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Standing Committee on Procedure and House Affairs
Tuesday, October 3, 2017
[Recorded by Electronic Apparatus]
Welcome to the 71st meeting of the Standing Committee on Procedure and House Affairs. This is a public meeting.
Today we are continuing our study of Bill C-50, An Act to Amend the Canada Elections Act (political financing).
The two witnesses are from Elections Canada: Stéphane Perrault, acting Chief Electoral Officer, and Ms. Anne Lawson, general counsel and senior director, legal services. Thank you for being here.
I will now give the floor to Mr. Perrault so he can give his presentation.
I'm happy to be here today to speak to Bill C-50. I will try to keep my remarks brief to leave as much time as possible for questions from the members.
Bill C-50 has two main elements, both related to political financing. The first element is a new regime for reporting on certain fundraising events. The second element is more technical and relates to correcting a long-standing problem regarding the regulation of leadership and nomination campaign expenses and contributions. I will speak to each aspect in my remarks, but will focus primarily on the first component of Bill C-50.
I have also distributed a table containing a few technical amendments for the committee's consideration for the better administration of the proposed provisions in this bill.
The first element in Bill C-50 is a new regime for reporting on regulated fundraising events. The requirements for disclosing information and reporting apply only to certain fundraisers. To fall within the scope of the bill, a fundraiser will need to have all of the following three elements. First, it must be organized for the benefit of a party represented in the House of Commons or one of its affiliated political entities. Second, the fundraiser must be attended by a leader, a leadership contestant, or a cabinet minister. Third, it must be attended by at least one person who has contributed over $200 or who has paid an amount of over $200, part of which includes a contribution, as a condition for attending the fundraiser event.
In this regard, I note that the bill offers a calibrated approach. Not all parties will be subject to the new requirements and I believe that is a good thing. Similarly, the rules will not apply to all fundraising activities, but only those for which a minimum amount is charged to attend and where key decision-makers are also present.
There is also an important exception for party conventions, including leadership conventions, except where a fundraising activity takes place within the convention. The convention itself is exempted, but if there's a fundraiser that meets all the conditions within the convention, then that is caught by the new rules. Again, this reflects a concern to achieve a proper balance and I think it is wise.
However, I note that donor appreciation events held at party conventions will be exempted from the proposed rules. I understand that this reflects a concern with regard to the fluidity of attendance at such events and practical difficulties in applying the rules. This is something that the committee may wish to examine.
In order to improve transparency, Bill C-50 provides for two types of disclosure to be made with respect to regulated fundraising events. First, a notice of such events must be prominently posted on a party’s website at least five days prior to the event. Second, a report must be provided by the party. Even if the fundraiser is made for the benefit of affiliated entities, it is the party that must provide the report to the Chief Electoral Officer within 30 days of the fundraiser. This report must include details of the fundraiser, including the names and partial addresses of attendees, and the names of any organizers of the event. There are some exceptions to protect the privacy of people working at the event or underage persons who may be attending.
These disclosures would vary during a general election. Notice of a regulated fundraising event would not be required and a single report for all fundraising events held during a general election would be due to the CEO within 60 days after polling day. In practice, this may prove to be a tight timeline. There are clauses for extensions, but I think that we’ll see over time whether that 60-day period is a good balance.
Generally speaking, the bill increases the transparency of political fundraising, which is one of the main goals of the Canada Elections Act. It does so without imposing an unnecessary burden on the smaller parties that are not represented in the House of Commons or for fundraising events that do not involve key decision-makers.
That said, I am proposing a number of minor and technical amendments to improve the administration of Bill C-50.
First, as parties are required to publish notices on their website of fundraisers covered by Bill C-50, I would propose that parties be required to also notify Elections Canada of such a publication. This will assist Elections Canada in administering the Act and in ensuring that the reports to be submitted 30 days later are indeed submitted.
Second, so that the bill more closely mirrors current authorities in the Canada Elections Act for other reports, I am recommending that the CEO be permitted to request, in writing, substantive corrections and revisions to reports submitted after a regulated fundraising event.
