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37th PARLIAMENT, 2nd SESSION

Standing Committee on Procedure and House Affairs

EVIDENCE

CONTENTS

Wednesday, April 30, 2003

1735

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

1740

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

The Chair

Mr. Jacques Saada

The Chair

Mr. Jacques Saada

The Chair

Mr. Jacques Saada

The Chair

Mr. Stan Keyes (Hamilton West)

1745

The Chair

Mr. Rick Borotsik (Brandon—Souris, PC)

The Chair

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

The Chair

The Clerk of the Committee

The Chair

Mr. Rick Borotsik

The Chair

Ms. Lorraine Godin (Chief Agent, Bloc Québécois)

1750

The Chair

Mr. Paul Hellyer (Party Leader, Canadian Action Party)

1755

1800

The Chair

Mr. Paul Hellyer

The Chair

Mr. Thomas Jarmyn (Past national counsellor, Canadian Alliance)

The Chair

Mr. Jerry Rice (Secretary, Canadian Alliance)

The Chair

Mr. Jerry Rice

1805

The Chair

Mr. Jerry Rice

The Chair

Mr. Miguel Figueroa (Party Leader, Communist Party of Canada)

1810

The Chair

Mr. Julian West (Organizing Chair, The Green Party of Canada)

1815

1820

The Chair

Mr. Ted White (North Vancouver, Canadian Alliance)

Mr. Miguel Figueroa

Mr. Ted White

1825

Mr. Julian West

Mr. Ted White

The Chair

Mr. Geoff Regan (Halifax West, Lib.)

Ms. Lorraine Godin

Mr. Geoff Regan

Ms. Lorraine Godin

The Chair

Ms. Lorraine Godin

Mr. Geoff Regan

The Chair

Mr. Thomas Jarmyn

1830

The Chair

Mr. Geoff Regan

Mr. Paul Hellyer

The Chair

Mr. Michel Gauthier (Roberval, BQ)

Ms. Lorraine Godin

The Chair

Mr. Jerry Rice

The Chair

Mr. Michel Gauthier

1835

Ms. Lorraine Godin

The Chair

Mr. Paul Hellyer

The Chair

Mr. Jacques Saada

Ms. Lorraine Godin

Mr. Jacques Saada

Ms. Lorraine Godin

Mr. Jacques Saada

1840

Mr. Paul Hellyer

The Chair

Mr. Julian West

The Chair

Mr. Jacques Saada

Ms. Lorraine Godin

Mr. Jacques Saada

Ms. Lorraine Godin

Mr. Jacques Saada

Ms. Lorraine Godin

The Chair

Mr. Dick Proctor (Palliser, NDP)

Ms. Lorraine Godin

Mr. Dick Proctor

1845

Ms. Lorraine Godin

Mr. Dick Proctor

Mr. Paul Hellyer

Mr. Dick Proctor

Mr. Paul Hellyer

Mr. Dick Proctor

Mr. Paul Hellyer

Mr. Dick Proctor

1850

Mr. Paul Hellyer

The Chair

Mr. Rick Borotsik

Ms. Lorraine Godin

Mr. Rick Borotsik

Mr. Paul Hellyer

Mr. Rick Borotsik

Mr. Paul Hellyer

Mr. Rick Borotsik

Mr. Paul Hellyer

Mr. Rick Borotsik

Mr. Paul Hellyer

Mr. Rick Borotsik

Mr. Paul Hellyer

1855

Mr. Rick Borotsik

Mr. Paul Hellyer

Mr. Rick Borotsik

Mr. Paul Hellyer

Mr. Rick Borotsik

Mr. Jerry Rice

Mr. Thomas Jarmyn

Mr. Rick Borotsik

Mr. Thomas Jarmyn

Mr. Rick Borotsik

Mr. Thomas Jarmyn

Mr. Rick Borotsik

The Chair

Mr. Rick Borotsik

The Chair

Mr. Rodger Cuzner (Bras d'Or—Cape Breton, Lib.)

