Thank you very much, Chair.
To members of the committee, thank you for this opportunity to present to you today on Bill . As mentioned, I am co-founder and coordinator of Democracy Watch and chair of the Money in Politics Coalition, which is made up of 50 organizations with a total membership of 3.5 million Canadians.
The coalition has been advocating changes to the federal and provincial political finance systems now since 1999, and is calling for changes to Bill to stop cash for access and the influence of big money in federal politics.
The bill, I believe, based on the framework, in that it addresses contributions in some sections and others, can be amended by the committee and sent back to the House, and should be, to make changes to ensure that wealthy individuals cannot use money as a means of unethical influence over politicians or parties, and also to stop the funnelling of donations, which has happened in every jurisdiction in Canada that has banned corporate or union donations but that has maintained much too high a donation limit, such as at the federal level.
The $3,100 a year to a party and its riding associations is much more than an average voter can afford. That amount violates the fundamental democratic principle of one person, one vote. It allows people with money, who can afford to make that maximum donation, to use money as a means of influence.
To think that anyone who is donating the maximum does not get some kind of return on that is naive, based on what we've seen in the past across Canada with various fundraising scandals. Even if it is simply an invitation to a Laurier Club event, that is access that you can only buy, and is therefore undemocratic and fundamentally unethical.
Sports referees can't take gifts from players, so why are politicians continuing to allow themselves, as the referees of what is in the public interest, to essentially be influenced by large gifts of money, property, or services, up to $3,100 annually, in terms of what can be given to a party or a riding association?
The coalition and the more than 11,000 voters who have signed the petition on change.org are calling for changes that will stop big money in federal politics and stop cash for access. These are to lower the donation limit to $100, as in Quebec; strengthen enforcement and penalties for violations; and only bring back per-vote funding or some kind of matching public funding such as Quebec has if the parties can actually prove, and candidates can actually prove, that they need this public financing in order to prosper financially.
These are the major changes that we are calling for.
As well, loans should be limited to the same amount as donations. If donations are limited but loans are unlimited, then federally regulated financial institutions can use loans to essentially buy influence with the parties. Yes, they have to give those loans on the same terms as they loan to anyone else, but giving a loan to a candidate or a party helps the candidate or party.
Clinical psychologists have tested thousands of people across the world, and found in every case that even small gifts have influence on decision-making. One of the best-documented areas is with doctors and prescriptions, even with doctors receiving free samples from drug companies that they don't use themselves but can pass on to their patients. It doesn't save the doctor any money at all, but just giving free samples to doctors has been shown through clinical testing to influence their prescribing decisions, although the doctors deny it across the board.
To think that donations do not have an influence over any politician or party official is to pretend they are not human. Humans across the world have been tested by clinical psychologists in double-blind studies, and it's been found that even small gifts influence everybody.
That's why the solution, the way to stop the influence, is to limit the donation that can be given annually to an amount that an average voter across the country can afford, and that's $100. That's what Quebec has done. It's a world-leading system. The public financing is too high. It doesn't have to be as high as it is. In terms of the donation limit, the fact that a donation above $50 has to be routed through Elections Quebec ensures that funnelling cannot happen and that people are only giving their own money and only giving no more than an average voter can afford.
The too-high donation limit federally also facilitates funnelling, which has been seen at the federal level with SNC-Lavalin. In Quebec, finally Elections Quebec did its job in 2011 and looked back five years and did an audit of donations. It had banned corporate and union donations in the late seventies and there had always been rumours that corporations were funnelling donations through their executives and their family members and through employees and their family members. Elections Quebec finally did an audit in 2011 after the corruption scandal broke there, and they found $12.8 million in donations that had likely been funnelled from businesses through their executives and family members. That was $12.8 million over a five-year period.
Funnelling is happening at the federal level. Elections Canada promised to do an audit four years ago. It hasn't done it yet. If they do, they will find it. It's been found in Toronto and it's been found in every jurisdiction that's banned corporate and union donations but left a donation limit that is too high and that facilitates funnelling, as the federal donation limit does. With the $3,100 limit, you get 10 executives and their spouses to each give $3,100, and boom, you've given $62,000 to a party.
That's big money. That has big influence, and the only way to stop it is to lower the donation limit.
Democracy Watch has filed complaints about the fundraising events held last year and in years past with the Commissioner of Lobbying. We're hoping that the Commissioner of Lobbying at least will stop lobbyists who are registered or should be registered from participating in such events, but Bill , despite making the events transparent, is not going to stop cash for access. MPs will still be allowed to do the events. The staff of cabinet ministers can be at events without it even being disclosed under Bill C-50, so there's not even transparency about a senior government official being at an event, only people who are candidates or party leaders or cabinet ministers. The bill will not stop cash for access. It will not stop the influence of big money.