Consideration should also be given to adding an offence for filing a false, misleading, or incomplete report so as to bring this bill in with other components of the existing regime for financial returns.
I will now turn briefly to the second element of Bill C-50, which deals with the definitions of leadership and nomination campaign expenses in the Canada Elections Act.
This aspect of the bill responds to a recommendation made by Elections Canada and recently unanimously endorsed by this committee. The purpose of this change is to ensure that all expenses and contributions made in relation to leadership and nomination contests are regulated.
Not surprisingly, Elections Canada supports these proposed changes. The current definitions are not aligned with the goals of the act and are difficult for both nomination and leadership contestants to understand and comply with.
There is, however, an amendment that is contained in our table of amendments and that I would recommend be made to this part of the bill. It is essentially meant to ensure that only expenses and contributions in relation to leadership and nomination campaigns are captured by the new definitions and by the rules on expenses and contributions.
I would say, respectfully, that there was an unintended broadening of the definition and that the wording of the definition needs to be clarified.
That is all I have to say. Thank you.
I would of course be pleased to answer any questions the committee members may have.
Mr. Bittle, you have seven minutes.
Thank you for being here today.
Could you describe for us our current political financing regime and how it's regarded worldwide?
Certainly I would hope that if there was a regime for administrative monetary penalties, this regime would apply to these kinds of rules, because these are exactly the types of rules that AMPs, as we call them, are best suited to assist in ensuring compliance.
C-50, would that option, the option to buy 10 tickets for $500, trigger the new regime, assuming a designated politician was in attendance?
C-50 contains a number of exemptions to the reporting requirements, predominantly for those who are executing the fundraising event. However, it's not clear if a personal support worker for an attendee would also be exempted if they attended in the course of their employment. Would you support an exemption for people like a personal support worker who may be present at the fundraiser in support of someone who has paid to attend, so in terms of an accessibility piece?
I just want to come back to my first answer, because I may have misled the committee. I'm thankful for—
Some hon. members: Oh, oh!
Thank you, Mr. Chair.
I want to follow up on that last point. Multiple tables can be sold for $500, but as long as the requirement was $50 per ticket, it would not trigger the reporting premise. The prime minister could attend a $50-ticket event and multiple people could buy $500 tables, but it would not trigger the requirements then?
I want to follow up on one of your recommendations, and that is the notification to Elections Canada, as well as being published on a website. It's more of a comment, but I think that is a worthwhile suggestion. It makes sense that if Elections Canada is going to be regulating this there should be some notification requirement.
I want to follow up a little more on the five-day notification on a party's website. I brought this up when the minister was here last week. I'm thinking of a situation in which a long-standing event has been planned, tickets are over $200, but no individual who would trigger reporting requirements—the prime minister, a minister—is initially attending, and then, within that five-day period, whether it's two days in advance or one day in advance, a guest is added, and it could be the prime minister or a minister, within that short period of time.
How would you envision the act applying in that case? What would be the advertising requirements? How would that work, in your opinion?
Again, I think that would shift the purpose of the bill. I'm not saying this is a good or a bad thing, but the purpose of the bill is to aim only at the situation where there's a prior condition of making a certain contribution for attending.
There's a provision for failure to report. At some point, if it's so patently false, it may amount to a failure to report, but we get into shades of grey. I think other provisions in the act dealing with other kinds of financial reports make that distinction. First, there's an obligation to file, with an associated penalty if you don't file. Second, there's a separate obligation for the timeline. That's a recommendation that's in the table, to separate the obligation to file from the timeline. Third, there is a prohibition on providing false or misleading information.
I think it is preferable to separate all three, from a compliance and enforcement point of view. But in this case, only the first two are in the bill, actually. There is nothing about false and misleading information in this bill.
Mr. Christopherson, you have the floor.
Thank you very much for being here again. We do this so often, it's almost beginning to feel like family.
My apologies to the committee for being late. I have public accounts back to back during this sitting. I was in another building, so physically it was impossible for me to get here, but I'll do my best going forward.
