HAFF Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Procedure and House Affairs

EVIDENCE

CONTENTS

Tuesday, April 8, 2003

Á

1110

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

Á

1115

Mr. Jacques Saada (Brossard—La Prairie, Lib.)

The Chair

Mr. John Wright (Committee Researcher)

The Chair

Mr. John Wright

The Chair

Mr. Jean-Pierre Kingsley (Chief Electoral Officer of Canada, Office of the Chief Electoral Officer)

Á

1120

Á

1125

Á

1130

Á

1135

Á

1140

Le président

Mr. Jean-Pierre Kingsley

The Chair

Mr. Ted White (North Vancouver, Canadian Alliance)

Á

1145

Mr. Jean-Pierre Kingsley

The Chair

Mr. Jean-Pierre Kingsley

The Chair

Á

1150

Mr. Jacques Saada

Mr. Jean-Pierre Kingsley

Á

1155

The Chair

Mr. Jean-Pierre Kingsley

The Chair

Mr. Benoît Sauvageau (Repentigny, BQ)

Â

1200

Mr. Jean-Pierre Kingsley

Mr. Benoît Sauvageau

Mr. Jean-Pierre Kingsley

Mr. Benoît Sauvageau

Mr. Jean-Pierre Kingsley

Mr. Benoît Sauvageau

Mr. Jean-Pierre Kingsley

The Chair

Mr. Guy St-Julien (Abitibi—Baie-James—Nunavik, Lib.)

Â

1205

Mr. Jean-Pierre Kingsley

Ms. Janice Vézina (Senior Director, Election Financing and Corporate Services, Office of the Chief Electoral Officer)

Mr. Guy St-Julien

Mr. Jean-Pierre Kingsley

The Chair

Mr. Dick Proctor (Palliser, NDP)

Mr. Jean-Pierre Kingsley

Mr. Dick Proctor

Â

1210

Mr. Jean-Pierre Kingsley

Mr. Dick Proctor

Mr. Jean-Pierre Kingsley

Mr. Dick Proctor

Mr. Jean-Pierre Kingsley

The Chair

Ms. Marlene Catterall (Ottawa West—Nepean, Lib.)

Â

1215

Mr. Jean-Pierre Kingsley

Ms. Marlene Catterall

Mr. Jean-Pierre Kingsley

Ms. Janice Vézina

Ms. Marlene Catterall

Mr. Jean-Pierre Kingsley

Mr. James Sprague (Senior Practitioner and General Counsel, Office of the Chief Electoral Officer)

Ms. Marlene Catterall

The Chair

Â

1220

Mr. Jean-Pierre Kingsley

The Chair

Mr. Ted White

Mr. Jean-Pierre Kingsley

Mr. Ted White

Mr. Jean-Pierre Kingsley

Mr. Ted White

Mr. Jean-Pierre Kingsley

Mr. Ted White

The Chair

Mr. Jean-Pierre Kingsley

Â

1225

Mr. Ted White

Mr. Jean-Pierre Kingsley

The Chair

Mr. Geoff Regan (Halifax West, Lib.)

Mr. Jean-Pierre Kingsley

Mr. Geoff Regan

Mr. Jean-Pierre Kingsley

Mr. Geoff Regan

The Chair

Mr. Geoff Regan

Mr. Jean-Pierre Kingsley

Â

1230

Mr. Geoff Regan

Mr. Jean-Pierre Kingsley

The Chair

Mr. Jean-Pierre Kingsley

The Chair

Mr. Michel Guimond (Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ)

Mr. Jean-Pierre Kingsley

Mr. Michel Guimond

Â

1235

Mr. Jean-Pierre Kingsley

Mr. Michel Guimond

Mr. Jean-Pierre Kingsley

Mr. Michel Guimond

Mr. Jean-Pierre Kingsley

Mr. Michel Guimond

The Chair

Mr. Michel Guimond

Mr. Jean-Pierre Kingsley

The Chair

Mr. Joe Jordan (Leeds—Grenville, Lib.)

Mr. Jean-Pierre Kingsley

Mr. Joe Jordan

Â

1240

Mr. Jean-Pierre Kingsley

Mr. Joe Jordan

Mr. Jean-Pierre Kingsley

Mr. Joe Jordan

The Chair

Mr. Dick Proctor

Â

1245

Mr. Jean-Pierre Kingsley

Â

1250

Mr. Dick Proctor

Mr. Jean-Pierre Kingsley

The Chair

Mr. Jean-Pierre Kingsley

The Chair

Mr. James Sprague

The Chair

Mr. James Sprague

The Chair

Mr. Jean-Pierre Kingsley

The Chair

Mr. Geoff Regan

Mr. Jean-Pierre Kingsley

Mr. James Sprague

Â

1255

Mr. Geoff Regan

Mr. James Sprague

Mr. Geoff Regan

Mr. James Sprague

Mr. Geoff Regan

Mr. James Sprague

Mr. Geoff Regan

Mr. James Sprague

Mr. Geoff Regan

Mr. James Sprague

The Chair

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CANADA

Standing Committee on Procedure and House Affairs

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NUMBER 032

l

2nd SESSION

l

37th PARLIAMENT

---

EVIDENCE

Tuesday, April 8, 2003

[Recorded by Electronic Apparatus]

Á  (1110)  

[English]

    The Chair (Mr. Peter Adams (Peterborough, Lib.)): Colleagues, we'll now begin. The order of the day is Bill C-24, An Act to amend the Canada Elections Act and the Income Tax Act (political financing).

    If our witnesses will excuse me, before we begin, and before Michel gets back, I'd like to deal with a little bit of housekeeping. You all have a copy of this draft work plan. I'd be grateful if you'd look at it now. I don't intend to discuss it in great detail now, but I propose to do so tomorrow evening so that we can get our heads around where we're going on Bill C-24 in particular and what we're doing with regard to other business that's before us.

    Tuesday, April 8, is where we are today. We have Jean-Pierre Kingsley and his colleagues here.

    Tomorrow evening from 5:30 to 7:30 is our in camera meeting on the draft report with regard to conflict of interest. Thomas assures me that this time food will be provided, so there's no excuse for not coming. That is a very important meeting. As I say, among other things, we will discuss this plan in more detail.

    In order that you have a sense of it and will be ready to comment on it tomorrow, I just want to mention that we have the NGO panel, which consists of various groups. By the way, the people involved in these things are listed in this report from Jamie and John dated April 3 entitled “Proposed Witnesses and Hearings for Bill C-24”.

    Then on April 29, which is after the break, you'll see that two panels are listed, one on campaign financing and one on public policy. They are two different groups of academics. The idea is that we would have the first panel from, say, 11 to 12:15, and the next panel from 12:15 to 1:30. Food will be provided.

    April 30, which is a Wednesday, is problematical. I'll discuss it again when we get to the matter of travel so that we can discuss travel tomorrow evening. There may be something to do with Quebec, Manitoba, or Ontario, the provinces we're particularly going to look at with regard to these hearings.

    On May 1, again you'll see two panels, the same format. I will come back to May 2, which is the travel day. If you could turn over to the other side, there is a possible round table for MPs on Monday, May 5, and at the moment a single panel on May 6. Then on May 8 there are two panels, a back-to-back format. The other item you see there has to do with our duties with regard to the electoral boundaries as the reports come in from the different provinces. On May 13 we have the minister again. We begin clause-by-clause, and we will continue it on May 15.

    Of course, we have no idea whether we will get to that point by that time, but that's roughly the outline.

    I'd like to come back to the travel, not to decide it now, I stress this, but so that by tomorrow we can discuss it. It has been suggested that we might travel to Quebec City, Winnipeg, and Queen's Park. Some people have suggested we might only go to Quebec City and Manitoba, and other permutations on it. Yet another suggestion is that a small group travel to such places or that small groups travel to such places, which, if you think about it, is different. I would urge you by tomorrow to get your heads around whether we need to travel and if so, how we should travel. The suggested day for that is May 2, which is in the bottom right-hand corner of the first page of this sheet. This is just so you'll think about it for tomorrow night.

    For those who are absent, and I know we have staff here, I'd be grateful if you'd convey that information.

    I am particularly concerned about the travel. It's not a matter of the arrangements. We have to get the money. There's a procedure for doing that. We need to decide that before the break.

    Thank you all very much.

    Jacques Saada.

Á  (1115)  

[Translation]

    Mr. Jacques Saada (Brossard—La Prairie, Lib.): If I understand correctly, then, the Sub-Committee has been reviewing the electoral boundaries, province by province? Do we know when the Sub-Committee will be reporting back to the Committee?

[English]

    The Chair: Okay, so on the worksheet on the second page, for example, the first one--John, you could remind me--is May 9. You'll see that it says, “electoral boundaries Manitoba, New Brunswick, reporting deadline”. That is the last day for our colleagues in those provinces to report to us.

    Mr. John Wright (Committee Researcher): I believe that's the date for it to be tabled in the House.

    The Chair: Okay. Thank you. So we have to deal with it sometime before then.

    Mr. John Wright: Yes. That's the date it has to be tabled.

    The Chair: I'm glad you asked because I didn't understand that. That is the day the reports for those provinces have to be tabled in the House. That means, from my point of view, we have to schedule consideration of those reports at some earlier date. That's the only one so far.

    May 28 is the Alberta reporting deadline, May 30 is the Nova Scotia reporting deadline, and Quebec and Ontario are later than that on June 13. Is that enough for now? I'll be clearer on that by tomorrow. Thank you very much.