The Chair

Mr. Rodger Cuzner

Mr. Paul Hellyer

Mr. Rodger Cuzner

Mr. Thomas Jarmyn

The Chair

Mr. Ted White

1900

Mr. Jerry Rice

Mr. Ted White

Mr. Jerry Rice

Mr. Ted White

Mr. Jerry Rice

Mr. Ted White

The Chair

Mr. Michel Guimond

1905

Mr. Paul Hellyer

The Chair

Mr. Miguel Figueroa

The Chair

Mr. Julian West

The Chair

Mr. Dick Proctor

1910

Mr. Julian West

Mr. Dick Proctor

Mr. Julian West

The Chair

Mr. Terrance Mercer (National Director, Liberal Party of Canada)

1925

The Chair

Mr. Hugô St-Onge (Chief Agent, Marijuana Party)

1930

1935

The Chair

Ms. Anna Di Carlo (Secretary, Marxist-Leninist Party of Canada)

1940

The Chair

Ms. Anna Di Carlo

The Chair

Ms. Anna Di Carlo

The Chair

Ms. Anna Di Carlo

The Chair

Mr. Chris Watson (Federal Secretary, New Democratic Party)

1945

The Chair

Mr. Eric Hébert (Assistant Federal Secretary, New Democratic Party)

1950

The Chair

Mr. Gilles Lavoie (Party Leader, National Alternative Party of Canada)

1955

The Chair

Mr. Gilles Lavoie

The Chair

Mr. Irving Gerstein (Chair, PC Canada Fund, Progressive Conservative Party of Canada)

2000

2005

The Chair

Mr. Ted White

Mr. Terrance Mercer

2010

The Chair

Ms. Anna Di Carlo

The Chair

Mr. Ted White

The Chair

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

The Chair

Ms. Anna Di Carlo

The Chair

Ms. Anna Di Carlo

2015

The Chair

Mr. Irving Gerstein

The Chair

Mr. Terrance Mercer

The Chair

Mr. Michel Guimond

Mr. Gilles Lavoie

Mr. Michel Guimond

Mr. Gilles Lavoie

Mr. Michel Guimond

Mr. Gilles Lavoie

Mr. Michel Guimond

2020

Mr. Gilles Lavoie

Mr. Michel Guimond

Mr. Gilles Lavoie

The Chair

Mr. Michel Guimond

The Chair

Mr. Michel Guimond

Mr. Gilles Lavoie

The Chair

Mr. Gilles Lavoie

Mr. Michel Guimond

Mr. Gilles Lavoie

Mr. Michel Guimond

Mr. Gilles Lavoie

Mr. Michel Guimond

The Chair

Mr. Edward Goldenberg (Senior Policy Advisor, Office of the Prime Minister, Liberal Party of Canada)

2025

The Chair

Mr. Jacques Saada

The Chair

Mr. Paul Lepsoe (Legal Advisor, Progressive Conservative Party of Canada)

