which this historical check and balance might be respected? Do you know whether returning officers will try to be mindful of this?
Mr. Donison: If this bill is passed that will be more bureaucratization, to use Senator Segal's word, and we have no difficulty with that. I suspect what will happen in practice, senator, is that returning officers will still be looking to the candidates from the various parties for suggested names. I think it will be a practice. Although, you are right; it will no longer be enshrined in statute.
Senator Comeau: With the office of the returning officer being in Ottawa, it is difficult for him to get out to over 300 ridings to ensure there is the historically adequate balance to keep the whole procedure fair.
Mr. Donison: My understanding, senator, is that the returning officer is in the riding. The Chief Electoral Officer will appoint returning officers. The returning officers will appoint poll clerks. Thus, the returning officer will be a local person in the community as has always been the case.
Senator Comeau: Does the legislation state that it is the returning officer who will appoint the poll clerks?
Mr. Donison: That is my understanding of it, senator, yes. I am open to correction.
Senator Comeau: Whoever winds up being the returning officer could be very powerful.
Senator Day: Mr. Donison, thank you for being here. I appreciate your comments.
I support, as do you, the initiatives with respect to the returning officer. I agree that it is long overdue and I look forward to the new regime when it comes about.
First, I would like to return to Senator Segal's question with respect to coming into force. You gave two examples of changes that were made in 1997 and 2000. There was another change to the legislation in 2003. It provided for a special exemption for any political party that might be involved in a convention before the coming into force of the act, Bill C- 24 amendments on January 1, 2004. On December 27, 2003, the Conservative Party called its convention to take advantage of that. I think what Senator Segal is getting at is if Bill C-2 provided for certain aspects of the bill not coming into force until January 1, 2007, you would not have any difficulty with that, would you?
Mr. Donison: As executive director of a political party, I am in the hands of Parliament. Whatever Parliament decides, I will live with.
You made reference to Bill C-24. It is important that honourable senators be reminded that that bill received Royal Assent on June 19, 2003. At that time, the Conservative Party of Canada did not even exist. The two parties had not merged. There was no prospect of a leadership convention affecting our party or either of our previous legacy parties.
With all due respect, everyone knew there was a pending leadership contest in your party, senator.
I want to make it clear that that legislation was passed by a majority Liberal Parliament. It decided to use a cut-off date of January 1. As a result, neither the Liberal Party nor the Conservative Party leadership conventions were governed by the new legislation. It was an even playing field for both parties in that respect. I want senators to know that.
Senator Day: I want to make it clear that I am not trying to put you on the defensive; I am trying to work with you on this. We are trying to work with legislation that takes into consideration current political realities. That is the reason for my question.
The limitations on the amount of contribution beg the question, why are we not seeing more limitations on total political party spending? Would you support some initiative in that regard?
Mr. Donison: The current law provides caps for the election period itself.
Senator Day: I said, ``total.''
Mr. Donison: Are you talking about pre-writ?
Senator Day: I mean total political party spending. If the political party can raise funds, and there are limits on how much can be raised from corporations and individuals, should there be limits on the total amount that can be spent by the political party?
Mr. Donison: That could be argued, senator. I do not have a lot of concern about that.
Traditionally, for over 30 years now, we have regulated expenses during the writ period. One of the difficulties may be that political parties engage in all sorts of pre-writ, pre-election activities. I assume you are suggesting that there be some maximum limit on what we spend on everything. Is that what you are saying?
Senator Day: Yes.
Mr. Donison: Certainly from my point of view I would not be supportive of that. Again, if Parliament chose to enact such a measure, we would have to live with it.
Senator Day: As my final question, let me understand fully your interpretation with respect to conventions. Your interpretation is that convention expenses do not need to be declared as a political expense if no profit is made. Did I understand that correctly?
Mr. Donison: I would again reference the statement I read into the record, senator. This matter is now before the commissioner and we are waiting for the results.
Senator Day: I would like to refer to Senator Zimmer's question because I am not sure that I understood your answer to him. If it turns out that your interpretation is not correct and fees for political conventions — whether policy or leadership — have to be included as part of the annual contribution, would you be supportive of an increase to the $1,000 limit?
Mr. Donison: I guess we would have to consider that at the time. I do not think so. The point I made earlier is that the bulk of donations people make to political parties are not just under $1,000 but are under $200.
If a political party can run a national convention on a break-even basis, or even on a profitable basis, if the $1,000 limit becomes the ruling, it will not severely interfere with that. I would not be supportive of that.
Senator Mercer: With regard to the comment about receipting of conventions, if you do not receipt conventions I believe it is a way to get around all the rules by having money flow into a political party that is not regulated. A convention has to be paid for by one means or another. If you charge $5 admission to the convention and it costs $1 million to put it on and someone donates the full amount, then that, in my opinion, is a major contravention of the intention of all legislation, whether it be Bill C-24 or Bill C-2.
I wish to talk about transparency. There is a lot of talk around Parliament about transparency, in particular when it comes to this bill. I am concerned that this bill does not address the issue of transparency with respect to current members of Parliament who have been — now or in the past — candidates for the leadership of their political parties or previous political parties as they existed. Mr. MacKay and Mr. Harper have both run for the leadership of various political parties over the past number of years. Mr. Harper has not disclosed his list of contributors to the 2002 Canadian Alliance convention.
Where is the transparency when we do not know who has contributed? Are any of the companies that are getting lucrative contracts with the government today on the list today of donors to Mr. Harper? Similarly, Mr. MacKay had a very large debt after his run at the leadership of the Conservative Party, and the debt has now been retired. He has not disclosed the donors who helped retire that debt. He is now in a position of influence where contracts are being awarded. He has influence over Mr. Baird, as has the Prime Minister, and they are handing out millions of dollars of government contracts. I want to know, why are we not addressing this issue of transparency so we can find out who gave the money to Mr. Harper and Mr. MacKay?
Mr. Donison: The current law did regulate leadership conventions. They were never regulated before. Are you suggesting that Parliament retroactively legislate disclosure requirements?
Senator Mercer: I would be happy with that in this case.
Senator Cools: How far back did you want to go?
Senator Mercer: I am concerned about the discussion about the bureaucratization of the appointments of returning officers. I have been personally opposed to this for a long time, and I continue to oppose it because, quite frankly —
The Chairman: Opposed to letting it go to the Chief Electoral Officer?
Senator Mercer: Yes. The system now works, and there are occasions where you have problems. Senator Comeau commented about having checks and balances, and having people appointed who represent at least two of the political parties involved in a race is a good way to have checks and balances. It goes back to the days when we used to have an enumeration in this country, and you had two enumerators, one from each of the two parties that had the largest number of votes in the previous election. It worked very well. We never had major problems with this.
I contend, and you have heard me say this before, that the Chief Electoral Officer does not hire enough political people. He does not have people who do politics practically. That does not mean I want him to hire all Liberals. I do not want him to hire Liberals, because I want them to work in the field, but I think he should hire Conservatives and Bloc Québécois members and New Democrats, and when they come in the door, they hang up their political partisanship but not their political experience that allows him to understand how politics works practically.
Mr. Donison: I repeat, I am not concerned. The conduct of a federal general election is so central to our democracy that it is important that it appear to be administered by totally impartial officials. I have no difficulty with the increased bureaucratization at this level. I do have those concerns elsewhere in government, although; but I have no particular concern about this situation.
Senator Cools: I should like to begin by thanking Mr. Donison for coming before us, and I especially thank him for his clear-mindedness and lucidity and excellent explanation of the issues. I had some questions, but I will pass on them so to assist the committee to move ahead in time. Perhaps I can discover some of this at another time.
I am very amazed at the enormity of organizing the issuance of receipts, the actual machinery the party uses to process cheques, donations of $10 here and $20 there and everywhere. I have always been interested in getting insights into the actual machinery and organizational models that one uses, because it must be a daunting task. I shall find that out another time.
In addition to that, I wish to also thank you, Mr. Donison. A political party is probably one of the world's largest volunteer organizations. You are dealing with armies of volunteers. As a person who has run and been engaged in electoral politics, I know the difficulties of just processing the names of these people. I want to thank you for that.