There is a problem with big money. I will give you just one example of an analysis that Democracy Watch did. It was very difficult to do because of the way Elections Canada discloses the donations, but I did a ton of number-crunching and I determined that in 2015 the federal Liberals received almost 23% of their donations from just over 4% of wealthy donors, who gave $1,100 or more to the party. To do that analysis of what happens at the riding association level is not impossible, but it would take months and months, because Elections Canada doesn't consolidate any of those figures. That's just donations to the party: 23% of the party's money came in from donations from just 4% of wealthy individuals who could afford to give $1,100 or more. That's a cash-for-access system. Those people at the time would have been invited to a Laurier Club event, possibly other events. I'm quite sure if the Access to Information Act were to be extended to ministers' officers, we would find that they get their calls returned more quickly than others, get meetings more quickly than others, get access to staff and senior government officials more quickly than others across the board. We don't have the kind of transparency that would prove that. I hope we will get it through Bill , as the Liberals promised to extend the act to ministers' offices, or through the changes to the Lobbying Act, which has to be reviewed this year.
Within the framework of Bill , I believe it's completely within order under the parliamentary rules for you to make these changes to Bill C-50, because the bill mentions contributions and all the other areas I've talked about.
I have not made a written submission to you today, but there is a news release up today on Democracy Watch's website that will be translated and distributed by the clerk, so you will have all the details.
I welcome any of your questions. Thank you very much.
I favour Democracy Watch's position and the coalition's position, which is that the matching funding that Quebec has is a better way to go. The matching funding should be higher in Quebec and the per-vote funding lower. Per-vote funding is fine as long as it's just a base amount that's being given. It's proportional, so it makes it more fair for the parties that don't win as many seats as they should based on the percentage of votes they receive, and that's an important thing.
One of the biggest public subsidies to the parties is that our first-past-the-post system gives some parties more seats than they deserve. Each one of those politicians who's elected gets $450,000 in public money each year. That's a huge public subsidy. The per-vote subsidy at least is democratic because it's based on votes that are received, the actual percentage of votes the party receives, so if a party doesn't get as many seats as it should based on percentage of votes, at least it gets that money.
Matching funding is better, though, because it would go up and down each year based on how much the party raised. You can also do it for candidates, but you can't do the per-vote funding for candidates. It would be unfair to anyone challenging an incumbent.
Quebec has both. It could also be on a sliding scale, as in Quebec. Quebec has a higher amount of matching funding for the first $100,000 that you raise, or $10,000 that you raise as a candidate, and that helps level the playing field as well. Someone may have a lot of donors who can only afford to donate $50 in Quebec; let's say that person has 1,000 donors, so they only raise $50,000, but the first $10,000 is matched at a 2:1 ratio, so they get another $20,000. If someone has 1,000 donors but they each can afford to give $100, they could raise $100,000, but the matching makes it a bit more even because the one ends up with $70,000 and the proportion isn't as much out of whack.
That's why I favour matching funding, it goes up and down each year as well for the parties. If the party breaks all its promises and loses a ton of support, it won't get the matching funding.
Under the Lobbyists' Code of Conduct—it used to be rule 8 and now it's rules 6 to 10—someone who should be registered but is illegally avoiding registration is not allowed to organize a fundraising event. This would hold even in cases of an unregistered lobbyist being on the board of a business or an organization, and we hope this standard will continue to be upheld by the lobbying commission.
We have received complaints about the Apotex chairman regarding the Morneau event that occurred in November 2016, and also about the event he held at his house in August 2015 for a Liberal candidate and Justin Trudeau, before Mr. Trudeau became Prime Minister. We've also received a complaint about another board member associated with a company called Clearwater Seafoods who held an event in August 2014 for the Liberals. We don't know exactly where the lobbying commissioner is going to draw the line. We hope, however, she's going to say that if you're on a board or in any way affiliated with an organization lobbying the government, even if you're not the registered lobbyist, you cannot help with an event or do anything significant for anyone who is being lobbied by the company. We'll see. Hopefully, that line is drawn.
If you're not a registered lobbyist or affiliated with anyone but you want to have influence within the party, if the lobbying commissioner doesn't uphold a strict standard, even lobbyists who are not registered in the lobbyist registry could become board members of companies that lobby the government and be allowed to participate in these events. I'm sure this is going on. As a lobbyist, if you can get 20 people in the room who are each going to give $3,100 to the party at that event, you are going to get your calls answered. You're a bundler, you're valuable to the party, and from that cash you will get access.