Mr. Jacques Saada

Mr. Paul Lepsoe

Mr. Jacques Saada

The Chair

Mr. Paul Lepsoe

The Chair

Mr. Terrance Mercer

The Chair

2030

Mr. Chris Watson

The Chair

Mr. Jacques Saada

The Chair

Mr. Jacques Saada

The Chair

Mr. Jacques Saada

The Chair

Mr. Eric Hébert

The Chair

Mr. Dick Proctor

The Chair

Mr. Dick Proctor

Mr. Chris Watson

Mr. Dick Proctor

The Chair

Mr. Irving Gerstein

The Chair

Mr. Dick Proctor

Mr. Chris Watson

Eric Hébert

2035

Mr. Dick Proctor

Mr. Terrance Mercer

The Chair

Mr. Geoff Regan

Mr. Irving Gerstein

Mr. Geoff Regan

Mr. Irving Gerstein

Mr. Geoff Regan

Mr. Irving Gerstein

Mr. Geoff Regan

Mr. Irving Gerstein

Mr. Geoff Regan

The Chair

Mr. Chris Watson

2040

The Chair

Mr. Edward Goldenberg

The Chair

Mr. Gilles Lavoie

The Chair

Mr. Geoff Regan

The Chair

Mr. Rick Borotsik

Mr. Terrance Mercer

Mr. Rick Borotsik

Mr. Terrance Mercer

Mr. Rick Borotsik

2045

Mr. Terrance Mercer

Mr. Rick Borotsik

The Chair

Mr. Rick Borotsik

Mr. Paul Lepsoe

The Chair

Mr. Paul Lepsoe

2050

The Chair

Mr. Paul Lepsoe

The Chair

Mr. Paul Lepsoe

The Chair

Mr. Paul Lepsoe

The Chair

Mr. Rodger Cuzner

2055

Mr. Paul Lepsoe

The Chair

Mr. Chris Watson

Mr. Edward Goldenberg

Mr. Rodger Cuzner

Mr. Terrance Mercer

Mr. Chris Watson

Mr. Paul Lepsoe

Mr. Rodger Cuzner

Mr. Paul Lepsoe

The Chair

Mr. Gilles Lavoie

Mr. Paul Lepsoe

The Chair

Mr. Ted White

2100

Ms. Anna Di Carlo

Mr. Ted White

Ms. Anna Di Carlo

Mr. Ted White

The Chair

CANADA

Standing Committee on Procedure and House Affairs

NUMBER 036

2nd SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, April 30, 2003

[Recorded by Electronic Apparatus]

» (1735)

[English]

The Chair (Mr. Peter Adams (Peterborough, Lib.)): Colleagues, if we could 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).

Before we begin, and I hope our witnesses will excuse me, I draw the members' attention first of all to a draft work plan. It's calendared for May 2003. Do you have it?

Colleagues, I'm not going to discuss this now, but first of all I want to say that the item on Monday, May 5, is wrongly located. It is not suggested we have a round table for MPs on Monday, May 5. Such an event might happen on Wednesday, May 7, or Wednesday, May 14. But I would like to suggest that those of you who are here who are substituting for someone else could take this back and convey it to the regular members of the committee. At the end of tomorrow's meeting—our next meeting is 11 o'clock tomorrow—we will have a short discussion of this sheet, if that's okay with you.

With regard to tomorrow, our main witnesses are the Canadian Labour Congress and the Canadian Council of Chief Executives. You should know that two of our proposed witnesses have now withdrawn. Also, despite what I said the last time, the Canadian Labour Congress, which like some of the others is an umbrella organization, would very much like to bring with it one or more of its affiliates. It's going to be the main presenter, but it would like one or more to be there.

My suggestion, since two groups have dropped out and we simply can't replace them at this point, is that they be allowed to do that, but we make it clear that it is the CLC that is the presenter. And if they want to bring forward some other presenters, I think that's fine. We will be doing that for tomorrow, and at the end of tomorrow's meeting we'll have a short session discussing how we proceed from there.

You should know that the following people.... It gives you some sense of what's going on. The Canadian Federation of Independent Business does not want to appear but they have submitted a written brief. And we encourage, and I mention this now to the witnesses who are here, written briefs. The Canadian Association of Broadcasters has declined. The Canadian Bankers Association has declined and the Canadian Chamber of Commerce has declined. These were people who were submitted by the parties we have contacted and they have formally declined. So has the Institute for Research on Public Policy, but they recommended Professor Bakvis. You'll recall Professor Bakvis did not show the other day at one of our meetings. I want to say this to you all because we are doing our very best to go through the list of witnesses as well as we can.

For this evening, the Natural Law Party declined and the Ontario Party of Canada declined. Also the Canadian Action Party, which is on your agenda for today, said that they would try to send someone, but as far as I can tell have not appeared here yet.

I'm repeating this now to you publicly and on the record so that you do know who's coming and why some people are not coming.