I want to pick up where Mr. Nater was asking questions, because I thought that was an interesting line of thinking.
I probably need some edification on your part. I noticed that you're being very narrow, and I assume that's because this is a very narrow application. The idea is that if you know ahead of time that the minister of finance is going to be there, that's a draw card for you and you're going to pony up the money. This is meant to capture that so there is some kind of accountability.
However, Mr. Nater raised a very interesting scenario. There is no guest that is published, but there is a wink-wink, nod-nod that it would be worth your while to come by. Then they show up and lo and behold, coincidentally everybody there makes a maximum contribution. This is all Mr. Nater's thinking. I'm not taking credit for any of his thinking, but I'm chasing it down a bit.
What is to prevent that from happening? My understanding is that at that point, because it wasn't privileged access in any way, it would just be the usual reporting mechanism. It wouldn't be reported as an event that would normally come under the rubric of this subject.
I will leave that with you. Help me out.
The way you were aligning it was more of a situation where everybody knows that in fact the minister is going to be there but it's not laid out explicitly. That's a deceitful scenario. In that case, I would think that the party would be under the obligation to be truthful about that and make the disclosure, make the announcement in a transparent way.
That's a different scenario from an event where everybody is invited, whether or not they pay—and that's the second scenario that I think Mr. Nater was referring to—and they happen to meet a minister or a leader and they make a contribution. In that case, anybody is invited to be there and it's not an issue of privileged access.
I'm not sure exactly which scenario you were dealing with.
What is not captured by—
What is not captured by this bill is when there is no prior condition to attend in terms of paying. That is a deliberate policy choice, because that defines the nature of this legislation.
All right, let me ask this question. Were you consulted on the development of Bill C-50?
On privileged access—this subject matter—are you aware of how this regime would compare to any other existing regimes in terms of its effectiveness?
The Ontario regime is much stricter. Whether or not that's a desirable thing I think is for the committee to consider. In the Ontario example, there's an outright prohibition on attendance. My understanding is that's for any candidate, member of Parliament, or a leader. That is very sweeping. Even independent candidates are prohibited from attending any fundraiser where there's an entry price, and there are no thresholds. It's sweeping in its scope, and it's quite restrictive in the nature of the fundraisers.
I understand there's a bill being considered, Bill 152, to exempt party conventions, which were not exempted. Any time you have party conventions and they have contributions, then party leaders are not allowed to attend. I think Mr. Essensa can better inform the committee on the problems that this causes.
That's why I think when I made my remarks, I said that this bill is carefully calibrated. I think it's based on some experience in the Ontario context.
In terms of that comparison, are there any international comparisons?
Chair, how much time do I have? It can't be much.
Thank you, Chair.
If a leadership race is finished—for example, we saw one finish yesterday or two days ago—but a candidate still has debt, that defeated candidate who is having the event is still technically a leadership candidate. Is he captured in this even though his leadership race is over?
If there is a fundraiser that meets the three conditions, then it would be captured if it's organized for the benefit of an affiliated political entity, and a leadership contestant is one of them. It would be caught by the proposed rules, on the assumption that this bill were enforced, of course, in your scenario.
This is just an edge case, because I've been doing a lot of edge cases. Just for the sake of argument, let's say I'm having a fundraiser in my riding, and an opposition leader happens to live in my riding, as was the case until two days ago, and he happened to show up at my event. Would that be captured? That is somebody who meets the requirements, but he isn't in my party.
You mentioned that you would like us to revisit the exemptions for a convention. Do you want to go into any more depth on that? What would you like to see us discuss?
I also don't know if in practice it may be difficult to distinguish between a donor appreciation event and a fundraiser. If somebody wanting to take part in a donor appreciation event that is held every year at the annual party convention makes a large contribution, say, the full maximum amount, a week prior to the convention, is that a donor appreciation event or is that a condition, a payment, to attend a meeting?
I'm assuming good faith here, of course, but there may be situations where it's not perfectly clear how to distinguish one from the other. I think the committee, with the experience of its members, would be better positioned to look into that and see whether the lines are drawn at the right place.