I will have more news on this topic very soon. It will be related to something that I think occurred last year, when bundlers were given a huge favour and access based on the fact that they were bundlers.
Thanks for being here. This is a related topic, but one I would love to have your comments and thoughts on.
You mentioned your ideas about the changes that you would like to see made to donation limits and things like that. There's already some concern out there about third parties working with, or allegedly working with, political parties to oppose another political party or a particular candidate, and things like that.
I wonder if lowering those limits might increase that sort of activity. Even since the election, we've seen organizations that are working with political parties or things like that. One example that comes to mind is the news reports from July about this organization called the Council of Canadian Innovators, which was set up in November 2015, right after the Liberal government was elected. In fact, I think it was a week after the government was sworn in that it was set up.
It has four full-time staffers currently, as of July, three of whom were former Liberal staffers. One was a former EA to the , another had been the Minister of Foreign Affairs' campaign manager, and their director of communications had been a spokesperson for Ontario Liberal cabinet ministers. In their fundraising letter that was sent out, they indicated that they would offer monthly meetings with the chief of staff to the in return for a $10,000 donation. That was one of the rewards you received.
Since then, apparently the minister's office felt that was something they wanted to correct. Actually, the chief of staff hadn't met with them monthly; he had only met with them three times since October 2016 up until July of this year. They said they needed to correct that so that it only indicates regular meetings rather than monthly meetings, which I'm not really sure solves any kind of problem that exists.
I want to hear your thoughts on this idea of organizations connected with a political party using those connections to fundraise for their organization and advocate for things that would align with the government or that particular political party.
Would you see that as another version of cash for access? I certainly would say it appears to me as something unethical and sleazy. Would you agree with that characterization? If so, what would you suggest be done to try to prevent those kinds of things from occurring?
Democracy Watch filed complaints with the federal Ethics Commissioner and the Commissioner of Lobbying about the Council of Canadian Innovators' appeal to its members, and also its lobbying activities overall.
They're registered to lobby 's department. They haven't lobbied her directly. Our position is that rule 6 of the Lobbyists' Code of Conduct means that if you are lobbying one of her staff or senior officials, you're lobbying her, because they're going to report what you said to her.
We filed a complaint saying that they are not allowed to do that. They can't be, because a co-manager of 's 2015 campaign is the executive director of the Council of Canadian Innovators.
If the Commissioner of Lobbying allows that, then that's what every lobbyist who might have helped a party or a candidate during the 2015 election will start doing: they won't lobby the person they worked for, they'll lobby their staff. That would just make the Lobbyists' Code of Conduct a huge loophole. It would be meaningless.
We're hoping the Commissioner of Lobbying will make the right ruling, which is that you can't lobby a minister indirectly and say you're not lobbying the person you worked for and helped get elected. Yes, you are. Why would you lobby the senior official if they're not going to tell the minister what you said?
On the Ethics Commissioner side, the Ethics Commissioner has sent back a ruling to us. We're questioning her, because she didn't even look at some of the facts of the situation and the issue of whether preferential treatment is being given.
You had also asked us about third parties. Generally Democracy Watch and the coalition's position is—and this is what the government is apparently looking at for another bill—that third parties should be limited in their spending for a longer period than just the election period campaign. B.C. has just limited it to 60 days before the writ is dropped, so it's essentially 90 to 100 days before election day. That's appropriate. B.C. is also—
I will need only five or six minutes for my opening remarks. The first part will be in French.
The second part will be in English. I will switch only once, except for question period, obviously, if there is one.
I always begin my remarks by saying what a privilege it is to appear before you. You represent the Canadian people, and it has always been a tremendous honour for me to serve Canadians through members of Parliament.
I believe this is the committee's 72nd meeting, Mr. Chair, and I would venture to say that I am the person who has appeared before this committee the most since 1990. I may be mistaken, but it may be worth checking.
This bill concerns two important elements. I think that any bill amending the Canada Elections Act, by its very nature, is significant since it is separate from any other piece of legislation.
My comments are based on my understanding, in other words, my interpretation, of the bill. When I would prepare for a meeting like this, I would always keep in mind the important involvement of my staff and all the work they did leading up to my appearance before the committee. Today, I am here alone, so I will be raising questions rather than providing answers or feedback.