Jacques Saada.

» (1740)

[Translation]

Mr. Jacques Saada (Brossard—La Prairie, Lib.): Mr. Chairman, I just want to make sure that I understood you correctly. If there are other names to suggest, what would be the best time to do so?

[English]

The Chair: I'm sorry, Jacques, I missed the first part of what you said.

[Translation]

Mr. Jacques Saada: When you have witnesses to suggest that do not appear on the preliminary list, and you would like to have them added, when would be the proper time to submit their names?

[English]

The Chair: I would say first of all the steering committee agreed on the list we have, but members of committees are entitled to submit names, if you wish. I would urge you, if you have some names, to get them to me. I will, for example, at tomorrow's meeting, when we're discussing the schedule, raise that and see what other members of the committee think.

Is that okay?

[Translation]

Mr. Jacques Saada: Yes, but I would like to clarify something. The names that I would like to suggest are not in contradiction with the steering committee. I do not have the list in front of me, but we were supposed to invite representatives from all the political parties, and I expected that the elected presidents of political parties who wished to do so would be able to make a presentation. However, that does not seem to be the case. I would have hoped to see added, more specifically, the list of political party presidents who wished to appear before us.

[English]

The Chair: I'll explain again how the witnesses for this evening, including those before us now and those behind who will be appearing before us after seven o'clock, were selected.

We went through the list of registered political parties. We contacted in each case the leader of those parties. We did that in writing. I have a copy of the letter here.

By the way, this procedure of contacting the leaders was discussed at the steering committee. I've described it on the record. It was agreed then that it was the appropriate way to go because we have a range of parties before us. Some of them are very large. Some of them are much smaller. It seemed appropriate--and this is on the record of this committee--that we contact the leaders.

We wrote to the leaders. I have a draft. The one I have here happens to be the one to the PCs. We wrote to the Right Honourable Joe Clark. We described that we were conducting hearings into Bill C-24. We invited him, as party leader, or his delegates to contact us. We did that with every party.

The names we have received as a result of that are the names you see before you today.

[Translation]

Mr. Jacques Saada: If I may, I would just like to finish. I find the process that has been followed absolutely irreproachable. I have no problem with the process, but I think that when you have elected bodies within a political party whose function is to manage the internal operations of the party—and we are talking about financing, we are talking about internal operations of the party— it would be logical, in addition to what you have done, and you have done it well, to also have the possibility of inviting the presidents, who are the highest-ranking elected representatives, the first to be elected by the membership of the political party.

[English]

The Chair: Stan Keyes, briefly on this point, and then I'm going to carry on.

Mr. Stan Keyes (Hamilton West): Thank you, Mr. Chairman.

I've been following the committee's activities with great interest. Given that the impact of what is being discussed here could have or will have ramifications on the fundraising abilities of the parties specifically, I have no quarrel with your invitation to the leaders of the parties to attend. It was made very clear.

My interest, as my colleague Mr. Saada has mentioned, is since it's the parties that will also be affected, the request be made that not the political leaders of the party but the administrative leaders, elected representatives, leaders, presidents of the parties also be invited to attend these hearings in order to give us their impressions of the legislation.

» (1745)

The Chair: Michel Guimond, briefly on the same point.

Mr. Rick Borotsik (Brandon—Souris, PC): We can deal this with at the meeting coming on, Mr. Chairman. We have the witnesses.

The Chair: I understand.

Colleagues, I'm in the hands of the committee to a certain point. I think it is appropriate, as long as colleagues are brief.

Michel Guimond.

[Translation]

Mr. Michel Guimond (Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ): Mr. Chairman, I am satisfied with the way in which you have handled the invitations to political parties. I do not have the same concerns as Mr. Saada.

I am however concerned with the unions. I had suggested inviting the Fédération des travailleurs et travailleuses du Québec, the FTQ, and the Confédération des syndicats nationaux, the CSN, and I think that you did not talk about them.

Did our clerk get in touch with those unions? If so, what was their response?