You had suggested a number of amendments. Do you want to expand further on any of these amendments to provide clarity? At some point we have to actually turn these into amendment drafts, which aren't phrased like this.
You could start with Mr. Graham.
The second is in a situation where organizers who are not the party come to realize that the information they provided to the party is not accurate; it's missing names of attendees, for example. There is currently no obligation on them to inform the party of any change so that the party can make the corresponding change to the report. This amendment would ensure that anybody who is involved in the organization who becomes aware of any change in the information to be provided in the report passes on the information to the party, and that the party then makes the correction to the report.
We'll go now to Mr. Richards.
I have two questions. The first relates to one of the two glaring loopholes that Mr. Nater has identified. The first loophole he identified clearly is the minimum five days' notice. For example, it's not advertised that the prime minister is going to be attending until maybe they make an amendment two hours before the event or something. The other one, of course, is this idea that there's no ticket price, but you show up and of course everybody is expected to give the $1,550 maximum donation. Now the prime minister can attend an event for which there isn't a $1,500 ticket price, but there is, if you know what I mean. You've already indicated to us that this would certainly be possible under this legislation.
The first of those glaring loopholes is the one I want to ask about.
Should the committee feel that it's appropriate to make an amendment so that it would be absolutely required—whether it's five days or whatever the minimum notice we would determine would be reasonable—that following that time you couldn't, for example, add the attendance of the prime minister or some other minister two hours prior to the event? How would the committee go about making that amendment?
The second scenario is somewhat different. This is a scenario where any ordinary Canadian, whether they have money or not, can attend; however, at that event some will make contributions, and in some cases, significant contributions. Now, whether or not that's a concern goes to the whole issue of contribution limits, but this is not a matter dealing with restricted access to key decision-makers. In that scenario anybody could have access to those decision-makers.
It's less a loophole than an issue definition problem, whereas the first one falls within the scope of this bill and perhaps could be corrected.
Having said that, I recognize that I don't think there's a way to change that. I think that's just there. It will probably exist, but it shows why this legislation won't fix the problem. I don't think it can be amended. I think the first problem could be. You've identified how that might be possible, and I appreciate your doing that.
Let me ask you about the one amendment. It's more to try to understand it because I'm not sure. I'm reading the analysis on your sheet. It's the one about the leadership and nomination contest expenses. I'm trying to understand what you're trying to accomplish with it. When I read the analysis it indicates that it's talking about registered parties and candidates as different from nomination or leadership contestants. It's talking about one entity spending money to promote another so they can get around the expenses.
What I'm understanding there is, it's almost sounding as if this would be intended to deal with where a party or a registered candidate was promoting a nomination contestant or a leadership contestant, which I find a fairly unlikely scenario. Is that what you're trying to deal with, or am I misunderstanding this?
This is not a nomination contest expense. The only one that's relevant here is the expense incurred to promote the nomination contestant.
We would not read it that way. The definition was just borrowed from other provisions of the act. For clarity's sake, we would interpret this narrowly. I would recommend that we remove references to irrelevant entities.
A leadership campaign expense is a campaign expense that was incurred in relation to the leadership contest, not some other entity or event. Similarly for a nomination contest....
Now we'll go to Ms. Tassi for five minutes.
Thank you again for your presence here today.
Getting back to the previous comment that you made with your second recommendation, is there some timing you would suggest with respect to that notice coming to Elections Canada?
I'm pleased to hear you say that you refer to the purpose of this legislation, which relates to privileged access. We know this is the driving force behind it. You believe it's carefully calibrated. Do you think this legislation fulfills the purpose it was intended for?
From my point of view, this is a bill that relates to political financing activities, but not as they impact on the fairness of the electoral process. They are not about the level playing field. They are not about fairness of the electoral process. They are about concerns over perceptions of privileged access to decision-makers.