I took note of some of the comments that were made in the media, the minister's opening remarks, and the statements of the acting Chief Electoral Officer. I also noted the document of so-called technical amendments the acting Chief Electoral Officer had submitted as an attachment. I was surprised to learn that such consultation had not taken place prior to the document being submitted.
In the past, during most of my tenure as Chief Electoral Officer, I would be given a copy of the bill so that similar technical amendments could be considered beforehand, even though the committee might not agree with them going forward. Nevertheless, there was some initial awareness.
Money in politics is the toughest topic in the world concerning democracy—not only in elections, but concerning democracy. Canada's system, as was mentioned by the minister, is effectively second to none. The reputation is there. However, most unfortunately, the number of followers is few and far between. It is the toughest topic.
Canada has succeeded over the last 15 or 20 years in coming out with a regime that, in my mind, is exemplary. Therefore, the changes that are contemplated must always weigh the value of the change versus how it would impact on the Charter of Rights, the right to be a candidate, the right to contribute, freedom of speech, and freedom of association. It is against that background that I always make my comments before you.
I will be commenting more with respect to the first aspect of the bill. It deals with the timely, or more timely, reporting on fundraising events. I was wondering why would this not occur during an election period. Why is this an exception? If there is a time when people really need to know who is contributing, it is during the election period. We don't have this reporting now. This bill would prevent that from happening at this critical moment in the existence of a democracy.
Why is there an exclusion for individuals from reporting? Why are 18-year-olds not reportable as attendees or contributors? Under the present law, the name of a Canadian who is under 18 years of age appears if the person makes a contribution. There is no exception by age. There is an exception if you're not a Canadian, obviously, and if you're not a Canadian, you can attend but you cannot contribute.
Part of the reasoning of the bill is to make it known who is attending as well as who is contributing, so I don't think that excluding them automatically is necessarily a good idea.
I would also make a comment about the staff of the person organizing it. There are staff members in the Canadian political system who are exceedingly important, and their attendance at an event carries weight unto itself. So the automatic exclusion of those persons from being named, I think, turns us away from the purpose of the statute.
What I'm really saying is that we should be following the rules concerning donations from those under 18 years of age. You can have a six-year-old making a contribution in Canada. There was this debate at one time, because there was an exception for a family making contributions which effectively made the family exceed the limit but not the individuals. I was asked at the time whether there should be a law against this, and I said no, because we have to be careful about how much we put into the statute or the regulation, and we have to let people come to their own conclusion if they find out that a six-year-old contributed.
As I read the bill, there are persons or entities who would be organizing events beyond the existing ones under the Canada Elections Act. These are all the different agents of parties and local riding associations. I'm asking the question quite honestly: Who would these people be? They would be people who support either the party or a particular candidate or an existing member of Parliament. If this is to occur then it has to occur with the knowledge beforehand of that public office holder—I did not see that in the bill, although maybe it is in there—and not after the fact, with a person having organized something for us—thank God—and having done half the organization and spent half the money. We cannot have that. We must follow the rules about who can spend monies under the Canada Elections Act.
What it raised in my mind was a question of whether there is a tie-in lacking about third parties here, someone out there, an entity. What is an entity beyond the entities under the statute? If it's an individual, is that person effectively engaging in what we would call a third-party activity? Is any advertising taking place before the other entities come in? There are anti-collusion measures under the statute. I don't know if this ties in to the third-party regime, but one also considers, as we saw, that foreign monies can get into third parties under the present statute. I thought I would raise this as a concern. It may not be valid in terms of what the bill says, but it lit a light.
The $1,000 penalty for a summary conviction, I found to be low. The entities that would be charged are entities—parties, etc.— that effectively have money or should pay more for that. I don't think there's anything left that's a penalty of $1,000 under the statute. I think we got rid of that in the 1990s and maybe early 2000s, so I was surprised when I saw that. I said we're certainly not talking about a deterrent. The deterrent of course is the summary conviction, but still there should be a penalty. I know that the monies will be forfeited that were gathered at a wrongfully held or a wrongfully reported event, but still I found it odd that it was so low as a penalty.
What this bill raises with me, by the way—I was alluding to this in my earlier remarks—is the whole issue of the timeliness of reporting contributions. Of course, there are expenditures here, but reporting contributions.... There are regimes in different parts of the world where the reporting has to be quasi-automatic. Within 24 hours, the candidate and the party have to report, and it's published on websites so that people know who's contributing as the event is unfolding.
I will admit that the limit of $1,550 right now is a very reasonable one and should not lead one to suspect that an individual is trying to do something wrong by contributing that. There are relationships that are made when firms, or partners of firms, or people working with the same organizations, all participate in an event. This bill will help us to understand those better, so that's good.