    Colleagues, I would like to introduce our distinguished witnesses. Most of them are not strangers to this committee. Jean-Pierre Kingsley is the Chief Electoral Office of Canada. It's a pleasure to have you here again. Diane Davidson is Deputy Chief Electoral Officer and chief legal counsel, who again has been before our committee previously. Janice Vézina is the senior director of election financing and corporate services and has been here many times. James Sprague is senior practitioner and general counsel. James, it's a pleasure to meet you.

    Mr. Kingsley, we're in your hands and look forward to hearing what you have to say. Colleagues, you have copies of Mr. Kingsley's remarks.

    Mr. Jean-Pierre Kingsley (Chief Electoral Officer of Canada, Office of the Chief Electoral Officer): Thank you very much, Mr. Chairman. Good morning to you and to the members of the committee. I will be adhering relatively closely to the remarks that have been handed over to you.

    You've already introduced my fellow members here so I won't repeat that pleasure, but I will say that I am particularly pleased that you will be inviting representatives from all the political parties at the federal level to at least have an opportunity to speak to you about this very important bill.

    Bill C-24 proposes the most notable changes to the regulation of political financing at the federal level since the 1974 Election Expenses Act. That act was described by the sponsoring minister, the Honourable Allan MacEachen, as “the most comprehensive attempt at the reform of electoral expenditures undertaken in Canada”, and he was right.

    The 1974 act introduced spending limits for registered parties and candidates, and reporting of parties' and candidates' spending and revenues. It also introduced public funding through income tax credits for political contributions and post-election reimbursements to qualifying parties and candidates. As well, it created the position of the Commissioner of Canada Elections, who is selected and appointed by the Chief Electoral Officer. The commissioner is responsible for ensuring that the Canada Elections Act is complied with and enforced.

    Through these measures, the 1974 Election Expenses Act sought to equalize the chances of parties and candidates and remove much of the secrecy from the world of political finance. Its objective was to remove it all. It also sought to encourage more Canadians to become actively involved in the political process by contributing to the party or candidate of their choice and incited them to do so by the tax credits.

    These objectives remain important to Canadians, and they are reflected in the bill before you, in my view. However, public expectations of the electoral and political processes have evolved considerably since the 1974 reform; the legislative framework must also do so.

    It is important to recognize that Bill C-24 builds on a variety of sources, including the recommendations on political finance reform made a decade ago by the Royal Commission on Electoral Reform and Party Financing, provincial experience--and as I've noted from your potential travel plans, you've recognized those provinces--and other reports, some from members of academia whom you would also be meeting. It proposes to add a number of significant new elements to the Canada Elections Act.

    In the first part of my presentation today I will describe how the changes proposed by this legislation would work in practice. Notable among them are new restrictions on political contributions, a new regime of quarterly allowances to qualifying parties, and changes to the reimbursement rules for parties and candidates. As well, there are registration and reporting requirements for additional political actors, such as electoral district associations, nomination contestants, and leadership contestants.

    I will then address various aspects related to the implementation of Bill C-24: enforcement; application of the new requirements to political parties, candidates, and other registered entities; communicating the information on the new legislation to Canadians; and resource implications for Elections Canada.

    As is the practice whenever there is a change to the Canada Elections Act, Elections Canada consults with the advisory committee of political parties and other affected stakeholders. Past experience has shown this to be a winning formula, and we will continue to put it to good use when it comes time to implement Bill C-24. This practice was followed in preparing the report entitled “Modernizing the Political Process”, which I tabled in Parliament on November 27, 2001.

    I would like to provide an overview of how the bill's main provisions would function in practice. Among the most significant changes proposed by Bill C-24 are the proposed limits on contributions to federal political entities. Contribution limits currently apply in five provinces and two territories. In several cases, such limits have been in effect for 20 years or more: in Ontario since 1975, in Quebec since 1977, and in New Brunswick since 1979, for example.

Á  (1120)  

    I have already had exchanges with a number of my provincial counterparts about the practical workings of their regimes.

    The contribution limits proposed by Bill C-24 are straightforward. Political contributions from individuals will be limited to a total of $10,000 annually to the various entities of each registered political party; that is, to any combination of the local associations, candidates, nomination contestants, and the national party. In addition, individuals will be able to contribute $10,000 per election to independent candidates. Finally, a separate $10,000 limit per contest will apply for leadership contestants of each party, again by individuals.

    Corporations, trade unions, and unincorporated groups and associations will be allowed to make contributions of $1,000 per calendar year to the grouping of local associations, candidates, and nomination contestants of each registered political party.

    No corporation, trade union, or individual will be allowed to make contributions from money that has been given by others for the purpose of making a political contribution. Only unincorporated groups and associations will be able to make contributions from money given by others, to a maximum of $1,000 per year in total. These funds must have initially been given for the purpose of being donated to one of the political entities I have just mentioned.

    As the minister suggested on April 3, Bill C-24 does not address trust funds. However, the construction of the bill is aimed at preventing trust funds from being used as vehicles to avoid the rules for contributions and disclosure. In the future, it will be necessary first to determine who is the trustee. Is it an individual, a corporation, or an unincorporated association? The relevant contribution rules will then apply as they apply to the individual, the corporation, or the unincorporated association. Whoever is the trustee will determine the rule.

    If Bill C-24 is enacted, the Canada Elections Act will do much to eliminate the perception of, or potential for, undue influence from political contributions. However, the act is just one legislative tool to regulate flows of money into the political process. The broader package includes the Parliament of Canada Act, which has existed for a long time, and the proposed code of conduct for parliamentarians, on which you are working now, both of which apply or will apply to members of Parliament. There is also the conflict of interest and post-employment code for public officer holders, which applies to ministers and parliamentary secretaries--some 80 parliamentarians.

    The proposed code of conduct for parliamentarians, notably the statement for regular disclosure of assets and liabilities, is an essential element in the package of measures intended to ensure full disclosure, clarity, and probity in the regulation of funds that may lead to the exercise of influence within the federal political process or the public perception thereof.

    There are two other important elements to ensure the effectiveness of the new contribution limits. They are public information and enforcement. A public information campaign is necessary to ensure that all contributors are fully aware of how much they may contribute and to whom. It is essential that adequate enforcement mechanisms be put in place to ensure the new rules are complied with fully. I will have more to say on enforcement in a few moments when I address implementation.

    The second major element of Bill C-24 concerns the public funding of political parties and candidates. Here there are a number of changes. Foremost among them is the introduction of quarterly allowances to qualified registered parties. The eligibility criteria for receiving the quarterly allowance are the same as the present rules for party reimbursements; that is, any party that receives 2% of the valid votes nationally or 5% in those ridings where it ran candidates, an average of 5% in those ridings.

Á  (1125)  

    Based on the 2000 election results the allowance would cost some $19 million a year over what's being paid now. I would add that annual allowances to political parties exist in three provinces: Quebec, since 1977, New Brunswick, and Prince Edward Island. However, the system proposed under Bill C-24 is not an exact replica of any provincial regime. It is unique.

    Second, reimbursements to parties for election expenses will be increased from 22.5% to 50% of the allowable expenditures, bringing them in line with the rate for reimbursement to candidates. Candidates receive, as you know, 50% of allowable expenses.

    If this had been the rule at the time of the 2000 general election, qualifying parties would have received an additional $9.4 million over the approximately $7.7 million that was actually reimbursed. So that in effect more than doubles the amount; quite automatically, in going from 22.5% to 50%, you more than double.

    To take account of the revised definition of election expenses, the spending limit for registered parties will increase to 70¢ from 62¢ per elector in the ridings in which the party has endorsed a candidate; that is, 70¢ in the year 2000. That is an indexed amount.

    As is currently the case, this rate will be indexed for inflation. We estimate that if the revised spending limits had been in place in the year 2000 for the general election, qualifying parties would have received an additional $1.2 million. The total estimated increase in the cost of party reimbursements is thus $10.6 million.

    Third, the bill lowers the threshold for the reimbursement of candidates' election expenses from 15% of the valid votes to 10% of the valid votes. Had the 10% rule been in place for the 2000 general election, 126 additional candidates would have qualified for reimbursement, totalling approximately $1 million. The overwhelming majority of those candidates find themselves among the five parties represented in the House of Commons.

    Finally, the bill proposes higher brackets for income tax credits. The ceiling for receiving the credit for 75% would increase from $200 to $400 while the maximum tax credit would rise to $650 from $500 for a contribution of $1,275. According to the Department of Finance, and these are their numbers, the approximate additional cost of this measure would be $15 million over a four-year cycle.

Á  (1130)  

    Taxpayers now contribute to the public funding currently available to various political parties and have been doing so since 1974. That funding comes from general revenues with no reference to voting patterns. The new allowances to political parties would be tied directly to the level of popular support they received in the most recent general election. At the same time, minimum thresholds for receiving public funding are required to help ensure that the system does not create incentives for groups to establish themselves as parties for the purpose of collecting the quarterly allowances. There will still be the thresholds to be met.

[Translation]

    Now, I am going to speak to you in the language of Molière.

    A third set of changes involves a new registration and reporting requirements. The Canada Elections Act already requires registered parties and candidates to report on their contributions and expenditures. Bill C-24 would extend the obligation to report to registered electoral district associations, nomination contestants and leadership contestants. Under Bill C-24, electoral district associations would be able to accept contributions only if they register with the Chief Electoral Officer. Registered associations could be required to report all contributions and expenses—including transfers to or from registered parties and candidates—directly and on an annual basis (within five months after the end of the calendar year). The annual reports of registered electoral district associations will have to be audited only if the association has contributions or expenses of $5,000 or more. Registration and reporting requirements for local associations already exist in seven provinces. In Ontario, they have been in place since 1975.

    Under Bill C-24, nomination contestants of registered parties with contributions or expenses totaling $10,000 or more would be required to submit an audited report. An unaudited report would be required for those nomination contestants who received or spent $500 or more but less than $10,000. No report will be required the total contributions or expenses amount to less than $500.