This is somewhat outside the general scope of the Elections Act. It's caught here because these concerns arise in the context of fundraising events, so it's quite proper that it be in there, but from my point of view, as an administrator concerned with electoral fairness, it improves somewhat transparency. It is calibrated, and I can administer this, although I have some minor improvements that could be made.
From a conflict of interest or ethics point of view, this is something more for other witnesses to speak to.
Is there anyone there who you think should be exempted who doesn't currently appear on that list? PSW is perhaps one that you considered. Is there anyone to whom you would automatically extend that list?
The other thing is about the parties that are not captured. It is important in the act to strive to calibrate the regime to the realities of different parties. In the recommendations we made to this committee, and to Parliament, we have tried to reduce, for example, the number of mandatory audits for small campaigns.
A one-size-fits-all approach to all campaigns and all parties is not always appropriate or warranted, and this is a good example. Parties that are not represented in the House of Commons, even though they may well be one day, at this point probably should be exempted from these rules.
Mr. Reid, for five minutes.
I want to clarify the $200 limit, because there are two ways of slicing this. It's only a penny difference, but I want to ask. If I contribute $200, does that have to be reported or is it required to be $200.01 in order to get reported? We keep on talking about over $200, so the question is, is the dividing line $200 or is it—
I got the other point you made. That was a good point to make. I appreciate that. But it's helpful for us all, I think, to understand that the division is between $200 and $200.01.
I wanted to make an editorial comment, if I could. You're welcome to comment or not comment on my comment, but this is meant for the benefit of everybody else on the committee, and for the minister, if she's listening.
In its zeal to be all-inclusive, the government has dealt with the problem that actually was the problem we had here. Chinese billionaires are buying tickets to get access to the Prime Minister of the country. That was the issue: cash for access to people who have direct executive power. Those dinners are now covered by this legislation. So, too, are those dinners covered for opposition leaders who are contestants for the leadership of a party, both parties in and out of power. Had the law gone into effect a little earlier, Jagmeet Singh would have been covered, for example, and the other contestants for the NDP leadership, as well as people who are contestants for nominations.
I will just state the obvious. In the scenario I gave in which you are running for the nomination for one of the parties in the riding of Lanark—Frontenac—Kingston, an event you hold is now covered. The chances that a Chinese billionaire is going to buy a ticket seem unlikely. What I'm wondering about are where we're mostly likely to see non-compliance, where people are contestants for nominations, unless I've misunderstood something. Is this not likely going to result in a lot of technical non-compliance with a law where there's no actual problem in any meaningful sense? Are we not simply creating a large administrative burden for the agency and for people who are local volunteers, enthusiasts, partisan supporters, without the requisite expertise to always understand what the law requires of them?
We'll go to Ms. Sahota.
I'm going to ask a more general question. You were saying that we currently have one of the more strict regimes in the world when it comes to fundraising goals. Do you think that this piece of legislation adequately addresses some of the holes we may have had in our fundraising rules? Do you think we need it to go further and be more strict?
There's a lot of talk about people just showing up at fundraisers and wanting to give all this money and saying, “Here, take it”, even though it's not a requirement for getting in. This is not my experience. When I throw a fundraiser, even if it is $200, I'm usually chasing people around for months afterwards. Sometimes there are a few who it's a year later before they get their cheques in. My experience has been, whether there's a minister there or not, you have to chase people around for a long time. People are not just willingly giving money. It's tough, and it's a part of the political reality that you have to fundraise. It's not my favourite part of this job, but in order to succeed and carry on serving people, it's a reality we all have to face.
Do you think this piece of legislation takes that into account and reaches a balance, or do you think we perhaps should have gone as far as Ontario's legislation? If we do make the rules that strict, could we have a whole bunch of other unintended consequences, where people are finding other means of doing things that perhaps create other problems?
This bill is really about fundraising activities that raise a concern or create a perception of privilege and access. It's a bit remote from the main goals of the Elections Act, in terms of a level playing field and the fairness of the electoral process. I understand why it's in the Elections Act, because it takes place in the context of fundraising activities, but how far you want to go is really a policy question for members of this committee.