Most important of all, I thank you for your own contribution to what I would describe as a genesis. You have been piecing together a party out of many disparate parts over the last many years. I commend you for that, because that is no simple matter. It is a gargantuan challenge, and you have been meeting that challenge tremendously well. I do not think people understand the enormity of it. Three years ago, this party did not exist, so, as they used to say, you have come a long way, baby.
On a passing note of levity, since it is fair to say that the days of the old bagmen in politics are past and that that era is behind us, in respect of patronage and bureaucratic patronage and political patronage, a very old senator who had been a famous bagman said to me one day, ``Annie, there are only two kinds of patronage. There is good patronage and bad patronage; there is our patronage and their patronage.''
Mr. Donison: Thank you for your remarks. I want to say that it is certainly not me alone. There is the large and growing staff of professional, paid people in Ottawa and out in the regions, and also that army of volunteers that we depend upon to get the job done.
Senator Cools: I should like to pay tribute to them also. Government is a highly professional business, but the business of actually mobilizing people on the ground is a fairly amateurish business, but that is the nature of human beings. It is the nature of this process and system that, at the end of the day, the entire machinery of government sits and stands on that massive army of volunteers around the country.
The Chairman: I thank the witness for coming. He has been fair and candid. He handled our questions well, and we appreciate his contributions to our deliberations.
Mr. Donison: It has been a privilege.
The Chairman: Honourable senators, our next witness is Mr. Steven MacKinnon. Mr. MacKinnon, please proceed.
[Translation]
Mr. Steven MacKinnon, National Director, Liberal Party of Canada: Thank you, Mr. Chairman, for the opportunity to comment on Bill C-2, which will have a major impact on the way our electoral process works. It is entirely appropriate that you take the time to thoroughly review the bill's provisions.
Despite the very short time frame, we, like our counterparts from the other parties, had an opportunity to share our views about the legislation with the House of Commons committee. The Liberal Party is an important stakeholder in this debate and I am grateful for the chance to appear before this committee.
[English]
I am proud to be the National Director of the Liberal Party of Canada, and I am proud to be here before you today. We will have a formal submission that will be filed with the committee and we hope you will give it due consideration. Today, I will sum up our key recommendations and proposed amendments to this legislation.
The proposed federal accountability act, we believe, is in general — and the Liberal Party believes in general — a very flawed act. A senior public servant recently told me that the hardest problems to fix are the problems that do not exist. With the Bill C-24 legislation of Prime Minister Chrétien, Liberal legislation — the most sweeping electoral reform legislation anywhere in the western world — we have today a modern political system, a state-supported political system and a system that we think has achieved some measure of equilibrium. That is not to state that we endorse every provision of Bill C-24, but we certainly endorse its philosophy and its provisions. As Liberals, we are proud to have been the progenitors of that particular piece of legislation. It is one of the critical parts of Mr. Chrétien's legacy that Bill C-24 is now the law of the land. We are happy to live by that and we do live by that.
We believe the proposed federal accountability act, as it impacts on political parties and the political process, will not achieve stated aims. Moreover, and perhaps more troubling, we believe it is a politically motivated piece of legislation that uses Parliament as a blunt instrument to insert the law into the middle of a planned democratic process of a political party. I refer specifically — and that brings me to my first recommendation on the bill — to the coming into force of this bill. We support Mr. Kingsley's intervention before the House committee; we support the Bloc Québécois in their recommendation that the coming into force of this bill not occur until January 1 of the year following Royal Assent.
In terms of our leadership campaign, here we have 10 or 11 men and women who have made what I think all of you would recognize to be very important life decisions to run for the leadership of a political party. They have planned their lives around that and have budgeted campaigns around that only to be told that the rules may change in the middle of the game. While their difficulty in raising money has been widely noted, I do note some good improvement in that area. I think it would be patently unfair — arguably antidemocratic — for Parliament, for no compelling reason, to insert the law into the middle of a Liberal leadership race.
I did hear Mr. Donison's presentation and I want to underline one thing that would contradict the philosophy that underlies having this bill come into the force in the middle of year, against the wishes of both the Chief Electoral Officer and most political parties, and that is the planning of the Conservative leadership convention. The Conservatives, to be clear about what they did, met on Christmas Eve 2003 to formally call their leadership convention so that they could duck and subtract themselves from both the transparency and the political financing provisions of Bill C-24. That is a matter of fact and that is a matter of public record that anyone can check. For them to turn around today and say, ``While we snuck through a loophole in the law, we intend to close that loophole today for the Liberal party,'' arguably in the middle of the biggest popular consultation in the history of our party — disingenuous at least; antidemocratic, perhaps. We think that the coming into force provisions of the act are onerous and vexatious.
Second, conventions. I see Senator LeBreton here, a former Progressive Conservative. She has received tax receipts for her participation at Progressive Conservative Party conventions. That is also a matter of public record. That is the way things operated in the past; that is the way things have always operated. That is the way the Liberal Party operates and the way at least the Progressive Conservative Party and we believe the Reform Party operated. That is the way that the New Democratic Party operates. Conventions are a critical component in party democracy. They set policy, they attract volunteers and energy, and they are a compelling mix of democracy and show and speech, and a meeting place in the crossroads of political parties that have formed the underpinnings and the important basis of much of Canadian public policy over the years, regardless of political party. It has always been the case, at least as long as political contributions have been regulated, that delegate fees to those conventions have been tax deductible, and tax deductible on the basis of another well-known principle, which is that the amount of personal benefit, a lunch, a briefcase and whatnot, would be deducted from that receiptable amount, but the amount of money spent by a party on speakers, lights, carpeting, stages and screens was not deducted from that amount.
That is the way charities operate. That is the way charity golf tournaments operate. That is the way charity fundraising dinners operate. That is the way political party conventions have operated.
This bill does not address conventions. However, conventions are very expensive. As Senator Zimmer correctly pointed out, the Liberal Party budgets to break even on conventions. That is generally the financial performance of conventions. We do not use them as fundraisers, contrary to what Mr. Donison has said.
It was a telling moment when Mr. Baird came before you and said, ``I cannot find my tax receipt from the last convention.'' He was demonstrating that that was the first time that he had ever really thought about it. A contribution limit of $1,000 that must include the amount of a delegate fee to a political party convention is fundamentally undemocratic and fundamentally deters people from participating in the activities of their chosen political party.
The Liberal Party of Canada calls upon you to consider an amendment that would exempt convention delegate fees from whatever contribution limit you choose fit to keep or change in this bill.
There are a number of ways that that could occur. I leave it to you to think about it or to consult with Elections Canada or the Chief Electoral Officer on that. Much akin to the way nominations are conducted, we could simply register a convention and register a convention fee and allow anyone who has paid that convention fee to be exempted by that amount in the contributions limits. That is our second recommendation.
The third recommendation has to do with the contribution limit itself. Senator Zimmer again referenced the report of retired Judge Jean Moisan in Quebec.
[Translation]
Let us be clear on the meaning here. Justice Moisan makes a reference to Pierre-F. Côté. Mr. Côté is internationally renowned for his work in the elections field. He has presided over two referendums and over some of the most divisive elections in this country's history. Pierre-F. Côté also implemented the 1978 legislation alluded to by Mr. Harper. This legislation on political party financing was brought in by the government of René Lévesque.
Today, Pierre-F. Côté is calling on the Government of Quebec to amend this legislation to allow corporations, unions and associations, that is corporations or individuals, to participate in the political process by way of contributions.
This is a very significant development. I would expect that the committee will be hearing from Mr. Côté and questioning him about his position. However, I simply want to point out that Pierre-F. Côté, the person responsible for implementing this legislation championed by René Lévesque, is today acknowledging that some of the legislative provisions were flawed.