    The reporting timeframe for nomination contestants would be four months after the selection date or, if the selection date falls within the election period for that district, or 30 days before it, four months after election day (i.e. at the same time as reports are due from candidates). So in this case, both reports would be presented at the same time.

    With respect to leadership contestants of registered parties, Bill C-24 would require them to submit a full report of contributions and expenses no later than six months after the leadership contest.Prior to this, leadership contestants would also be required to submit an initial report upon application for registration, setting out all contributions collected up to that point.

    Then, beginning four weeks before the selection day and continuing for each of the next four weeks, a weekly report of contributions would have to be filed. The first of them would cover all contributions received since registration; the next three would cover weekly contributions.

    For the most part, these new requirements for registration and reporting mirror the rules that registered parties and candidates have observed since 1974. So this is a concrete effort we have with a view to incorporating the existing requirements.

    Registered electoral district associations would be subject to basically the same provisions as parties, while leadership contestants and nomination contestants would be subject to basically the same provisions as candidates. In other words, the process would follow existing models.

    A fourth significant prevision in Bill C-24 concerns spending limits for nomination contestants. The approach is straightforward. The spending limit for nomination contestants would be half the candidate's election expenses limit for the most recent general election in that electoral district.

    I have just outline for you the major areas of change in Bill C-24 and how we see them working in practice. I would emphasize the Elections Canada has the tools to ensure that this legislation works. We will be ready to implement it by the day it comes in to force and will ensure a smooth transition to the new regime. This applies to all the comments I made in this regard during my presentation.

    The Commissioner of Canada Elections is responsible for ensuring that the Canada Elections Act is complied with and in forced. Bill C-24 will provide the means for the Commissioner to enforce the new previsions.

Á  (1135)  

    For example, offence provisions applicable to the newly regulated entities are, for the most part, modeled after existing offence provisions that currently apply to candidates and parties. Once again, we are trying to make the provisions consistent with the Act with which you are familiar.

    Bill C-24 also contains a broad anti-avoidance provision. The proposed section 405.2 prohibits any effort to circumvent the contribution limits, to conceal the identity of the source of a donation or to collude with any person or entity for those purposes. The Commissioner of Canada Elections would have responsibility to enforce the restrictions on contributions.

    In addition, the time for the Commissioner to prosecute an offence—and here there is a change—has been defined as 18 months after the day on which the Commissioner becomes aware of the subject matter of the offence, and not later than 7 years after the day the offence was committed. This provision regarding the length of time is something new.

    Given the significance of the new financial regulations proposed under Bill C-24, I recommend that the committee also consider restoring to the Commissioner and to the persons he designates the right to apply to a court (or a judge) for a search warrant for the purpose of investigating breaches of the Act. Such was the case until 1999. Currently, in cases where search warrants are required, the Commissioner relies on the police. This means that often the investigation could be turned over to the police.

    For the implementation of Bill C-24, the first priority will be to prepare for the registration and reporting of the additional entities that are to be brought under the Act's jurisdiction, namely, local associations, nomination contestants and leadership contestants.

    In order to prepare parties, candidates, official agents and other stakeholders, Elections Canada will develop and/or refine its information guides, instructional videos, support network and other tools. As part of our preparations, we will consult with the Advisory Committee on Political Parties, as I mentioned earlier. We had an initial discussion at our regularly scheduled March 7 meeting. We will pursue further discussions with the advisory committee.

    We estimate that to implement all the changes contemplated under Bill C-24, Elections Canada will incur some $3 million in one-time costs. There will be ongoing additional costs of $3 million annually, principally for the 35 additional permanent staff who would be required. Most of them will of course be involved in registration and auditing the reports that are filed.

    Once the bill comes into force, we will be making extensive use of information technology to facilitate the distribution of information and forms, and for the submission of reports. Elections Canada will also launch an advertising campaign to inform those affected by the legislation and Canadians in general of the new contribution limits and restrictions, and their responsibilities.

    I would be pleased to offer information sessions to the various party caucuses. We will also conduct seminars for other stakeholders.

    Finally, I note that some members have raised the appointment of returning officers during debate on Bill C-24. Given that the bill includes provisions to enhance the independence of returning officers, the committee may wish to consider a further amendment to the Canada Elections Act so that returning officers will, in future, be selected and appointed by the Chief Electoral Officer. I believe you have already heard about this.

    As I stated at the outset today, Bill C-24 introduces a number of significant changes to the rules governing political financing in this country. Those rules, which have been in place since 1974, reflect the values of fairness and equality—sometimes referred to as a "level playing field"—and of transparency and participation. The new elements in Bill C-24 would further reinforce these fundamental values.

    By extending the registration and reporting requirements to electoral district associations, nomination contestants and leadership contestants, Bill C-24 would further strengthen the value of transparency—that is, Canadians' right to know who is contributing to the political process and by how much.

Á  (1140)  

    By placing limits on political contributions, the bill would enhance the value of equality in the political and election processes. Specifically, the potential for large contributions to confer influence, or the public perception thereof, will be addressed. At the same time, the participation of individual Canadians in the electoral process should be encouraged through the increased tax credit provision.

    I am pleased to be part of the parliamentary consideration of the reform to the act now before you. As always, my office will provide any assistance you require during your deliberations. You need only tell us whether you need people from my office when you come to the clause-by-clause study of the bill. You will tell us whether you would like us to be here to assist you.

    My colleagues and I will be pleased now to answer any questions you may wish to raise. Thank you, Mr. Chairman and committee members.

    Le président: Thank you as well, Mr. Kingsley, for your offer and for your presentation. Would your colleagues care to add something at this point?

    Mr. Jean-Pierre Kingsley: I do not think they have anything to add now. That was not part of our plans.

[English]

    The Chair: Colleagues, we'll proceed in the usual fashion. Mr. Kingsley knows his replies are included in the member's time. We'll go in the usual way, roughly five minutes each, and this is the list I have for the first round: Ted White, Jacques Saada, Benoît Sauvageau, Guy St-Julien, Dick Proctor, Joe Jordan, then Ted White and then Geoff Regan.

    Ted, you are first.

    Mr. Ted White (North Vancouver, Canadian Alliance): Thank you, Mr. Chairman, and thank you, Mr. Kingsley and others, for joining us today to give your perspective on this bill.

    Mr. Kingsley, I'll definitely be introducing an amendment that would allow you to appoint your own returning officers. Unfortunately, I don't hold out much hope for the government to agree, but I'll definitely do that.

    We are on record in the Canadian Alliance as being opposed to this bill. We feel it's more appropriate for political parties to raise money from the public at large in the form of voluntary contributions than taking it from taxpayers' hard-earned money against their will. So that's on the record.

    That having been said, I think it's a matter of record also that if there were such a thing as a relative self-interest scale, the Canadian Alliance is a major beneficiary of this bill, relatively speaking, because we have relatively small contributions from corporate entities, so the net result of this bill is that we get a very large benefit. I just want that recognition out there, but we're still opposed to the principle. We were quite happy arranging our own funding.

    I do have a couple of questions related to all of that. I'm interested in this whole question of trusts, and you touched on that in your presentation. It seems to me that trusts could still be used to fund political activities and therefore to introduce a perception of influence as long as the use of the money is outside of riding associations or the parties themselves. What I'm afraid of, or anticipate, is that trusts could end up being quasi-electoral riding associations, because some people faced with these new registration rules and transparency rules might be tempted instead to set up trusts and to carry out political activities using those trusts as quasi-electoral associations. Particularly, those would have the potential then to have influence on ministers or even MPs at the local level with no scrutiny whatsoever, so I certainly welcome your comments on that.

    In terms of the contribution limits, Saskatchewan, when I look at their rules, appears to have erred on the side of political freedom of choice, as well as the freedom to spend one's own money as one sees fit. Are you aware of any studies that would indicate whether in Saskatchewan there was perceived to be more corruption or influence going on as opposed to a province like Quebec where there are very strict rules? Is there any actual measurement of this to say that these contribution limits are really necessary because they really do cause some sort of problem?

Á  (1145)  

    Mr. Jean-Pierre Kingsley: Through you, Mr. Chairman.

    The Chair: Finally, you will notice that Mr. Kingsley refers to the chair in his remarks. I just mention that, so please continue, Mr. Kingsley.

    Mr. Jean-Pierre Kingsley: I've been here 13 years, sir. I've learned a lot. It's the next 13 that are going to be hell for somebody.

    With respect to your third question, from the member, we're looking now to see if there's something I'll be able to answer; otherwise I'll be providing something in writing. With respect to returning officers, one never knows, Mr. White. One must continue to try these things.

    With respect to trusts, which is really the gist of the main point you were trying to make, what I was trying to allude to in my remarks is that if one looks at all the tools that Parliament is now working on to come to grips with the whole question of equity and transparency in public financing, the Elections Act unto itself would not be complete to handle trusts. What it will do is prevent trusts from being used to fund secretly, and the anti-avoidance measures will make that quite clear.

    Having been the conflict of interest person in a previous incarnation, I can tell you--and I alluded to this in my remarks--it's the report on your assets and liabilities as a member of Parliament, the regular reporting, whenever your assets go up or your liabilities go up, that will capture any money that is going to a trust that is controlled by a member of Parliament, because that would have to be reported. And the commissioner, who would be answering to all of you, presumably, would obviously have an obligation to report publicly any funds that were being provided to a trust controlled by a member of Parliament. If there were any attempt to falsify that statement then it falls into another statute, which is much stronger than anything else. It's called the Criminal Code.