With respect to the definition aspect—and this is going to be my last comment—and the separate reporting for leadership and nomination contests, this is the way the statute has been interpreted, and I suspect that putting that in the bill is meant for greater certainty.
Those were my introductory remarks, Mr. Chairman.
Thank you very much.
That's actually an interesting suggestion. The minister has invited us to come back to her with suggested amendments, and perhaps the double number might be one we'd put in there, so thank you for that.
You talk about the importance of a deterrent actually having a deterrent effect. Politics being what it is, money that is available to me prior to the writ is more valuable than money that I have to pay back in some form of penalty after the writ, for reasons that are obvious. I can't spend money I don't have. When it's a fundraiser taking place now, a couple of years before a writ, presumably if we are in some respect non-compliant, if it's a fundraiser for me and I'm present, and I'm the leader of a party, and all those things that are required, and then it turns out that we've been in violation of the statute, we'd pay back a penalty that, as you suggest, is double the amount. That's presumably the process.
That's assuming the process is not very slow and that it all occurs between now and writ 2019. However, for an event in the election writ period, it would be a different story. There are other transgressions that occur during writ periods. There must be some other way of dealing with them. I'd be interested in your thoughts on how to deal with that.
I want to start off, if I can, following up on what Mr. Reid said, which I thought was a very poignant point, about how it means a lot more to him as a candidate, and therefore to all of us, to get the money sooner rather than later.
I hate to do this to you, but maybe I'll just take advantage of it being my birthday, and you'll allow me a little latitude.
I want to tell you a joke. It actually belongs—to give attribution—to Bud Wildman, who, as any of you would know, was a former Ontario cabinet minister with a huge personality, an amazing guy.
He tells this story—I'll do the accent but I can't do it justice; he did a much better job—about Huey Long back in, I think, the 1920s or 1930s, give or take a couple of decades. He was a governor, and ethics wasn't exactly his long suit. The story goes, or at least the joke goes, that Huey was meeting with a whole lot of his big contributors and he said to them, basically, you can give me a lotta money right now and get a nice big piece of the pie, or you can give me the money a little closer to the election and get a smaller piece of the pie, or you can give me the money after the election and get good government. I like that joke. I've always liked that joke.
I can't do it justice, Bud, but there you are; you live in infamy through your jokes.
You're the second one to raise this issue of not just ministers and decision-makers but also their staff being there. As a former Ontario cabinet minister, I can tell you that the influence of the chief of staff and the senior policy people you mentioned is huge.
Most ministers are not experts in every area that they're making decisions on, and they rely on advice: professional advice, technical advice, and political advice. At the end of the day, often the last meeting you have is with your own personal staff as you're making a final determination. I just wonder if there were any other titles or anything else that you want to expand on, because the question has come up before—and it's a legitimate issue, I think—as to whether t you can have effective lobbying by only meeting with the minister.
I would say, in terms of the impact of meeting directly with the minister versus with the staffer, that you might even get more attention out of the staffer, because most politicians are thinking 16 different things at once, especially if they're at an event and looking here and there, whereas the staffer tends to be more focused. I think it's a really important area that's being overlooked, and any further expansion of your thoughts would be helpful, sir.
Thank you for being here.
I don't know if you've been following any of the other meetings that we've held on this topic. In questioning, my colleague Mr. Nater discovered a couple of things that would be considered fairly large loopholes—ones you could drive a bus through, essentially. I just want to run the two scenarios by you and get your thoughts on them, as well as—if the committee feels it appropriate to try to find ways to amend the legislation to fix those lapses—how we might approach those. You'd be able to provide some advice on that, I'm sure.
The two scenarios he identified were as follows. The first is in relation to the notice period. It's a five-day period, but this loophole was identified. Let's say the was going to be attending a function and didn't seem to know he would be there until maybe an hour or two beforehand, and that change was suddenly made. That takes away that notice to the public, but it would still comply with the law because after the five-day period it could be amended without any real consequence, I guess. What could we do about that?
The other scenario is this idea of the $200 limit. What would stop the from attending an event where the ticket price was $199 and then later on, at the event, everyone who attended just happened to give another $1,351, so they ended up giving the maximum contribution? They were not required to do that to attend the event, but they all somehow just happened to do it.
I suppose there is a possibility you could actually mix those two things, and it would be even more of a loophole.
I want to hear your thoughts on whether you see those things being problematic, and if we were looking to try to fix those loopholes, what we would do to fix them.