[English]
Let us look around the world at western democracies and G8 countries, which are countries that are analogous to Canada. We are very fond of Australia these days. We are fond of the fact that they have no contribution limits to political parties. New Zealand similarly has no limits. Sweden has no limits. The U.K. has no limits. In the U.S., the limit is $27,500. I am using approximate Canadian dollars in all cases. In Japan, the amount is $145,150; Spain, $60,500; Italy, $14,600; Ireland, $8,900; and the next lowest — the lowest other than Canada — is France at $6,500. The vast majority of those countries also permit businesses, corporations, associations and unions to contribute to political parties.
Let us talk about Canada. Canada has a limit of $5,000 in Bill C-24, which was subsequently indexed, which in the Canadian context is low, certainly low from unlimited. It has never been studied or analyzed, we have never looked at this, but that was the amount that was established as a sort of trade for the ability of parties to derive funds from corporations, individuals in amounts over that, and so on. We have never analyzed if that is the case. We now have periods of minority governments at short intervals with elections that cost $18 million. None of these things was considered in Bill C-24. Philosophically, the underpinnings of Bill C-24 were that there would always be a majority government and a four-year cycle when parties would be able to benefit from public financing to fundraise and then to pay this $18-million cost and other costs that Mr. Donison referenced, and come out without these onerous debts.
The Chairman: Can I ask you how much longer you intend to make your presentation? Honourable senators would like some time to ask questions.
Mr. MacKinnon: With your indulgence, I have very little left to go, Senator Oliver.
Let us look at Alberta. Is Alberta to be described as unaccountable for having a $15,000 limit, with $30,000 in an election year? Is B.C. to be described as unaccountable for having no limits? Is Ontario to be described as unaccountable for having a $14,000 limit, or Quebec at $3,000? Is New Brunswick unaccountable at $6,000? Richard Hatfield's legislation, arguably the best electoral legislation in the country, passed in 1982, allows corporations or individuals to give $6,000.
This is an amount that has been established by Mr. Harper and his government as an amount they believe will adversely affect the fortunes of the Liberal Party. We understand this. We understand that the Liberal Party will abide by the law and obey it. In fact, we are already progressing, as Mr. Donison noted, very quickly in that direction. We have vastly improved our capacity to fundraise among individuals. However, $1,000 from a $5,000 limit that has never been studied is, we think, unfair. The Liberal Party policy is the same as the policy that Mr. Chrétien implemented, which is that the limit should stay as it is — that is, $5,000, plus subsequent indexation. I would commend you to the comments of Judge Moisan, and Pierre-F. Côté, who have the experience of dealing with outright ban on political contributions by businesses, unions and so on, and ask you, the chamber of sober second thought, to consider the point of view of that much esteemed individual.
Our last recommendation and suggested amendment that we commend to your attention is that of ensuring further accountability. There have been leadership conventions in the past 10 years — I would say 10 is a fair number. This bill accepts retroactivity. In fact, Senator Segal has decried the application of retroactivity in this bill, but it must be, if he is decrying it, something the government finds acceptable to retroactively apply. However, we do not propose, as other parts of the bill do, to retroactively apply sanctions. We want to retroactively apply accountability. We suggest, therefore, that any members of the cabinet or the Prime Minister who have participated in the leadership activities or the leadership choice processes of a registered political party in the last 10 years be required to fully disclose all the donations received by them.
This would include Mr. MacKay, as Senator Mercer pointed out. It would include the Prime Minister himself. It would include Mr. Clement, as well as Mr. Brison, who I think has, commendably, already done so voluntarily, Mr. Prentice and others who have participated in such activities.
We would ask why this headlong quest for accountability would stop at the doorstep of the Prime Minister and ministers, who now are accountable to Canadians, from disclosing the financial influence that may or may not have been exerted on them by these contributors to their leadership campaigns, which are hidden, secret, undisclosed, and under the carpet.
That sums up our four key recommendations on the bill. Our brief will include others. I thank you, Senator Oliver, for your indulgence, and I thank all senators.
The Chairman: When may we expect the paper you refer to?
Mr. MacKinnon: There are certain legal issues that we invoke in that paper that I wish to run by further counsel, and then obviously we will have it translated. We will have it before you as soon as humanly possible, senator.
Senator Stratton: Thank you, Mr. MacKinnon, for attending here today and appearing before us. As I have said throughout these hearings, particularly on one occasion, no one around this table would disagree that this bill is needed. That was the concurrence of virtually all members of this committee. There is a particular reason for it. It is to try to get over, for everyone's sake, the problems we consistently have as a country with what occurs in politics.
I should like to read into the record just why this bill is important. What I shall read comes from the Justice Gomery report, chapter 16, on assigning responsibility. I wish to read it into the record, and then ask you for your comments, because I think this is the reason for this bill.
The Responsibility of the Liberal Party of Canada (Québec). The method of providing for the financial needs of the Québec wing of the Liberal Party of Canada, using kickbacks obtained from Jacques Corriveau, from persons deriving benefits from the Sponsorship Program, such as Jean Brault (and probably others) is described elsewhere in this report. The banality of the scheme makes Mr. Corriveau's participation particularly blameworthy. The persons who accepted contributions in cash and other improper benefits from Mr. Corriveau and Mr. Brault on behalf of the LPCQ have brought dishonour upon themselves and the political party they were supposed to serve. For this reason, Michel Béliveau, Marc-Yvan Côté, Benoît Corbeil and Joseph Morselli deserve to be blamed for their misconduct, whether or not they derived personal profit from the money which passed through their hands. They disregarded the relevant laws governing donations to political parties and contributed to the all-too- common perception that many of those participating in the democratic exercise of political activism are dishonest and disreputable persons.
I take that as a personal affront, what they did.
The LPCQ, as an institution, cannot escape responsibility for the misconduct of its officers and representatives. Two successive Executive Directors were directly involved in illegal campaign financing and many of its workers accepted cash payments for their services when they should have known that such payments were in violation of the Canada Elections Act.
I will stop there, and say this to you: The reason for this bill is abundantly clear from what I have read to you. It is important that this bill be passed expeditiously so that this does not occur ever again. Could I have your comments?
Mr. MacKinnon: I have a number of comments, but let me start here. I would like to read you a quote.
But to dismiss an entire party, or all its members in Quebec, or an entire advertising industry, or all partisans in Quebec, or an entire political generation, or all federalists in Quebec, as being in one way or another part of one or several criminal conspiracies is both over the top and likely more about partisan excess, sovereignist self- righteousness or anti-Quebec bigotry, dependent on the source.
Senator Hugh Segal.
Senator Stratton: I would quite agree with that.
Senator Day: You read quite a bit into the record. I think it is only fair to let the witness answer.
Senator Stratton: I apologize for the interruption. I thought he had finished.
Mr. MacKinnon: Depending on the source, it is self-righteous or bigoted, according to Senator Segal, whose intervention I think was welcome and lucid.
I know the Gomery report well. I am a member of the political party that called the Gomery commission. As far as I know, I am a member of the only political party that remains committed to implementing the recommendations of Justice Gomery. The proposed federal accountability act does nothing to implement Justice Gomery's recommendations. In fact, it is widely acknowledged in the Conservative government that Justice Gomery's recommendations have been categorically rejected in the accountability bill. Justice Gomery certainly did not recommend that we change the fundamental underpinnings of our elections act in the middle of this year. Justice Gomery did not recommend that we lower our contribution limits or ban corporations from being able to freely participate in the political process. Justice Gomery did not believe that the Prime Minister should fail to disclose his donations for political office, should refuse repeatedly to disclose his donations for high political office.
I testified before Justice Gomery and gave him all of the measures that have been put in place by the Liberal Party to ensure that this would not happen again. I told him that we had kicked out the five individuals you named. They are no longer members of our party. I told him about the financial checks and balances that we put in place. I told him about how we now relate to our provincial and territorial associations and ensure that their financial compliance is like ours, consolidated and within the confines of the law at all times. I told Justice Gomery that, whatever he determines the amount is that was wrongfully obtained in the course of whatever happened in the sponsorship affair, we would return it to the taxpayers. I told Justice Gomery that when I testified before him.