    So I think there are very strong provisions that have been foreseen in the Canada Elections Act through these changes. And in the code on which you're working, at least in the draft I've seen, through your section 22, which deals with assets and liabilities, in conjunction with section 16 dealing with gifts and contributions, the moment you would lay your hands on assets or incur liabilities through a trust for whatever activity, that would have to be reported to the commissioner.

    On Saskatchewan, we will have to come back to you because I don't have the numbers in front of me, but I'll be more than happy to respond to that and look at whether or not there have been studies.

    The Chair: Thank you.

    Colleagues, as we're moving into these hearings, I would refer you to “Comparative Political Donation Regimes” by John Wright, March 25, which among other things deals with some of these matters province by province, but in particular, as we are receiving witnesses, includes a table, table 6 at the end, which compares the provinces and the different regimes. You might find that useful.

    I have Jacques Saada, Benoît Sauvageau, Guy St-Julien, Dick Proctor, and Joe Jordan.

Á  (1150)  

[Translation]

    Mr. Jacques Saada: Thank you, Mr. Chairman. I hope my voters will elect me for another 13 years, so that I will not be deprived of the pleasure of hearing your presentations for 13 years, Mr. Kingsley.

    I have five very quick questions to ask you.

    The public funding of $1.50 per voter does not take any account any geographic reality. It is clear to me that a political party that wants to be involved in political action in the field needs to be able to cover its territory. That goes without saying. Thus, the larger the area, the greater the expenses. Do you think it is right that the financing provided will be the same regardless of the size of the area?

    Second, do you have any objection to allowing the provincial wings of the political parties, where they exist, to register in the same way as the federal political party does?

    Third, as you are well aware, a new electoral map will be in effect beginning in June 2004. If the election is held in June 2004, which assumes good preparatory work beforehand, how do you explain the fact that the reports are by calendar year, when we could have two registration processes during the same year, if the election were in 2004?

    Fourth—and I mention this in passing, but I probably should have mentioned it at the outset—you know very well from my speech at second reading and also from your recording of my television program, that I support the fundamental principles of this bill, of course. However, I do have a major concern. Contributions to political parties by corporations will no longer be allowed, and the names of individuals who make donations will appear on the list. These individuals could make unofficial contributions on behalf of a corporation, and there would be no way of checking what the corporation intended. The public list will give the names of individuals, and not their ties to corporations. In other words, we are going to lose the transparency we have at the moment, whereby we know that a particular corporation made certain contributions. Is this not rather counter-productive? I am not saying it is, I am just asking the question to hear what you think.

    Finally, the $10,000 limit for individuals assumes a gross income of $20,000. Do you think that having individual contributions that cost $20,000 in income is a way of reducing the perception of undo influence?

    Mr. Jean-Pierre Kingsley: With respect to the limit of $1.50 per voter, Mr. Chairman, it is true that this is not linked to any geographical consideration, and in my opinion, this is a good thing. Voters are voters, wherever they may be located throughout the country. Some parties manage to field candidates in every riding, while others do not want to have candidates in all of them. But the amount is $1.50 per voter. Consequently, what will count is the party's electoral success, and I think this is a legitimate measure.

    You ask whether the provincial wings should be able to register. At the moment, they do not register. What they do is take advantage of the ability of the main office to issue income tax credits. We would continue to proceed in this way, or we could allow the provincial wings to take advantage of the current ability of the local associations to issue income tax receipts. In my opinion, some avenues have not yet been fully explored, judging from the questions. Could these provincial wings register? This is something the committee may want to consider, and we could certainly look into the advantages and disadvantages of such a provision with you.

    With respect to the calendar year and the two registration processes, particularly if there is an electoral boundary readjustment, there is one thing I can say to you. The bill in its present form could be improved if there were some transitional provisions that would simplify the entire process tremendously, if an election were to be held once this bill becomes law and using the new electoral boundaries.

    We have already concocted some transitional provisions, but one that would be easy to implement would be that the new local associations would be entitled to make a preliminary request to register and that they be able to try and obtain this right. Once the election is called, they would exist legally, and they would have the funds, which they could turn over to the candidates immediately. There are some things that could be done in this regard.

Á  (1155)  

[English]

    The Chair: Mr. Kingsley, could you be very quick, if you don't mind. I understand they're very interesting questions and perhaps we could come back to them, but if I get out of control here, I've lost it. All right?

    Continue.

[Translation]

    Mr. Jean-Pierre Kingsley: I am going to resist the temptation to answer your question as to whether the limit of $10,000 per individual is adequate. I have always hesitated to make any very specific recommendation regarding ceilings, because the knowledge represented around this table is much closer to the people than any I may possess. Consequently, it is up to you to determine whether the $10,000 limit is excessive or just right.

[English]

    The Chair: We'll leave it at that, Jacques, and we can come back to it.

    So we have Benoît Sauvageau, Guy St-Julien, Dick Proctor, Joe Jordan, and Ted White.

[Translation]

    Mr. Benoît Sauvageau (Repentigny, BQ): Good morning, Mr. Kingsley and ladies and gentlemen. If I may, before I begin, I would like to make a brief comment to my friend from the Canadian Alliance. Before he objects to a bill designed to make election campaigns more transparent by saying that it is taxpayers' money, I would like him to think about his party's opposition to pensions and about the fact that they came back to them afterwards. I do not think we should oppose changes and improvements in our system.

    I would now like to ask you a few questions about your presentation. On page 7, you say:

Foremost among them is the introduction of quarterly allowances to qualifying registered parties. The eligibility criteria for...

    Like Mr. Saada, I fully agree with the principle of the bill; I have no problem there at all. However, I would like some clarification of a few points.

    First of all, I am wondering whether the bill might be disadvantageous for new parties. Let us assume there is an alliance of parties on the right. This may be a utopian example, but let us imagine that the Conservatives join forces with the Canadian Alliance and form a new political party. In light of the fact that it is a new political party, do they get any money or not? Are they new candidates or former candidates? If this bill had been in place in 1993, what advantage would there have been for the Bloc Québécois to field candidates in all the ridings? What is the advantage of doing that for a new political party?

    On page 12 of your presentation, there is one point that surprises me. However, I have probably misunderstood what you mean. You say that in the case of nomination contest—in an electoral district—the approach is straightforward. It is true that it is straightforward. You say: “The spending limit for nomination contestants would be half the candidate's election expense limit for the most recent general election in that electoral district”.

    Thus, if I understand correctly, but I hope I am mistaken, that would mean that in the case of my nomination, I would be allowed to spend $60,000 in the federal riding of Repentigny. Does that mean that if there is a nomination in my riding, whether or not it is challenged, that each candidate is entitled to spend $30,000?

    At the moment, I believe that nomination expenses are based on the total number of members or voters or something like that. From memory, I think it can cost close to $4,000 or $5,000. However, when half the election expenses is allowed for a nomination, I think that would rule out many possible candidates. If one of the candidates is more well-off, I think this could become a rather delicate situation. I would like to hear your views on that.

    All of these expenses, or all of these reports, have a direct link to the new technologies, because for a traditional, folkloric election, of the type we have had since 1867, there have to be candidate's representatives, scrutineers and clerks. This causes a lot of difficulty and costs a great deal of money. If we have a new technology and can vote by computers and so on, there will be a direct impact on the cost of an election campaign. Has this issue being considered in the light of this as well?

  (1200)  

    Mr. Jean-Pierre Kingsley: Mr. Chairman, in response to the question about what would happen if two or more parties were to merge, under the current act—and this has not been changed—the new party would enjoy the best advantage of each participant. Thus nothing would be lost, and everything would favour the new party. The previous votes will go there. The party would get the equivalent of two contributions if each party received one before the merger.

    In the case of new parties, from what I have seen, the procedures would not be much more difficult. Moreover, some parties would benefit from the new rules and some benefited from the old rules. But it would not be all one way or all the other. I could bring you some evidence on this, if you like, but that is my conclusion.

    As regards the spending limits for nomination campaigns, I heard the minister say that he was prepared to consider what the committee would like to do in this regard if it thought that half the candidate's election expense limit was too high. Let me tell you something. There are some ridings in this country where a quarter of a million dollars was spent on nomination campaigns. That is what people objected to when they recommended that the limit be reduced considerably. To all intents and purposes, there was no limit in the past.

    Mr. Benoît Sauvageau: There is no limit at the moment.

    Mr. Jean-Pierre Kingsley: There is no limit under any act; it is up to the parties to exercise some sort of discipline.

    Mr. Benoît Sauvageau: And what about the new technologies?

    Mr. Jean-Pierre Kingsley: We have already taken the new technologies into account with respect to the reporting procedures. That is what I meant when I said that we had already... As you know, you can submit your reports to us by computer immediately.

    Mr. Benoît Sauvageau: I'm not referring directly to the implementation of the act, but to financing, to the use of new technologies for votes, during election campaigns, and so on. Were all these factors taken into account in this study? In other words, do you think we will have electronic voting anytime soon?

    Mr. Jean-Pierre Kingsley: Yes, there will be electronic voting soon, but not in the next general election.

[English]

    The Chair: Mr. Kingsley, if you and your colleagues do have additional information, I think you know the committee is always very pleased to receive it, particularly the item Benoît was talking about there.

    Guy St-Julien.

[Translation]

    Mr. Guy St-Julien (Abitibi—Baie-James—Nunavik, Lib.): Thank you, Mr. Chairman.

    First of all, I would like to thank the chief electoral officer and his team for the support they provided in matters relating to electoral boundaries in Quebec over the past several months. I know that it was not easy but they did a good job.