What I would say is that you have to be careful not to over-regulate unintentionally. This bill is carefully drafted. It avoids some of the traps we've seen elsewhere, such as catching a party convention that was not intended to be caught. It's for members of this committee to look at the policy and see whether it should go further. From my point of view, this is not a bill about the fairness of the electoral process. I would say only that it increases transparency, that it's calibrated, and that I can administer this piece of legislation, with some improvements. I think that's the limit of my words on the matter.
I know I'm going towards a policy question. Ontario changed its fundraising rules recently. This came up in our last meeting. I was interested in knowing your opinion on whether that was a good road to go down. Maybe you can't even answer that, but we were discussing whether there are events you could still have where only a certain list of people get invited. It could be donors who have already donated $1,500, $300, or some other amount. Then you have events where the invitee list is made up only of people who have previously contributed a certain amount. The entry price would not be listed, because you don't have to pay to come to this particular event, but you're only invited to it if you've already donated a certain amount in that calendar year or whatever. Is that something that would still be seen as problematic? Do you think the Ontario legislation solves the problem of not having cash-for-access events, as people have been putting it?
I'm a little disappointed we didn't get a chance to hear the other three recommendations—
Going back to the first recommendation on the five days, we've had some discussion about it, but another aspect of this is you don't plan a fundraiser in five days. If you do, it's going to fail. There is lots of preparation. As one way to solve this, in addition to letting you know directly, wouldn't it make sense to give a little more time?
I don't know how far you can go in commenting on this, because I know you are very careful about the technical interpretation and not getting into the “our” politics of it, so I respect if you can't go where I would hope you do. But by extending it for more than five days, you then give everybody an opportunity to actually see it. To make it five days and say that we're doing this so it is transparent, and we're even putting in the legislation, in the regulations, that it has to be prominent—whatever that might mean—on the website.... But with five days, you'd pretty much have to have somebody whose daily duty it is to monitor from a political point of view. You would have to do the same sort of thing.
Wouldn't one answer to this be to just make that time frame longer, a little more realistic? This looks like they want to be able to say, “Look, we have a new provision”, but in reality it doesn't change anything in the real world.
What are your thoughts on that?.
Some hon. members: Agreed.
The Chair: Mr. Perrault.
We have covered the first two, and I am down at the third one with respect to the new provision, 384.5. This is something I did address in my opening remarks. There may be situations where there is a missing element in the report and the CEO should have the authority to request formally a change to the report to be made. This is something that exists for all the other reports that are in the Canada Elections Act, I believe, and does not exist for this one. It's a very technical amendment.
The next one is regarding offences—and again we spoke to that one—for filing a false and misleading.... There is a requirement to file within a certain timeline, but there is no separate offence for filing a false or misleading return either by way of negligence or deliberately. This is something that exists again for other provisions to the act dealing with reports, and I believe there should be one here as well.
The next one is again on the timeline of reporting. It combines the obligation to file currently in the bill with the obligation to file in a specific timeline, and if you look at the other provisions of the act on filing, it separates the two. There is an obligation that each and every one of you had as a candidate to file a report, and then there is a separate obligation to file that report within a separate timeline. So, if you do file but you happen to file late, then that is addressed specifically. By combining the two, it may be a bit more difficult in terms of enforcement.
Again, this is a great example. The point was raised that if we have administrative monetary penalties, then that should be the way to deal with it, but we should separate the obligation to file from the timing obligation.
The last one is the one we discussed regarding the definition of leadership and nomination campaign expenses, which if you look at the language of the clauses in the bill, carry with them references to parties, promotion of parties and candidates and other entities that have nothing to do with nomination contests or leadership contests, and I would recommend this be made cleaner. Certainly, I would interpret those provisions as referring specifically to expenses in relation to the nomination contest or the leadership contest, as the case may be, and not these other expenses.
Thank you very much, witnesses, for coming today. This has been very helpful and I'm sure we'll see you again.
Could the committee members just stay for a minute. We have one housekeeping thing to do in camera
[Proceedings continue in camera]