The day Justice Gomery released the report from which you quote, the Liberal Party delivered to the Receiver General of Canada a cheque in the amount of $1.4 million, which represents an amount beyond the amount identified by Justice Gomery in his report. We did that all without federal accountability legislation, senator. I was disgusted with what happened in sponsorship, as was my predecessor. We corrected those problems. We made full and complete restitution to the Government of Canada and the taxpayers of Canada as a result of those problems. We have paid a high political price for those problems. However, to call this proposed act a response to that is like saying the Highway Traffic Act of Ontario will stop all drunk driving. You may have a member of your party today that you are unaware of doing something akin to what occurred there. You do not know that. This proposed act will not prevent that. People break the law.
The Chairman: There are seven other senators who wish to ask questions of you today. I do not know if you were here at the beginning of the sessions, but we have several political parties today. Each party is being given an hour. You mentioned in your opening remarks that you are appearing alone, and I would ask that you give honourable senators an opportunity to put their questions. As I asked the previous witness from the Conservative Party, it would help us if your responses could be a little more concise, so that all honourable senators can be heard.
Mr. MacKinnon: Thank you, senator. I believe I have finished with that question.
Senator Stratton: I respect you for your response in the fact that the party did do what it did. With due respect, that was the correct thing to do.
It is true that you cannot prevent, that you can only try to limit what transpires. I do not believe that in this day and age a company should be allowed to donate $5,000. It has become a matter of principle that people, not corporations or companies, elect governments. It is important that the people of Canada have the opportunity to say to themselves, if they make a contribution of $50, that that contribution is significant, as compared to the $5,000 contribution by a company. When people think of a $50 contribution as compared to a $5,000 contribution by a company, the perception is this: ``Who gets to see the boss?'' That has got to stop.
Mr. MacKinnon: I am sorry. Could you repeat the last part of what you said, senator?
Senator Stratton: Essentially, a $50 contribution by an individual may be a significant sum for that individual. That individual's reaction to a contribution of $5,000 by a corporation may be, ``Guess who gets to see the boss.'' That is the public perception. It has got to end.
Mr. MacKinnon: Well, I guess who gets to see the boss are those attending the private reception for the Conservative Party of Canada in Montreal next month. Contrary to their stated policy, selling a $2,000 ticket for a private cocktail reception, Mr. Harper, I believe, said something about these private cocktail receptions repeatedly. Apparently, the Minister of Citizenship and Immigration has not spoken to the Prime Minister because he will be attending for $2,000 in Westmount.
Senator Stratton: I disagree with that.
Mr. MacKinnon: Will any $50 donors be there?
[Translation]
I would like to quote an excerpt from the Moisan report. I respect your views, senator. However, I also respect the opinions of those who have worked on and given serious thought to the Elections Act, to electoral principals and to the foundations of our country's electoral system.
Justice Moisan stated the following, and I quote:
Today, at a time when the dollar is constantly being devalued and a party's needs are constantly increasing, it is not possible to influence in any way a party's decisions or directions by contributing a maximum of $10,000 or $15,000 per party. Such contributions allow corporations to express in a tangible way their support for a particular party, one that in their minds, best represents causes near and dear to them, or one that eventually can achieve for them significant fringe or financial benefits.
That is the opinion of Justice Moisan who chaired the Quebec Commission of Inquiry into illegal political party contributions further to allegations that the Parti Québécois had accepted illegal contributions in violation of Quebec's Election Act.
With all due respect, senator, I accept and support Judge Moisan's findings.
[English]
The Chairman: Mr. MacKinnon, I make the comment that I made before. I have eight honourable senators who want to ask questions. We have 25 minutes left. Your answers have been extremely long, and I want to give honourable senators an opportunity to put a question to you. I would ask for a little bit of your cooperation.
Senator Zimmer: Mr. MacKinnon, thanks for your attendance here today and for your insight into this area of political donations.
I am interested in what you said about conventions. Why do you think there is such little mention in this bill about conventions, given we all agree it is an important part of the democratic process?
Mr. MacKinnon: My theory is that it was completely missed in the haste to draft a weighty, omnibus piece of legislation. My theory — it is only a theory, so accept it as such — is that the Conservative Party just missed this. The party forgot that they should have issued receipts to their convention. The Conservative Party did not realize, in drafting the bill, that this would have an adverse effect on conventions, and now are trying to stonewall to cover that important and flagrant miss — because ignorance of the law is no defence, as you know.
I repeat: Millions of dollars of undisclosed contributions to the Conservative Party put behind a wall, contributions that we may never find about. People may have over-contributed to the Conservative Party, and we will never know about it. To take this to it its fullest possible extent, the Conservative Party could have a $10,000 delegate fee to a convention, and we would never know because they could always claim they broke even on the convention, so it would create a huge loophole for political parties to hide, shield and keep under the carpet a huge contribution.
To take it to its fullest possible extent, the Conservative Party's position on conventions is wrong. It is wrong traditionally, and it is wrong in how the proposed act — it is wrong in terms of how practice has evolved over the years. The Chief Electoral Officer is fundamentally saying, in diplomatic terms, that it is wrong, and the proposed act in ignoring the treatment of conventions is also wrong. It fundamentally deters people from attending and participating in political party conventions. Liberals, Conservatives and New Democrats think that is wrong.
Senator Zimmer: Regarding your fourth recommendation, is your party comfortable with going back 10 years in disclosure?
Mr. MacKinnon: Absolutely, and to my knowledge, participants in our leadership processes have voluntarily disclosed all contributions.
Senator Zimmer: Regarding the level of donations you have talked about around the world on the subject of corporate and union donations — you mentioned many countries around the world — where does your party stand? Where do you stand? What do you think the recommendation should be in terms of levels?
Mr. MacKinnon: We support the position of former Prime Minister Chrétien's government, and we support Bill C- 24, which lowered the limits to levels, as I have demonstrated, that are the lowest in the Western world and among the lowest, if not the lowest, in Canada and the provinces. We think it has achieved some level of equilibrium, although we do yearn for a chance to participate in a proper evaluation and study of that legislation.
Senator Zimmer: You have a large staff that is dealing with the regulations from Bill C-24. There has been no formal study of that bill's effectiveness as proscribed in the bill. If we were to conduct a study today, what do you believe it would tell us about how effective Bill C-24 has been in achieving its objectives?
Mr. MacKinnon: Bill C-24 has gone a long way and certainly put Canada at the front of the pack in ensuring accountability, transparency and efficiency in our electoral process.
However, it has had some adverse effects. One is the professionalization of politics. Every riding association now needs an auditor, a CA, and that person must be paid. That person cannot be a volunteer. It has gone a long way in making political parties unwieldy bureaucracies in terms of administering and complying with the law. For that, we need professionals such as legal counsel, professional accountants and others who are expert in financial systems and other things. Those effects have not been truly measured.
However, the overriding thing that Bill C-24 has done is impose a burden on volunteers of all political parties. I know that the Conservative Party as well as my counterparts in the other party are preoccupied about the paper burden on volunteers. People do not get into politics to fill out Elections Canada forms and financial forms. People get into politics because they love their country and want to improve it. However, we have snowed volunteers of all political stripes under a mountain — an avalanche — of forms and compliance that I would say is a perverse effect of this rush to accountability and transparency, and some simplification of that process should be contemplated.
The Chairman: I would ask the honourable witness to provide an opportunity to all honourable senators who want to ask questions to do so within our time constraints. I also ask for cooperation from all of whom would like an opportunity to ask a question.
Mr. MacKinnon: I will endeavour to be as concise at possible.
Senator Mercer: I am the one person around this table who carries more scars from Bill C-24 than perhaps anyone else.
You have talked about compliance. I want to put on the record the burden that Bill C-24 has put on political parties. What percentage of your staff today is dedicated to compliance with Bill C-24 and other regulations imposed by government?
Mr. MacKinnon: In the national office, three quarters.
Senator Mercer: What would that be in terms of the budget of your professional staff?
Mr. MacKinnon: Probably three quarters, same proportion.
Senator Mercer: I want to say they are all very competent and dedicated people because I know them all.