    The second point I would like to make, Mr. Kingsley, is that after several years of representations, the reform of the funding of political parties will strengthen democracy and will make the Canadian political system a model of transparency and openness and, this is something I would like to emphasize, it was through your perseverance that such a bill has been introduced for the benefit of Canadians.

    On page 12 you refer to a fourth provision of the bill relating to spending limits for nomination or election contestants. In large constituencies such as mine, covering more than 800,000 km² and where charter planes are used to travel 2,000 km straight north to Nunavik, there are no limits at the present time for a candidate. The candidate may spend $100,000 provided it is reasonable. That is not the case in a constituency of 9 km², the smallest in Canada, but it does apply to the big constituencies where charter air transport is used. I would be interested in knowing what is going to happen to candidates during an election. Will they be able to maintain the same pace, with respect to their personal expenses?

    On page 14, you say "In addition, the time for the commissioner to prosecute an offence has been defined as 18 months...". I note that in the bill, subsection 403.33(1), on page 17 is worded as follows:

    

403.33(1) A person who has sent a claim... may commence proceedings in a court of competent jurisdiction to recover any unpaid amount:

    What happens today if a creditor had a claim for the 2000 election due to an organization, a bank or a credit union? What are the rules? Is there a time prescription? Why is this fact set out in subsection 403.33(1)? What I would like to know is what happens today with respect to the election in the year 2000.

    On page 16 of your brief, you refer to returning officers and the possibility of having them appointed by the chief electoral officer. You mentioned that this wish was expressed and I agree with you on this point but for several years now you have been training returning officers in Canada. The system has been put in place, people have been appointed whatever the political party. What will happen once this bill comes into effect? Will these returning officers remain in their position with a grand-father clause because of their experience and the training that you provided them at the cost of thousands of dollars? These people will not suddenly disappear because you will be appointing new returning officers for the next election.

    Thank you.

  (1205)  

    Mr. Jean-Pierre Kingsley: Thank you very much. You made a comparison between nomination campaigns and election campaigns, I would say that when people are candidates, transportation expenses should be treated in the same way as they are under the present act. This is not possible under the bill, and I would invite you to consider an amendment along these lines. In this way, in ridings such as yours or other throughout the country, it would be easy to meet the needs of this type of campaign. In these cases, we could once again apply the limit, which is 25%, 10% or 15% of a normal campaign. However, the other expenses, which are called personal expenses, would not be part of that.

    As to the rules on debts, with your permission, Mr. Chairman, I will ask Ms. Janice Vézina to answer the question.

[English]

    Ms. Janice Vézina (Senior Director, Election Financing and Corporate Services, Office of the Chief Electoral Officer): Mr. Chair, for the 2000 general election the rule that applied was that if there was an unpaid claim remaining from the campaign 18 months after polling day, if it was still unpaid, then it was deemed to be a contribution to the campaign. There are some exceptions to that rule, and you can find them in section 450 of the current act. These unpaid claims must be published once it's determined that there are no exceptions to that rule; the ones that do not meet the exception must be published as contributions.

[Translation]

    Mr. Guy St-Julien: Thank you.

[English]

    Mr. Jean-Pierre Kingsley: Mr. Chairman, this is with respect to the last question.

[Translation]

    I told the DROs currently in place that if the Chief Electoral Officer were to have an opportunity to select and appoint them, 90% of them would retain their position. In my opinion, there are only about 20 of these individuals about whom we could say that the system would be better off if they were to leave. That is all the initial turnover I would anticipate.

    I too want to take advantage of existing knowledge. I certainly do not want to run an election with all these changes that were made last time the electoral boundaries were readjusted.

[English]

    The Chair: Merci. Thank you.

    Dick Proctor.

    Mr. Dick Proctor (Palliser, NDP): Thanks, Mr. Chair.

    Mr. Kingsley, welcome, and thanks for the presentation.

    When Mr. Boudria was before the committee last week, he indicated to us that many of the recommendations that are in these amendments to the Elections Act were recommendations that were put forward by Elections Canada. I'm curious to know, specifically on the $1,000 donation per electoral district by trade unions and corporations, whether that was one of the recommendations that was advanced from Elections Canada to the minister responsible for introducing this bill.

    Mr. Jean-Pierre Kingsley: The answer is no. The only recommendation I made was a public recommendation that was tabled November 21, 2001, and there was a general capping of contributions for unions but not at the $1,000 level; the way it applied, they could still contribute to parties.

    Mr. Dick Proctor: Thank you very much, especially for being candid on that. That was my guess, that it's probably not anything.

    I must say that it's something that concerns us a little bit because while it doesn't sound like very much, at the outset there's already some proposition that it's going to be changed to $2,000 under specific circumstances. Then we have members of this committee who were also saying, well, that's not enough; it should be $10,000. It seems to me this is the thin edge of the wedge.

    The specific question I have is, has any thought been given by you or the folks at Elections Canada about alternative formulae that might come into play here that would deal with the issue? We want a fairly tight bill here, and I think that once we start introducing amendments, we go down a slippery slope. We've seen it in other jurisdictions and we've seen it with other laws, and I think it's important for us to get it right the first time.

  (1210)  

    Mr. Jean-Pierre Kingsley: That's why I flagged very few proposals for amendments I would submit to you, because I recognize that this bill constitutes a cohesive whole, and they're very basic principles. It is, in my view, a viable approach, and if one tampers with the limits that are there with the way that...and with a ban in several other respects, the whole balance of the statute may well be affected deleteriously.

    That's why I'd be willing to work with the committee through my people or to come back and see if there are limits you want to play with that would still preserve the principles of the bill yet maybe satisfy members somewhat more about the limits.

    Mr. Dick Proctor: Okay.

    Specifically on this part of it, although Elections Canada didn't propose it, are you okay with it or not unhappy with it? You think it's reasonable in a free and democratic society, as they say, that we make this exception whereby businesses and trade unions may be able to donate to candidates, but not to political parties?

    Mr. Jean-Pierre Kingsley: As I said, yes, I think it is a viable option. I think this bill is a cohesive whole that can stand public scrutiny and meet the test of reasonableness, which Canadians want and would like the electoral statute to meet.

    Now, it may be possible to vary it somewhat. I've heard the suggestion that maybe there could be multiple contributions of $1,000, with up to five such contributions allowable to candidates. This is something that could be looked at.

    Mr. Dick Proctor: I think the impetus for this kind of thing is the notion that it's perhaps going to be hard for some candidates to raise money who, traditionally or heretofore, have raised it through either business donations or trade unions. Do you see any other way that this could be addressed in the bill, to allow us to continue to be pure on this and not to accept these kinds of contributions for either candidates or political parties?

    Mr. Jean-Pierre Kingsley: I see in the bill something to which I've alluded a little while back, Mr. Chairman, which is the tax credit. I think a lot can be done with the tax credit. I think a lot can be done with personal contact.

    Personally, I think Canadians will look at political contributions in a different light if they know they are the source of political financing and that, in effect, corporations and unions have been dried up by law--except for some small contributions for candidates and a few other places at the local level. I think this may affect the psyche.

    With all due respect, if I were a candidate or a political party, it's certainly something I would put out to Canadians when I asked for money. I would say, “You are now the source of financing, plus it's 75% of the first $400”.

    So within the present statute as proposed, there is something there on which work can be done.

    The Chair: It's Marlene Catterall, Ted White, Geoff Regan, Michel Guimond, Joe Jordan, and Dick Proctor.

    Ms. Marlene Catterall (Ottawa West—Nepean, Lib.): On the issue of nomination spending limits, it has been suggested to us that we should drop the percentage. I personally find it unacceptable that one should be able to spend 50% of the spending limit to reach all constituents and to treat the members of a particular riding association, who will be choosing the candidate and the nomination. The issue has come up of how much we might reduce that, particularly how it would affect larger, more distant ridings, where running a nomination campaign is potentially more costly.

    Could you explain to us how the current spending limits in geographically large and spread-out ridings already account for distance and the extra expenses involved in running an election?

  (1215)  

    Mr. Jean-Pierre Kingsley: Mr. Chairman, I will briefly explain, as I attempted to do a little while back, and then with your permission I will ask Janice Vézina to add to how the formula is arrived at.

    Please keep in mind that what are called personal expenses would escape the definition. They are big because they involve travel, which is obviously the big issue in a large riding.

    Janice, perhaps you can explain how the average formula is upped when it is a large riding.

    Ms. Marlene Catterall: Can I just be clear about the personal expenses you need for a nomination campaign?

    Mr. Jean-Pierre Kingsley: Yes, but that would also apply in running for the nomination, as it does now for when you're a candidate. Okay? The same definitions would apply mutatis mutandis. But as I've indicated, it would require a change to the present bill, because it's not clear--which is why I think MPs, quite rightly, are confused.

    But could you explain the formula very briefly?

    Ms. Janice Vézina: The base calculation is a dollar amount per elector on the preliminary list of electors or the revised list of electors, whichever one gives the greatest result. The adjustments made after you have calculated the base amount are based on whether the number of electors in the riding is less than the national average of electors. So if the number of electors in your riding is less than the national average, then an adjustment is made. The number of electors is increased to halfway between the number of electors in your riding and the national average. So there's an increase.

    Then, in terms of the sparsity of the population, an adjustment is made if the number of electors per square kilometre is less than 10. That adjustment is the amount of 31¢ per square kilometre, or 25% of the base amount, whichever is less.

    It's a little complicated, but basically, yes, there is an adjustment for sparsity and there's an adjustment for low population.

    Ms. Marlene Catterall: Okay, but would it count for that, then, already if we're using a percentage?

    Ms. Janice Vézina: That's right.

    Ms. Marlene Catterall: Secondly, on page 5, in the second paragraph, it seems to indicate to me that I cannot give my children money to contribute to my election campaign or my riding association, but I could give money to an unincorporated group or association to do the same thing. Can you rationalize that difference?

    Mr. Jean-Pierre Kingsley: Mr. Chair, with your permission I'll ask James Sprague to answer that question, please.

    Mr. James Sprague (Senior Practitioner and General Counsel, Office of the Chief Electoral Officer): Mr. Chair, the question is answered in the following way.

    If you want to give your children money to make contributions, that's not going to be permitted. It could be perceived as an attempt to get around the contributions limits. However, if you give your children money for their birthday, intending it to be for their birthday, with no intention of giving it to them to hide it as a method of making a contribution, they can use that money the same way they could use it to buy a Ferrari or anything else; they could use that money to make a contribution.

    The unincorporated associations will operate as a means for fundraising to be carried on in the country. It will only be permitted to be carried on by unincorporated associations. So while your children don't exist primarily for the purposes of fundraising, the bill will recognize unincorporated associations as being able to carry on fundraising activities to allow you to make contributions to the fundraiser, pass your money to a fundraiser, and the fundraiser will be allowed to pass on those contributions to one of the regulated entities, subject to the $1,000 limit they have annually.

    Ms. Marlene Catterall: Could I just have a little more clarity on that in writing some time before we do clause-by-clause? Perhaps we might consider an amendment in terms of birthday gifts.

    I think the Saskatchewan wording is that no person can contribute from moneys to which they are not beneficially entitled.

    Could you suggest an alternative?

    The Chair: We will consider the amendment. We have noted it.

    So it's Ted White, Geoff Regan, Michel Guimond, and Joe Jordan.

  (1220)  

    Mr. Jean-Pierre Kingsley: I just want to make one comment, very rapidly.

    The royal commission recommended that the limit should be 10% of the riding spending for candidacy. So you might want to consider that when you're considering the math.

    The Chair: Thank you. We've made note of that.

    Ted.

    Mr. Ted White: I have a couple of questions.

    First, I'd like a clarification on this trust situation. If I were the minister of something and a group of political supporters set up a trust in my riding for me and used that trust to dispense grants, say, to local organizations with the compliments of Minister White, and they bought me an automobile for my use, is that trust in any way captured in the reporting requirements of this bill, or can that activity go on completely outside of this bill?

    Mr. Jean-Pierre Kingsley: On the activity, no contribution could be made to the campaign unless it met the requirements of this bill.

    In the example you've used--and I will go back to my past--if you're talking about a minister, the minister could not do this without reporting to the commissioner of ethics that will apply. The commissioner of ethics would say, no, you cannot accept that car; you cannot accept that the trust be established to further your lifestyle. That's exactly the type of decision I used to make when I was in that office, to prevent that from happening.

    That's what I meant, sir, when I said various tools are required and they cannot all be contained within one statute, unless you wish to put the code under this statute as well.

    Mr. Ted White: Thank you for that clarification.

    In terms of costs, gathering all the information about the various contributions or costs that would be involved in getting this system up and running, does the $3 million you've mentioned for start-up costs include the cost of the information seminars you've mentioned as part of your presentation?

    While we're on the cost issue, I notice that there seems to be some sort of Elections Canada involvement and an enumeration going on in Ontario at the moment. I'd like to know why that's happening, how much it's costing, and is it some sort of indication that this permanent voters list is not working?

    Mr. Jean-Pierre Kingsley: Yes, the one-time cost of $3 million would include things such as seminars for the dissemination of information to the key players as well as publicity campaigns, mainly through newspapers, about educating Canadians about the rules and other donors. With respect to the exercise that has been undertaken jointly with Elections Ontario, Elections Ontario was already undertaking a review and an update of its register of electors, which is based on the federal register of electors, and doing a targeted enumeration.

    We tagged onto that, in order to get the benefit of that exercise and also to pursue other names that have come our way through the CCRA information we get to ascertain Canadian citizenship before being able to add the people to the list.

    It will cost us approximately $2 million at the federal level, and we will have added, I think, over half a million electors to the list. Of course, we stand to benefit from getting the final list of electors once Ontario has finished its election.

    This, sir, is a clear example that the register is working, but these are tools that we are developing to make it work even better, so that we have even more people at the right place when the election is called.

    Mr. Ted White: So it's not a comprehensive enumeration; it's a targeted one.

    Mr. Jean-Pierre Kingsley: It is strictly targeted to that famous 20% I keep talking to you about, who are the people who have moved from one place to another and are hard to keep track of.

    Mr. Ted White: Another question for you, through the chair, of course, is with regard to the entire content of the bill. Are there some aspects of the bill that go beyond what you believe are necessary? If so, what parts of the bill go beyond provisions you think are necessary for transparency or benefit to the voting public?

    The Chair: I think it's better if you leave that to Jean-Pierre. We have an excellent pilot here. You're cancelling him out two or three times.

    Mr. Jean-Pierre Kingsley: I apologize to the pilot. My flight is in your hands.

    Thank you, Mr. Chairman, for pointing that out.

    On top of it, through all the discussions we've been having, having received various drafts, reiterations of the work as it proceeded, there's nothing in this bill that stands out, to me, as not necessary. As I was saying before, I consider it to be a package that is finely balanced. Of course, people may wish to balance it somewhat differently, but unto itself it's a package that is easily defensible, in my book.

  (1225)  

    Mr. Ted White: Okay. Finally, just a real quickie for you. I did hear in passing, when you were answering a question from the Bloc about the availability of forms, perhaps, being available on the web.... Is that what I'm reading, that riding associations may be able to make their reports or their submissions or at least get forms off the website?

    Mr. Jean-Pierre Kingsley: We're looking to simplifying the matter, not only in terms of what is required to be reported--because this is one of our values--but also the manner in which this can be done. And web facilitation, computer facilitation, is definitely high on the list so that we receive these things automatically and people get inured to this in no time at all.

    The Chair: Ted, thank you very much.

    It's Geoff Regan, Michel Guimond, Joe Jordan, and Dick Proctor.

    Mr. Geoff Regan (Halifax West, Lib.): Thank you, Mr. Chairman. And to our witnesses, welcome. Thank you for coming today.

    Let me ask you first of all, Mr. Kingsley, about the 1996 recommendations you made that you've referred to recently in relation to the discussion we've heard about the so-called in and out method. Can you tell us how these recommendations would address that situation?

    Mr. Jean-Pierre Kingsley: Very briefly, the in and out method has a person working for a candidate or a party being paid for services being provided that in some cases would be recognized as services that would normally have been provided for free. That's the first thing. That, of course, results in an increase in the expenditures, which therefore results--should the candidate win 15% of the votes or more--in a 50% reimbursement.

    On the other side of the equation, that person then turns around and makes an equivalent or similar contribution to the party for which he's working and is therefore out of pocket in terms of that money, but then gets the credit that goes with that, which would amount to several hundred dollars, depending upon the amount that was given.

    The gist of what I was saying is if you take each one of those acts, one after the other, they are legal. If you take them in their totality, in my view--and in 1996 there were slightly different circumstances that led me to that conclusion--that takes it beyond the initial purpose of the parliamentarian who enacted that statute.

    The recommendation I made was that that particular circumstance, when it is arrived at between the parties--in other words, a contrived situation--should be blocked, not where it occurs with no arrangements being made whatsoever, with everyone acting above board.

    Mr. Geoff Regan: Through you, Mr. Chairman, would you see that as an amendment to this bill or would you see an expanded anti-avoidance provision? How would you see addressing this?

    Mr. Jean-Pierre Kingsley: I think it would be through an amendment to the anti-avoidance provisions, which would be broadened. We have done some work on that, which we're willing to share with the committee and with the Privy Council Office, obviously, to see if there is any interest in pursuing the topic.

    Mr. Geoff Regan: Okay, thank you.

    How many personnel--through you, Mr. Chairman, again--

    The Chair: There's no need to grovel, you know.

    Mr. Geoff Regan: I just don't want to be cut off, based on past experience, you know?

    How many additional personnel do you see being needed to deal with the reporting requirements and the oversight of electoral district associations across the country? Of course, now we'd have to maintain the registration, file the reports in some cases, etc. What kind of personnel do you see required for that?

    Mr. Jean-Pierre Kingsley: The total requirement for additional personnel for all facets--and that would include the commissioner and so on--is a maximum of 35 people.

    There would be 18 reviewing the accounting that comes in. There would be five or six dealing with the registration process itself. That's the answer to your question--18 for processing and 5 for receiving, plus additional ones for the commissioner.

  (1230)  

    Mr. Geoff Regan: In relation to the paperwork burden on electoral district associations, I've spoken to you previously when you've been here before our committee on the question of the paperwork and duplication required for official agents, and I expressed to you the frustrations of my official agent in the last election, who could not believe the amount of documentation he had to go through, the hours it required him to take out of his practice as a practising accountant on things that seemed to be done over and over, that seemed to be unnecessary overlap and duplication.

    One of the concerns I see as I look at this bill is more of the same, particularly in relation to the paperwork burden on associations. What do you have to say about that, and how do we minimize it?

    Mr. Jean-Pierre Kingsley: Mr. Chairman, there are two measures that must be taken into account here.

    Number one, we tabled with you several weeks ago the study we had conducted and kept you informed of concerning the very work of those agents. There are in there a significant number of measures to simplify the work. I can't remember if any of them requires statutory change, but we'll draw them to your attention if any of them do. We made this presentation before the Advisory Committee of Political Parties, and they accepted the recommendations.

    The other thing is, we would want to go back to the Advisory Committee of Political Parties to design the systems with them--and I'm willing to come back to this committee for those that touch on candidates--so they agree with what we're going to be asking for to simplify the whole process.