I just need to get on the record that there is a large price to be paid for this — political parties should pay — and we should recognize that.
Senator Milne: Mr. MacKinnon, Mr. Donison pointed out the countries and provinces that ban corporate donations, and that of course includes Quebec.
Why do you think Judge Moisan and Mr. Côté have changed their minds about corporate donations?
Mr. MacKinnon: Justice Moisan relies heavily on Mr. Côté in coming to his conclusions. They speak, as Senator Segal has spoken, of a moral hazard, of enacting regulations that are so stringent that they become unenforceable and people find their way around them.
To refer back to an earlier question, our party has not been immune from that, even pre-dating current electoral legislation. Other parties, I will argue, will not be immune from it in the future.
If you create a rule that is hard not only to enforce but to live by, bad people will find a way around it. I just described to Senator Mercer the very significant investment we make in compliance. Despite those investments, there are individuals — for example, 200,000 people in the country walk around with a Liberal card. Fundamentally, that is all one of these five people in the sponsorship scandal did, walk around with a Liberal card claiming they were someone they were not with authority they did not have. That could be occurring today in the Conservative Party. We do not know that. The proposed federal accountability act will be a piece of dust to those people.
If rules are made that people will seek to get around, then a moral hazard is created that, I would submit, Parliament should not put in front of the Canadian people. Mr. Moisan agrees with that, as well as perhaps the best expert in the country on this issue, Mr. Côté. After 13 or 14 years of supervising that very law, he also has come to that conclusion.
Senator Milne: In your opinion, do you think that the contribution provisions in this bill would withstand a Charter challenge? Would you argue that these provisions unnecessarily limit the right of Canadians to participate in the political process?
Mr. MacKinnon: I am not a lawyer. As Senator Segal knows, as one of my former professors at Queen's, I am more inclined to the business side of the industry.
Incidentally, I have to talk to you, Senator Segal, about my mark in that course at some point.
Seriously, I do not believe that many provisions of this proposed act will survive the Charter challenge. The Supreme Court will rely heavily on a case called Harper v. Canada (Attorney General) in coming to that conclusion.
The early sections of the Charter — freedom of expression and freedom of association — are adversely impacted. That is the conclusion our counsel has come to and, I believe, the conclusion the courts will come to. That is all conjecture for another day.
It is subject to challenge, will be challenged and I have no doubt many provisions of this law, the electoral financing and others, will be struck down at some point. Seeds sewn in sanctimony yield a bitter harvest.
Senator LeBreton: I think Canadians watching the proceedings here today will see a classic example of what is wrong with the political system.
We had a witness, Mr. Donison, who addressed the provisions of the bill, and when questions were put to him, in a very respectful way to all Senate colleagues, did not throw around terms such as ``stonewalling'' and ``ignorance.'' It points to why people are so cynical about the political system. Your testimony today underlines again why the Liberal Party delivered a message in the last election.
Mr. MacKinnon: Can I ask you what part of my testimony underlines that fact?
Senator LeBreton: You can check the record. You used terms such as ``stonewalling'' and ``ignorance.'' You personally attacked Mr. Harper a couple of times. I did not see Mr. Donison doing the same to Mr. Chrétien or Mr. Martin.
Mr. MacKinnon: Specifically, I would like to know where I —
Senator LeBreton: I will leave it up to you, Mr. MacKinnon. I think if you look at the testimony, you have not served the political process or the Liberal Party very well today.
In terms of your testimony, I want to put on the record there was no Christmas Eve decision to exempt the party leadership race from Bill C-24. The party was formed, as you know, publicly by merger in early December, and the leadership was called by the terms of that merger. It was, therefore, automatically exempt from Bill C-24 because it was already under way.
You throw around statements using flowery language that just happen not to be accurate. I want to make it clear that there was public disclosure of donations for that leadership, as there was to the Progressive Conservative leadership where Mr. MacKay, Mr. Prentice and Mr. Brison were candidates.
I am not sure what website Mr. Brison's donors appear on, but the donor list to those conventions is on the website of the Conservative Party of Canada. The former Progressive Conservative Party of Canada appears on the website of the Conservative Party of Canada.
Mr. MacKinnon, you state motives of the Conservatives and Prime Minister Harper to deliberately cause damage to the Liberal Party. The fact of the matter is that our intention vis-à-vis the proposed federal accountability act was announced in November 2005, before the election was called and before the government was defeated in the House. It was talked about every single day of the election campaign, right up until January 23. The amount of political donations from individuals was well known to be $1,000.
We are now in September 2006. Mr. Martin on election night announced he was not going to stay on as leader of the Liberal Party and he named an interim leader. All of your leadership candidates and your party knew that you were going into a leadership race. The existing limits of $5,400, with inflation, were still in effect. What have the leadership candidates in your party been doing since January 23, 2006? You could be raising money at the old rate.
I should like to hear your answer to that question, but I would request that you cease impugning motives to others that are factually incorrect.
Mr. MacKinnon: It does not surprise me that you would find much of what I said to be contrary to your opinions.
What does surprise me, however — I do not know you, but I have followed your career with some interest. I know you to be a devoted and loyal servant of your party and someone who was there when your party was at its lowest ebb. I admire and respect you for that. You hung in when times were tough. The shoe was on the other foot, and I believe the shoe will once again be on the other foot at some point in the very near future.
I would ask you to rely on that experience and consider, along with Senator Segal who has had similar experience, that what goes around in politics truly does come around and that seeds sown in sanctimony yield a bitter harvest.
We are complying with the law. Leadership candidates are complying with the law. I should note that leadership candidates have forgone the right to raise funds from sources previously available to them, available to Mr. Harper. They have not received the corresponding public subsidy that political parties have received. That will be the case for your next leadership convention, as it is the case for ours today. We are complying with the law.
Of course they knew what Mr. Harper's intentions were. I do not think that prevents them, like me, from saying at every stop they make in Canada that it is wrong, that it is morally wrong, that it is wrong in any sense of fair play, that it is wrong in any democratic sense.
Why is there urgency in enacting these provisions in a year when the Chief Electoral Officer has said before the House of Commons, ``Please do not do that''? The Chief Electoral Officer of the land has said, ``Please do not enact these provisions now. Give us time to communicate with stakeholders.'' I like his expert word on this and I ask: Why is there this urgency? Peace in the Middle East is urgent. Action on HIV/AIDS is urgent. This is merely pressing.
I do not know why we need to enact these provisions in the middle of a Liberal leadership race, the biggest consultation in the history of our party, when we live under onerous and stringent transparency provisions that are already at the cutting edge of the western world politically. Why do we need to enact this accountability legislation today?
Senator LeBreton: The bill is before the Senate committee now. By the time it is back into the Senate and passed into law there will be just one month between the time of the passing of the law and your convention.
How is your party handling the loans that are being made to the various Liberal leadership candidates? How will you report them? Will they eventually be put down as contributions? What about the interest on those loans? It is on the public record that most of the candidates are having difficulty raising money, even under the present limit of $5,400. I would like to know how you will handle the whole issue of loans to candidates.
Senator Day: Is the honourable senator suggesting there should be amendments to this bill to include provisions relating to loans?
Senator LeBreton: No, I am not. I am just asking how the party will handle publicly the reporting of loans or donations and whether they will factor into the party's fundraising efforts.
Senator Day: We have been working really hard on Bill C-2, trying to improve it and move it along. I would like to tie this question into something in Bill C-2. Is the honourable senator able to help me?
Senator LeBreton: It is very relevant. Right now, candidates are allowed to raise money under the existing laws. Under the existing law or the proposed new law how will the Liberal Party of Canada handle the large loans that have been taken out by the various leadership candidates?
Mr. MacKinnon: I would be happy to answer that question.
Senator Day: I do not want to take up any more time. However, there is nothing in this bill about loans.
Mr. MacKinnon: The Canada Elections Act lays out in eloquent terms for everyone to see how such loans are to be treated. To the best of my knowledge, and we look closely, those provisions are being and will be followed to the letter. The fact that the honourable senator knows about these loans is a testament to the transparency with which this race is being conducted.
I would ask you: When will we know about the loans made to Mr. MacKay's campaign in the Progressive Conservative race? When will we know about the loans made to Mr. Harper in the Canadian Alliance race? Once again I repeat for the record that Mr. Harper has not revealed 99 per cent of his donors to the 2002 Canadian Alliance leadership bid that he made. That is a matter of public fact. You do not have to rely on me for that fact. You can rely on CTV for it. You can rely on Duff Conacher. You can rely on anyone you like. Mr. Harper has not revealed those donors. If you want to call that a personal attack, so be it.
Senator Stratton: Neither did Paul Martin.
Mr. MacKinnon: Yes, he did.
Senator Mercer: Yes, he did.
The Chairman: Honourable senators, we are out of time for this witness. Senators Comeau, Fraser, Segal and Day have been waiting and have not been afforded an opportunity to put questions to this witness. With the permission of honourable senators I would like to extend the hearing.
Hon. Senators: Agreed.
Senator Fraser: Mr. Chairman, I am sure all honourable senators will be delighted to know that my question has been asked and answered.
Senator Comeau: I would like to get back to the question of the delegate fees. I think you asked that delegate fees to conventions be exempt. Would those delegate fees not include the cost of the convention, such as the hiring of caterers, et cetera? In some cases, there would be a donation component to the delegate fees. Are you asking that the whole convention cost be exempted or just the part that is the donation?
[Translation]
Mr. MacKinnon: This is a highly complex matter. For example, if you attend a Conservative Party convention, you are issued a tax receipt for your donation. The amount appearing on the receipt includes any contribution to the party, minus the pro rata portion of the personal benefit you derive from the convention, namely a meal, a travel bag, a book and so forth. This principle is widely recognized by Elections Canada and the Canada Revenue Agency. Convention goers do not have to absorb the costs of the leader's suite, the carpets, microphones, entertainment and so forth. This principle was recognized by the Progressive Conservative Party and continues to be recognized by our party and by the New Democratic Party.
A convention will be held this weekend and receipts will be issued. That is how it works today and how it has always worked. I am not accusing the Conservative Party of some criminal conspiracy. However, the disclosure of this matter has not served them well. They tried to hide the fact, instead of admitting they had made a mistake and would be prepared to correct if the act had been violated.
That is my understanding of the situation. I feel confident that the facts will be confirmed by Elections Canada and the Conservative Party will suffer the consequences.
Senator Comeau: You have not really answered my question. You can resort to your political commentary if you wish, but my question is about the convention and the amount of the donations.
Take the Liberal Party as an example. A fee of $955 will be charged to those wishing to attend the convention in December. What portion of this amount will go to cover convention costs, and what proportion will represent an actual donation? I would like you to do the math for me.
Mr. MacKinnon: Our party's formal constitution requires that I draw up a budget for the convention that makes no provision for a profit of any kind.
However, your analysis, or premise if you will, is faulty. No part of the fee charged represents a donation or is used to offset the cost of staging the convention. A tax receipt could be issued to cover part or all of the delegate registration fees, provided no personal benefits such as a meal, a bag or a book are offered. This is quite separate from the costs of staging the convention. The practice is simple and this is how things have always been done.
For example, if a delegate receives a book, a bag or a meal, the amounts in question will be deducted from the delegate fees on a pro rata basis. For example, if the registration fee for delegates is $995 and a delegate receives $95 worth of personal benefits, setting aside the speakers, screens and microphones, that delegate will be issued a tax receipt for a $900 donation to our party.
This is a simple, straightforward procedure. The Conservative Party missed the mark and admitted as much. We will leave it up to Elections Canada to rule on this in due course.
Senator Comeau: You say that the portion deemed to be a donation represents personal benefits in the form of a bag or a meal. The remainder goes toward offsetting the convention costs. In other words, you would issue a receipt for $50 or $75.
Mr. MacKinnon: A personal benefit is a defined term.
Senator Comeau: And a portion does not go to offset the costs associated with the convention.
Mr. MacKinnon: That is correct.
Senator Comeau: Several newspapers, The Hill Times included, and several documents have reported that the Liberals, and in particular the Liberal senators, want to delay the implementation of this bill until January. We have already heard a number of comments about this. Are the reports correct? If so, has your party and its members, as parliamentarians, talked about delaying the bill's implementation until December, that is until after the Liberal convention has been held?
Mr. MacKinnon: No.
Senator Comeau: That was a categorical response.
Mr. MacKinnon: Yes, it was.
[English]
Senator Segal: I want to get back to the core source of the entire problem. When this bill was introduced in the Senate, I said, and I believe as I sit here — call it naivety or just my view of public service — that whatever the findings of the Gomery commission, which was pursued in good faith, whatever may emerge in the various court proceedings and police investigations which may still be going on, I never thought for a moment there was ever corrupt intent on the part of the Liberal Party leadership or the government or the Prime Minister or senior ministers of the Crown, as far as we know.
Having said that, there was corrupt activity, which we now have documented. This legislation follows upon measures introduced by Reg Alcock, the former Treasury Board minister, and the previous administration to deal with the genuine concern about the expenditure of public funds and the treatment of those funds in a fashion that respects the fact that they do not belong to us but to someone else.
If the federal government and the federal taxpayer were defrauded, I suspect there is ample evidence that the Liberal Party of Canada was defrauded and stolen from in the process by individuals who pursued their own activities in ways that all political parties from time to time face — namely, about their own personal illegal, inappropriate benefit and not about respecting the system — in violation of the premise of voluntary compliance and good faith which we take as given.
I think it would be truly helpful to the country and to viewers if you could share with us, either today or perhaps at a later day, if we do not have sufficient time, what you have done as national director of the Liberal Party to prevent the Liberal Party being in any way involved or victimized by this sort of activity in any Canadian province in the future. We are dealing with a series of measures that now deal with closing barn doors after events have transpired, which is what government tends to do. What have you been able to do to insulate and provide prophylactic protection for the system going forward in terms of your own people and your own organization?
The Chairman: The witness has already answered that question. He said that he appeared before the Gomery commission and explained what he and the Liberal Party have done to answer just what you have asked. Am I correct?
Mr. MacKinnon: Yes, but I might build on what I did say earlier. I do commend the committee to that testimony, which is on the record. I would say for the record that I volunteered to appear before Justice Gomery and did lay out in some detail and tabled mountains of documents as evidence in terms of that inquiry and what we had done to ensure that that would never happened again. We have a new relationship, financial compliance and others, with our provincial and territorial wings; it requires aggressive consolidation of all financial data. Our data that we submit to Elections Canada, for example, for the first time in history, represents the entire portrait of the Liberal Party and its provincial and territorial wings.
When we say we are out of debt, we are out of debt everywhere, and in a consolidated way. I am proud to say that we are out of debt. We have re-established, after two elections in quick succession, some degree of financial stability to the party, and I am proud of that accomplishment.
I thank you for your question because it presupposes that we have taken those measures. While Senator Comeau was reading the Hill Times, I was reading your commendable speech on the proposed federal accountability act. In my mind, it is the reflection of someone who has deeply thought about and participated in the affairs of his party and his nation. Conservative senators and Conservatives everywhere would be well served to reflect and read those remarks and think about them as you weigh this very important and sweeping piece of legislation.
Senator Day: There has been a number of references, including the most recent reference, to other documents. It would be helpful, it seems to me, if we could have the clerk deal with Mr. MacKinnon and obtain copies of those various submissions.
The Chairman: Mr. MacKinnon has said that he does not have a written submission today but will be filing one later. He can attach to that submission any documents he wishes, and they will become part of the public record once filed with the committee.
Senator Day: If it would be easy for you either to give us a reference to your submissions to Justice Gomery or copies of the material, it would help in completing the picture. A reference as well to Harper v. Canada (Attorney General) would be helpful to us.
I wish to thank you for your frank and clear answers. It does not help any of us, in dealing with a bill as complex and important as the one before us, to fall into the tempting trap of either defending a political party's position or attacking another political party. Neither do I think it helps us in any way to talk about the manner in which certain questions were answered by witnesses, either this witness or other.