    Our objective is going to be to simplify it to the fullest extent possible while meeting the minimal requirements of the statute.

    The Chair: Thank you. I remember the report. Could you give us the title for the record?

    Mr. Jean-Pierre Kingsley: Yes. It'll come back in a minute, and I'll give it to you, Mr. Chairman.

    The Chair: Thank you very much.

    Next is Michel Guimond, followed by Joe Jordan and Dick Proctor.

[Translation]

    Mr. Michel Guimond (Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ): Thank you, Mr. Chairman.

    In answering Mr. Regan's question, Mr. Kingsley, you clearly explained the in-and-out procedure and confirmed that it was a legal accounting method.

    I would like to check whether I understood the following correctly: the explanations provided by officials from your office at meetings for the main party agents before the general election were provided at information meetings held by Elections Canada just before the 1997 and 2000 elections. Is that correct?

    Mr. Jean-Pierre Kingsley: Mr. Chairman, the training sessions that we offer during election campaigns are provided at the same time to all candidates from all parties. An invitation is sent out, the choice of language is specified and the teaching material is the same for all groups. The staff from Consulting and Audit Canada are hired to do the work and we give them previous training.

    Since they know that the chief electoral officer has recommended that this practice be stopped, they certainly would not be recommending this way of doing things. But if they are asked, and it is quite possible that the question was put to them, whether, it would be legal if it were to occur, then they would have no choice but to answer yes. That is the situation as it now stands. I would not recommend doing away with the practice if I thought that it was already illegal.

    Mr. Michel Guimond: When this question became topical last week, did you check in each of the constituencies to find out whether this practice was restricted to a single political party? Did you do an overall investigation before responding? You answered quickly and you confirmed the legality of the practice. It might be assumed that this is being done by several parties.

  (1235)  

    Mr. Jean-Pierre Kingsley: Is that the question?

    Mr. Michel Guimond: Yes. It might be assumed that it is the practice of several political parties, wouldn't you agree?

    Mr. Jean-Pierre Kingsley: Mr. Chairman, we did not conduct a thorough investigation of the practice. I asked to have a sample prepared to give me an idea of the situation but the fact remains that the question was asked about a single party. If one can make certain assumptions based on the figures alone, it is obvious that the practice was carried out and that it also took place, to a lesser degree perhaps, within the system.

    Mr. Michel Guimond: Thank you, Mr. Kingsley. I do not know whether you have someone in your office who regularly follows the proceedings of this committee. I do not wish to breach in-camera secrecy but I would like nonetheless to point out that we are now considering the possibility of going to certain provinces, particularly Quebec and Manitoba, two provinces that, as you have noted in your presentation, have done pioneering work in electoral funding and reforming standards for electoral practices, so that we can be better informed about their systems. We may also travel in Ontario.

    We would like to arrange some panel discussions with parliamentarians from the various parties represented in these legislatures as well as officials from the provincial electoral office.

    In order to facilitate the work of the Library of Parliament, would it be possible for members of your staff to suggest a list of questions or specific points that we could raise during these meetings? The idea is to have as productive a meeting as possible.

    Could you send us this?

    Mr. Jean-Pierre Kingsley: The answer is yes.

    Mr. Michel Guimond: Good.

    Let me conclude with a matter that may not be directly linked to financing but that does come under your responsibilities as Chief Electoral Officer of Canada. When there is an election in a province, as is now the case, is there someone from your office in attendance as an observer to watch over this process? I am sure that in Elections Canada, your constant concern is the pursuit of excellence and the improvement of the system through the correction of irritants that may arise from elections.

[English]

    The Chair: Very briefly, Mr. Kingsley, if you would.

[Translation]

    Mr. Michel Guimond: Is there someone in your office who is monitoring the Quebec elections, for example?

    Mr. Jean-Pierre Kingsley: We extend mutual invitations to each other and we always decide to send people who are likely to learn from the new procedures being implemented by another Chief Electoral Officer. That is my approach. So we do have people who will be going to Quebec soon, as well as to Ontario, for the elections. I sometimes go myself, insofar as possible.

[English]

    The Chair: Next is Joe Jordan and then Dick Proctor.

    Mr. Joe Jordan (Leeds—Grenville, Lib.): Thank you, Mr. Chair.

    Through you to Mr. Kingsley, I have a couple of comments and then a question. The minister was before us at the last meeting on this discussion of public versus private money in the electoral process. The figure we have been given is that currently about 60% of the money in the system is public money. Is that a figure you've heard and that you have an opinion on? Is that an accurate figure?

    Mr. Jean-Pierre Kingsley: It is a figure I've heard because I've been following the debate. I've also heard other figures in terms of what this will take us to. Frankly, I have no true idea of what it really is. I will tell you why. There are several reasons. One of them is that there are so many black holes, I don't know how much money in the system is private money. You mentioned trusts. When I found out that there were trusts of a quarter of a million dollars, my head snapped back. I wasn't even aware of that.

    Mr. Joe Jordan: The percentage is a derivative of the ratio without knowing the denominator. It's a moving target. But there is public money now. This bill isn't introducing a new concept. It's a matter of degree.

  (1240)  

    Mr. Jean-Pierre Kingsley: That's right.

    Mr. Joe Jordan: To pick up on something Mr. Proctor said about the changes to the bill in the sense that maybe it should be moved, I think it should go the other way. I think that for the $1,000 corporate we're going to put in place a system of policing that may cost us more than the money generated. If our intention is to get rid of that, maybe we should go to zero. I think the $10,000 is too high for the personal. Maybe that should go to $5,000. That may mitigate some of the pressure you're feeling.

    You mentioned the indexing of the per elector fee for what registered parties can spend. There are a couple of ways of approaching what we're trying to do here. One is to build a police force to try to keep track. The other is to take away the demand. We want to be careful. Again, I don't expect you necessarily to comment on this. I know we're including polling now, and maybe there's a justification for increasing what parties can spend. But it seems to me that one of the ways of getting to where we want to go is to limit what you can spend. I don't know where the 62¢ came from, which we're changing to 70¢. You're currently undertaking a number of initiatives that are requiring you to communicate with electors. I would be interested if at some point you could get back to me on whether new technologies make that cheaper. I am of the view that the limits in my riding are too high. I don't need to spend that much. It may force me to do things differently. It may force me to talk to individuals as opposed to buying expensive mass media. But that necessarily isn't a bad thing. It also reduces the barriers to entry, which is what I think we're trying to do here.

    So I'd be interested in your experiences, if you're not comfortable giving an opinion, on whether 70¢ a voter is an appropriate amount for parties. If we keep moving that target and the parties that are trying to get into this system can't raise that kind of money, then we haven't solved the problem. We may feel better, but at the end of the day I don't think we've changed it.

    I'll just give you my question. You have in the past called for increased investigative powers for your group. Proposed section 511 has to do with prosecution powers. Have you reviewed that? Are you comfortable that you are going to be able to do the kinds of things you think you may need to do given the scope and scale of this thing?

    Mr. Jean-Pierre Kingsley: Mr. Chairman, in answer to the second part of the question, I'd say that if the committee moves the amendment giving the commissioner the authority to obtain search warrants, the commissioner and I would be very happy that he would possess all the tools he needed. The danger in having to go to a police force is that sometimes the investigation can remain in police hands, and I frankly don't want to see this happen to parliamentarians.

    With respect to the 70¢--we're talking about the party thing--my view is that parties don't spend a lot in this country for a campaign. When one considers the breadth and scope of this country, when one considers that it amounts to $12 million or $13 million maximum per party, and I compare that around the world, I say we're doing okay; it's a good, straight measure.

    It could be reduced if we were to do what the Brits do, which is to say, no TV advertising. It's all paid for by the state, but it's all regulated by the state as well, and there's only so much you can put in. That would eliminate half the expenditures of the parties.

    On the other hand, it may not have that great an impact in terms of reimbursement either, because that would be approximately $6 million for parties that spend at the maximum. So even when you're eliminating that 50%, you're still winding up with something, but I'm not sure people want to move that far in this land.

    Mr. Joe Jordan: That's very helpful.

    The Chair: Dick Proctor.

    Mr. Dick Proctor: First of all, for you, Mr. Chair, lest there be any confusion about trade union and corporate donations to candidates, I favour the abolition of them in their entirety. Let me just ask three different questions, given the shortness of time.

    Some people, Mr. Kingsley, have been suggesting that a formula is in play here, the one whereby the results of the last election predicate how much money you receive from public funds for this election. To use the horse race analogy, we could say that instead of putting weights on the favoured horse, you're actually taking weight away from the favourite. The 1993 election campaign is the one that springs to mind.

    Some people have suggested a different formula, one based on membership, for example, and the specific question I have is, are you aware internationally--because it would have to be internationally--of any other jurisdiction that does it differently, that has public financing for this kind of thing in campaigns and does it differently from what is proposed here? That's number one.

    Second, on trust and things like huge expenses for nomination campaigns, do you not think this is a matter of “physician, heal thyself” and that in some cases political parties should take responsibility for it, as some political parties have already done, and either ban political trusts or place very strict limits on the amount of money that can be spent on a nomination campaign?

    Third, on third-party advertising, when he was here last week, Mr. Boudria, the minister, seemed to think that all would be well; we'd just have to wait for the next judgment from the courts on this. A lot of people say, look, if third-party advertising is going to get away from us here, then all of this stuff on political restrictions on where you can raise money for political parties means nothing.

    I'm just wondering, what is your opinion about the third-party advertising? I know there's nothing in the amendments to this bill about it, but it's assumed by those that have introduced the bill that this is all going to be taken care of in due course.