I thank you for being here, and I hope you did not feel that you were on the defensive by this committee. We try to work constructively towards better legislation.
Mr. MacKinnon: I appreciate the opportunity. I wish to thank all honourable senators for that opportunity and for hearing our views on this important piece of proposed legislation.
The Chairman: Honourable senators, normally the chair thanks the witnesses but it has been done already.
[Translation]
Our next witnesses represent the Bloc Québécois. The committee welcomes Gilbert Gardner, General Director, and Martin Carpentier, Organization Director.
We want to thank you for joining us. Without further ado, I will turn the floor over to you, following which we will have questions and a discussion that I hope will prove beneficial to committee members.
Mr. Gilbert Gardner, General Director, Bloc Québécois: Thank you, Mr. Chairman. First of all, I want to say that overall the Bloc Québécois was receptive to Bill C-2. Various committees examined the proposed legislation, certain changes were recommended and the Bloc Québécois was involved in some of these meetings. Basically, I would like to focus on two points that we raised in the course of our previous presentations and on another situation that arose recently, given the fact that the bill is silent on these matters.
One of the main issues is the date of the coming into force of the provisions respecting party financing. I would like to reiterate comments made earlier. When the rules respecting political party financing are amended — and this is true for all federal, provincial or Quebec legislation — it would not be at all unusual to set out a process for properly informing the public of these new provisions. Quite apart from what is currently happening, there is no justification for taking precipitous action and for immediately seeking Royal Assent. We have proposed that the legislation come into force on January 1, further to it receiving Royal Assent.
As a rule, riding organizations plan their fund-raising activities over several months. They need to know exactly what rules are going to apply to them once Royal Assent has been given, whenever that might be. They must arrange for printed material and documents based on their fund-raising activities. Members of the public who get involved in democratic fund-raising for political parties need to know what rules apply and they need to comply with the legislation.
Another very important issue concerns the appointment of returning officers. We are pleased to note that nearly 30 years after the fact, the Government of Canada is following the lead of the 1976 Parti Québécois government headed by René Lévesque which enacted important legislation respecting the appointment of returning officers. For some years now, the Bloc Québécois has been demanding that returning officers be appointed on the basis of merit through a public competition process. The proposed legislation provides for such a measure. However, there is no requirement that the 308 returning officers currently on the job meet the merit test. We have recommended that the 308 current returning officers be required to meet the merit test within a time frame to be determined by the Chief Electoral Officer, bearing in mind as well the current political situation and the possibility of an eventual election. We have seen from past examples that merit does not always translate into good behaviour.
The third issue that we want to focus on is the fact that the bill is silent on the question of fees and dues charged for activities, conventions and so forth. We have said that it would be better to amend the bill to take into account the fees charged and to impose a ceiling on such fees. Quite conceivably, unlimited fees could be charged for attending meetings, symposiums and conventions. Clearly, opinion differs from party to party as to what constitutes or not a donation and inevitably, the issue will end up before the courts.
Consider a scenario where the court ruled that membership dues are not donations. This could result in all kinds of excesses that the legislation was endeavouring to prevent.
In essence, these are the three issues that we wanted to bring to your attention at this time.
Senator Fraser: I am quite intrigued by your comments about convention costs, particularly those associated with a leadership convention, a topic that is very much in the news these days. I know that it has been quite a while since your party has had a leadership race. Nonetheless, you are an expert observer. What do you feel an appropriate ceiling would be?
Mr. Gardner: There is a tradition in Quebec, particularly among sovereigntist parties, that is both the Parti Québécois and the Bloc Québécois, not to charge delegates attending annual conventions, not leadership conventions, any registration fees. Each delegate pays for his or her own accommodation and meals, but no registration fee is charged. All party members, and this goes for the Bloc as well as for the PQ, are entitled to vote. This approach is substantially different from that of the traditional Canadian parties.
What amount would you propose? We have not committed to any one amount, but we must not end up with a figure that would allow someone to do indirectly what the legislation seeks to prohibit more directly.
Senator Fraser: I have a second question. I believe you were in attendance this morning and heard the testimony of the previous witnesses.
Mr. Gardner: Only the testimony of the last witness.
Senator Fraser: That is the person to whom I am referring. He provided some details about financial control systems in place in other jurisdictions. He spoke of one case, which I cannot recall specifically, where in a normal year, X dollars were raised, whereas in an election year, if memory serves me correctly, twice that amount was collected. We are working on the premise that Bill C-24 was drafted with a majority government in mind, where elections would be held every four years. However, we have elected a number of minority governments and while we do not know if the trend will continue, the possibility of more frequent elections is very real.
So then is it possible that in another jurisdiction — the record will show which one — a political party could well receive more donations in an election year?
Mr. Martin Carpentier, Organization Director: The problem, as I see it, is that until such time as we have fixed election dates, no one can foretell when an election will take place or in what year. Bill C-24 allowed for the possibility of dual contributions in an election year. A person could donate two times the allowable amount of $5,400 to a candidate in an election year, or up to $10,800. The suggested amount in this instance is $2,000. Clearly the new financing rules will mean a lot of changes. A greater effort will have to be made to raise more money. A candidate who, in an election year, wished to make a regular contribution of $5,000 plus a $5,000 contribution to his election campaign, was able to do so, but this will no longer be an option for him. The maximum allowable amount will now be $1,000, plus an additional $1,000 in an election year. The problem is that the election date will never be known in advance.
It is fairly safe to assume that there will not be an election in 2006. As I see it, if we do not institute fixed election dates, we will be hard-pressed to implement these financing provisions.
Senator Fraser: Exactly. Let us suppose that something comes up — because strange things do happen, as we saw with the budget — and an election is called for November. Far be it for me to impute motives to anyone, but things do happen. All political parties had to finance an election campaign earlier this year and they will find themselves in a very tight spot if this scenario were ever to play out. We do not know when the next election will be held, but during the official campaign period, as Mr. MacKinnon hypothesized, all parties would experience some kind of problem.
Mr. Carpentier: The only way to remedy that would be to increase the ceiling on contributions by candidates and other individuals, but only for the duration of the election campaign. As a general rule, individuals make donations to the candidate's official agent. Therefore, we might consider allowing individuals to contribute twice or three times the allowable amount during an election. In other words, instead of donating $1,000, they would be able to donate $2,000 or $3,000, provided they go through the candidate's official agent who issues the appropriate receipt to them. That would be one way of controlling contributions.
Senator Fraser: Thank you, Mr. Chairman. Thank you for your indulgence, given that I am not a regular member of this committee.
[English]
Senator LeBreton: Before I start, may I offer my condolences on the tragic passing of Mr. Sauvageau, who was very active on the Commons side in dealing with the proposed federal accountability act and who contributed greatly to the debate. It is a very sad happening.
I have a follow-up on Senator Fraser's remarks. I agree, the situation is very difficult. First, one cannot anticipate when an election may take place. One of the things that is factored into it, which people are overlooking, is the payment back from the taxpayer for every vote.
It is a significant consideration in terms of whether we could even consider making provisions that are different for an election year. As a matter of fact, I think it would be quite impossible. It would contribute to the public's confusion over what is allowable and what is not. I wanted your thoughts on that particular aspect, the credit. The Canadian taxpayer is subsidizing all political parties based on the number of votes they receive in a given election.
[Translation]
Mr. Gardner: On the one hand, yes. On the other hand, we must not lose sight of the fact that 50 per cent of election expenses are refunded and that this also comes out of our tax dollars. Therefore, in view of these two provisions, when a regular election is called, parties really do not encounter any problems.
Inevitably, with minority governments, there is a greater likelihood of more frequent elections. That is what happens when the voters' express their will. Perhaps there is some wisdom to this phenomenon.
Personally, I am not in favour of introducing a dual mechanism whereby when issuing a loan, the money can be repaid at the end of an election period. I think this would result in some confusion, in the same way that confusion would be created if the legislation came into force before the Chief Electoral Officer and the parties had time to plan for these new important party financing rules.