  (1245)  

    Mr. Jean-Pierre Kingsley: First of all, with respect to the formula, which is going to be an allocation based on the number of votes, there's a basic fairness related to that because people voted in favour of a party, and there's an extrapolation that any contribution they would make they would want to go to the party they sustained. Now what happens if they change their minds? If you allow all the people to change their minds, perhaps it works out to the same thing.

    I'm not aware of anyone who does it on the basis of memberships. I'll tell you one thing. If we did it on the basis of memberships, I'd see the memberships of all the parties represented in the House of Commons go up by 100%. And I'm not saying double; I'm saying multiplied by 100. People would try to get the membership numbers in there, because we need the $1.50 or whatever he's going to shove our way for each one. That's much harder to control, and I wouldn't want to be the CEO who has to try to control genuine memberships.

    Now, are there other formulae? I know the Germans have a basic approach where they give a certain sustaining grant, and there may be others.

    What I'd like to do is come back to the committee and provide you with an overview. We have it here, but rather than just peel it off now, I'll send you a copy of it. It's very easy to read.

    Is that acceptable to you, sir?

  (1250)  

    Mr. Dick Proctor: That's fine.

    Mr. Jean-Pierre Kingsley: Okay.

    With respect to trusts and nomination campaigns, in my view, if you do the work you said you were going to do with your code that is applicable to you and with this bill, I don't think you're going to need to do much with trusts. You will have found that they will have effectively disappeared as tools that allow rules to be circumvented. They're all public, and the moment they become public it will hurt.

    With respect to self-regulation on campaign limits for nomination contests, this has been attempted by different parties. Whenever I'm asked that question, whether or not something should be better off self-regulated by a party, if it's a matter relating to the trust of the people, the only difficulty that arises is, who's implementing these things within the party and what are the penalties if someone has stepped out of bounds? There's never an answer from any of the parties about those things. In order to satisfy the appetite of Canadians for equity, I think they'd like to see an independent body. If it's going to be covered in law, I'd like to see an independent body that has the right to go in and satisfy them that the rules were followed.

    With respect to third parties, the matter is tentatively before the courts, because application has been filed to obtain leave to appeal. We'll see what happens. I know one thing. The issue should come to a boil, hopefully before the next general election, and we'll have a clear idea then which way everything is going.

    The Chair: Jean-Pierre, thank you very much.

    I repeat that we would appreciate the additional information that Dick requested, and we'll be glad to circulate it.

    My short question has to do with the $1,000 limit and franchises. It may be something you can answer very quickly, but perhaps not, and if not, we'd be glad to get it in writing. The question arises about the $1,000 and the way a corporation is set up.

    Some of us have Giant Tigers, for example, in our ridings. They had a problem with taxation because they were set up in such a way that they were still a central corporation, as distinct from where the franchisees were really spun off, and they were treated as independent businesses.

    I wonder if you have any thoughts on that matter now or for later.

    Mr. Jean-Pierre Kingsley: I would ask James Sprague, with your permission, to attempt an answer on that one, sir.

    The Chair: By all means, James.

    Mr. James Sprague: It will be an attempt. You can appreciate that if income tax had trouble with it, we're not going to be able to deal with it adequately here. The bill attempts to address the issue of multiple donations by branches and subsidies of corporations by borrowing from the Income Tax Act the concept of control. The basic rule is, if a group of corporations are controlled by either the same group of people or by the same corporation, then they will be treated as one body, one corporation, for the purposes of the $1,000.

    Beyond that, I'm obviously not in a position to comment on the Giant Tiger situation.

    The Chair: So the answer is essentially that we'll follow the Income Tax Act, their definition of what is a business or a corporation.

    Mr. James Sprague: Essentially, yes. The Income Tax Act actually goes wider because they have more approaches on when something is considered to be a corporation. What they borrowed from the Income Tax Act was the concept of control. So the essential approach used by CCRA will be followed here.

    If you have two corporations that are controlled by the same corporation or controlled by the same body of people, they will be considered to be one corporation for the purposes of the $1,000 donation. There's a slightly different rule for trade unions, and there the approach will be that it's going to include all of their various branches and locals--and I forget the exact wording.

    The Chair: I appreciate that. It's obviously something we'll be looking at and something you've thought about, so we would appreciate any future information you could provide.

    If I could just give another, Giant Tiger was the one that came to my mind. The other is that it strikes me that certain types of realtors are--and maybe the word is “franchised”, but it probably isn't--organized differently from others, and in our ridings we've had problems with that. People come in and say “Well, I'm a small business. Why don't I get such and such?” Then when you inquire, they're not a small business.

    Do you understand what I mean?

    We would be grateful for your comments.

    Mr. Jean-Pierre Kingsley: We will address that, Mr. Chairman, by coming back to you in writing. You've given two examples and we might be able to include others, or at least a broad outline of how we approach them.

    The Chair: Thank you very much.

    Geoff.

    Mr. Geoff Regan: Mr. Chairman, Mr. Kingsley, I want to raise a question I expect to be asked this weekend when Mr. Cuzner and I intend the annual meeting of the Nova Scotia Liberal Party.

    As you know, in a number of provinces there are parties that are unified, that have an administration that provides services to both federal and provincial associations, and they're really a unified party in that province. I can tell you, one of the concerns I first had when I saw this bill was the notion that if the Halifax West federal Liberal association gave its annual levy to the Nova Scotia Liberal Party, there could be a problem because that party was engaged in providing services of a federal nature and their own funds were coming from corporate donations, contrary to this bill.

    How do you see us avoiding the situation where parties in Atlantic Canada or elsewhere have to split in two, which I think would be unduly cumbersome, because of this bill?

    Mr. Jean-Pierre Kingsley: James Sprague, please.

    Mr. James Sprague: There is not necessarily going to be a requirement for what you're calling unified parties to split. What there will be is a requirement for them to order their affairs in such a way that they can honour the rules that are going to be established in the bill.

    I'll just give you some examples without addressing any specific situation.

    If you have essentially a provincial organization, for example, that is sharing administrative services with a federal party, there are a number of ways they could do this. One of the ways is they could keep track of the expenses that are actually used by the federal party in that office. There should be a local registered agent appointed for the federal party, who would authorize that these expenses be incurred, and then the provincial party would bill the federal registered agent for the amount of goods they provided for that month, that year, etc., and then the federal registered agent would pay those amounts out of its funds.

  (1255)  

    Mr. Geoff Regan: Out of the federal party's funds?

    Mr. James Sprague: Out of the federal party's funds.

    Mr. Geoff Regan: So in other words, in the situation we have now whereby the provincial association or party requires the federal riding associations to make payments to it for the services of a federal nature in the province, that wouldn't be permitted?

    Mr. James Sprague: You'd have to adjust it, because what would be happening there is the provincial party would be essentially acting as a fundraiser, raising funds that are being transferred to the federal party.

    There are two ways they can do this. They could act as a fundraiser, which is not going to be too profitable because they would have to be an unincorporated association. They could only transfer $1,000 per year, it could only come from individuals--those kinds of restrictions.

    Mr. Geoff Regan: So you mean the provincial party could not raise money for the purpose of providing its own services to the federal organizations?

    Mr. James Sprague: I'm talking about the fundraising, not the services.

    If it raises funds for its own purposes, which then buy an office, and then it wants to sell some of those goods to the federal party, it can do that. That's not raising funds for the purposes of making a contribution. That's raising funds in order to buy goods for yourself, which you are now going to sell to the federal party, and all that has to be on a commercial basis.

    Mr. Geoff Regan: So they can't raise money on behalf of the federal party?

    Mr. James Sprague: That's right, but there is a way you can do it by having the federal party appoint an official in the local provincial party as a registered agent of the federal party. In that instance, it wouldn't be the provincial party raising the money for the feds; it would be the registered agent of the federal party.

    We can give you specific answers to specific situations, but the broad answer is, as I said earlier, that there are going to be methods by which arrangements like this can be accommodated. They simply require that people take care to ensure their accounting is proper, they appoint the proper agents, and their transactions reflect proper commercial value and not inflated values or something to get around the provisions of the act. But it is quite possible to continue the arrangements.

    Mr. Geoff Regan: So it will not be possible to have what's happened in the past, for example, which is that the provincial organization has effectively subsidized these activities because of the fact that, in some cases, it did not receive.... Some federal ridings don't have enough fundraising in the year to pay what is called their levy or, in other words, what the provincial organization has considered to be the federal share. They haven't been able to do that for quite a while, as I have seen.

    So that couldn't go on any more, but I'm concerned about the problems that could result from it. Would it lead to a situation where the national party would have to make a contribution to the provincial party for those services?

    Mr. James Sprague: So essentially you're postulating the situation where fundraising within the local unit for the federal grouping is so insignificant that the local agent or the federal party doesn't have that much cash on hand, yet the person is sitting in the provincial office and is still sending out letters, or whatever, using up the secretarial...etc. So when it comes to the real value of a certain amount of money, the federal local coffers can't cover it.

    Yes, in that instance, the local person or local organization is going to have to get an influx of money from the federal party, or they're going to have to reduce the amount of resources they're consuming at the local level.

    The Chair: I'm going to have to cut this very interesting conversation off.

    But, James, I think you've put yourself in the position of perhaps receiving a list of inquiries from these particular associations, where they can put their particular problems and points to you. It would be very useful if you could respond.

    Colleagues, I want to thank Jean-Pierre Kingsley and his colleagues for taking this time with us today. You can see that there's a great deal of interest. We're just beginning this process.

    Our next meeting is at 5:30 p.m. tomorrow, here in this room. It's the in camera meeting on the ethics package. On today's topic, our next meeting is televised at the regular time on Thursday, when we continue these hearings.

    The meeting is adjourned.