Moving precipitously to implement the financial rules as soon as Royal Assent is given would be an example of partisanship. If the aim is to clean up politics, we must not look at taking action in the short term, that is on November 3, or December 2, but rather consider the situation from a more structured perspective.
As a general rule, legislation comes into force on the first day of January following Royal Assent. This delay gives everyone time to adapt and allows the Chief Electoral Officer time to inform the public of the new rules so that no one unwittingly finds himself or herself in a situation where the law is broken.
Senator Segal: First of all, I want to thank Mr. Gardner for his comments and for his opening remarks.
My question is a two-parter. First, I want to hear about Quebec's experience with party financing. As you know, a number of problems have been identified. Some large corporations arrange it so that each employee can contribute the amount allowed by law. Even if this amount does not represent a donation, the effect can be the same, especially if, for example, the members of a legal firm decide to band together in support of a cause.
Would you have any advice for the committee to prevent problems similar to the one that arose in Quebec and that have been openly discussed from cropping up with the new provisions respecting political party financing at the federal level? Are there any lessons to be learned from Quebec's experience to avoid these kinds of problems with the federal funding system?
Part two of my question concerns the State's role in the administration of political parties. One fundamental issue, as far as I am concerned, is freedom of expression. This is the very essence of our democratic system. A party must be free to express its views as it sees fit and to decide how it wants to select its candidates. The process must be an open one and be decided by each party, in accordance with the legislation.
Several European countries — and I will use Germany as an example — have a broad public financing program in place pursuant to which the State funds political parties based on the number of votes garnered in the last election. Certain rules govern the participation of young people in elections. A number of conditions also apply depending on whether a party operates a large policy research bureau. Not only must political parties register to prove that they have long-standing ties to the country, they must also show that they encourage the participation of women and new immigrants in the electoral process.
As a result of the new provisions, State funding levels could conceivably be increased. The legislation could limit taxpayer donations, and for good reason. In five or ten years' time, Elections Canada could bring in new conditions to ensure that a party is funded through the public system. Are you at all worried about these possibilities?
Mr. Gardner: Regarding your first question as to whether there are any lessons to be drawn from Quebec's experiences, I did mention one earlier, namely that returning officers should be selected on the basis of merit. To my mind, that is one positive lesson to be drawn.
It should also be remembered that when Quebec passed its election financing legislation in 1976, a rather disastrous situation prevailed at the time from a funding standpoint. The legislation was introduced to correct the abuse which continued elsewhere in Canada where similar legislation was not in place.
Bill C-24 sets more acceptable limits on contribution levels. Mr. Côté has indicated that maybe the time has come to review Quebec's legislation to allow corporations and unions to contribute a certain amount to elections. Historically, the Bloc Québécois has supported the election financing legislation as it currently stands. In our recommendations and in the position we have taken with respect to Bill C-2 and the proposed changes to the federal legislation, we have expressed support for the current provisions of the Quebec legislation.
The fact that the State is donating increasingly large amounts of money to political parties indeed gives it the right to ask for transparent, clear reports on how these funds are expended. However, I do not believe it is keeping with Quebec or Canadian culture for the State, through Elections Canada, to impose additional conditions or procedures or to require specific representation of any kind.
I do not feel that this would be in keeping with our culture or with the structure of our electoral system. After all, Elections Canada is an independent organization operating outside the reach of political powers. It would be surprising to say the least to see it impose quotas in terms of representation by young people, seniors, disabled persons or some other group.
Senator Segal: I have an additional question about this matter. Could someone possibly mount a challenge under the Canadian Charter of Rights and Freedoms over the question of the allocation of funds to political parties —
The Chairman: We are experiencing some technical problems with the sound. We will suspend the proceedings for a few minutes to allow the technician time to rectify the problem.
[English]
Honourable senators, we will now resume our study of Bill C-2.
First, I wish to apologize once again to the representatives of the Bloc Québécois for the technical difficulties we experienced earlier. Those difficulties have now been corrected and we are ready to resume our meeting with you.
I turn to Senator Zimmer to put the next question.
Senator Zimmer: Gentlemen, thank you for your attendance and especially for your recommendations in the area of implementation and convention fees.
Before I ask my questions, as Senator LeBreton did on behalf of Conservative Party, I wish to pass on our condolences to you and the family of Benoît Sauvageau, who is in our prayers. To show you what kind of a committed member of Parliament and human being he was, irrespective of the political church he belonged to, in May of this year Mr. Sauvageau attended a press conference — you may have seen this in the newspaper or on the news. A woman by the name of Nazanin Afshin-Jam came to Ottawa and held a press conference with Belinda Stronach and Benoît Sauvageau. The reason for the press conference was to help save the life of a woman in Iran who had been raped and who was to be executed. It speaks volumes about the man and for what he stood. He stood at a press conference with them, shoulder to shoulder in support.
At that time, I took a picture of this woman Nazanin, who happens to be Miss World 2003. He wanted that picture and I told him as soon as I got back from summer vacation I would get it to him. On behalf of this committee, I would ask you to pass it along to his family to whom he spoke about this event. I know he wanted them to have it.
Please pass on our condolences to the family. Here is the picture. Please ensure his family gets it in memory of what he did and tried to do for people around the world.
I should now like to move into the areas you talked about. I agree with you on your recommendation concerning an implementation date of January 1. That is the simplest thing we can do based on when this bill is passed. It makes things clear and clean.
I thought your suggestion concerning a cap on convention fees was innovative. I would certainly support something like that because it would certainly help solve some of these issues.
I am not sure if you have seen this report. A press release came out about a report of a retired superior court judge, Jean Moisan, wherein he recommended that corporate donations be at a level of $15,000 and individual donations be at a level of $5,000. What are your thoughts on that?
[Translation]
Mr. Gardner: First of all, rest assured that we will send this photograph to Mr. Sauvageau's family. Mr. Sauvageau worked on Bill C-2 and succeeded in having the title amended to prevent the use of an Anglicism. On the Thursday before he died, he told me that we absolutely had to get together this week to plan this meeting with the Senate. I will pass along the photograph to his family.
As for capping contributions and Judge Moisan's recommendation, the Bloc Québécois has supported a move to harmonize the federal and provincial acts. For that reason, the Bloc Québécois has been fairly receptive to the provisions of Bill C-2, which is a step in the same direction as the Quebec legislation. However, the one anomaly, as I mentioned earlier this morning, is the date on which the legislation would come into force. To ensure compliance with the legislation — and the vast majority of people customarily do comply — the public must be properly informed of the rules. Organizations and volunteers from the various parties who oversee fund-raising activities must also be in a position to pass the correct information along to potential contributors. Currently, the provisions of Bill C-24 apply. A formal date must be set for the coming into force of Bill C-2.
[English]
Senator Milne: I wish to follow up on that question. I noticed in your appearance before the House of Commons committee, you said: ``For example, if Royal Assent is given on October 1, bank authorizations following that date would no longer be valid, whereas those made before that date would be. Does the tax receipt apply to the elector's entire contribution for the calendar year, or only part of the calendar year? We think that if you exclude partisan reasons in the tradition of the implementation of this type of measure, the calendar year is normally the reference year.''
Are you suggesting strongly that the implementation date not be the time of Royal Recommendation but be January 1 or some other date the following year?
[Translation]
Mr. Gardner: Absolutely. For example, as a rule, bank authorizations signed in January or February are valid for 12 months. For personal or financial reasons, a person may decide to contribute to a particular political party and spread his or her contributions over a twelve-month period. Instructions are given to the bank to make these contributions, in accordance with the rules in place at the time. If the rules change over the course of the year and the person wishes to contribute a different sum of money, would the initial authorization still be valid, if Bill C-2 were to be strictly interpreted? No, because the total amount would exceed the new ceiling and the contributor would be in violation of the new Elections Act, even though he never initially intended that to be the case.
[English]
The Chairman: Thank you both very much. You have been very clear. Your message has been heard and understood. We will certainly take it very seriously in our consideration of the bill.
The committee adjourned.