[English]

The Chair: I know we've contacted them.

Thomas, where are we with that invitation?

The Clerk of the Committee: We're still trying to get them for next week if we can.

The Chair: Rick Borotsik.

I am very conscious of the fact that we have witnesses here.

Mr. Rick Borotsik: So am I. That's why I would simply say that I would like to carry on this conversation tomorrow, Mr. Chairman, at our meeting. We have some people who have cancelled. We can probably come up with 15 minutes. Let's not waste the time of these people who have come here. Let's hear the witnesses.

There are a number of suggestions we should have. I think that suggestion is wonderful. I think that the parties with only five minutes is deplorable. I think we have to talk about that. Let's get on with the witnesses.

The Chair: Witnesses, thank you all for your patience.

I think you've been advised that we're going to proceed with short presentations from each of you, five or six minutes. We will go in the order in which you appear on the agenda, which in fact is alphabetical order. After the five or six minutes from each of you, there will be questions from both sides. The exchanges will also be five or six minutes each. We proceed, as we do normally on this committee, from side to side of the table. And would you introduce yourselves when you begin.

I will start with the representative of the Bloc Québécois, Lorraine Godin, who is the chief agent. Lorraine.

[Translation]

Ms. Lorraine Godin (Chief Agent, Bloc Québécois): Good afternoon to all the members of the committee. We would like to thank the committee for inviting us to express our opinion or to testify on Bill C-24.

First of all, I would like to say that the Bloc Québécois supports the current bill on political party financing. Indeed, the Bloc is pleased with the important steps taken with respect to individual financing and believes that this bill, imperfect as it may be, will help democratize the financing of federal political parties. As you all know, for several years, there has been talk of the problems that the government has in terms of transparency or relations with all the stakeholders, businesses or other entities, in Canada. Therefore, we feel that cleaning up the financial practices of political parties will help regain the public confidence in governments and politicians.

Since its inception, the Bloc Québécois has been asking the federal government to pass legislation similar to the one in Quebec. We have always asked that only individuals, that is, theoretically, people who are eligible to vote, should be able to finance political parties, in order to avoid interference by corporations.

As I said earlier, we have, in Quebec, legislation that was passed in 1997 by the government of René Lévesque. We celebrated its 25th anniversary in 2002. A study was carried out after 25 years to assess the results of the implementation of this law. And let me tell you that the results were so conclusive that the Chief Electoral Officer of Quebec said that only a few minor corrections should be made to this legislation to make it as effective as possible. Furthermore, he believes that this legislation is very effective. That is why we are in favour of it.

Nevertheless, we are in disagreement with certain aspects of this bill as it is currently proposed. Firstly, we would have liked and we would still like for this bill to be designed in such a way as to allow only individuals to make a contribution to a political party, as is the case in Quebec currently.

The current bill allows for contributions by legal entities, unions or others, up to $1,000 per year, per political party. Moreover, given the way in which the bill is drafted, we believe that the $1,000 limit, as well as the limit for nomination candidates, leadership candidates and riding associations make observing the $1,000 ceiling within a year an extremely complicated game, as all those entities would still be able to receive a contribution from the same corporation. We feel that this would create a heavy administrative burden for a mere $1,000 corporate contribution, and we think that the ideal situation would be that contributions from individuals be the only ones allowed.

We have a second reservation with respect to this bill. We think that a $5,000 ceiling per individual would be sufficient. The study on the 25 years of existence of the Loi électorale du Québec reveals that there is... In the Quebec electoral legislation, the ceiling is set at $3,000 a year per individual. Further to a study, we came to realize that year after year, 1.2% of individuals make donations between $2,000 and $3,000. Overall, 82% of donations are $200 or less.

» (1750)

In our view, a $10,000 ceiling is overkill, because that would allow some rich individuals to make donations more than anything else, while the average individual would never be able to afford such donations. Therefore, we feel that a $5,000 ceiling would be adequate.

We also have a problem with the inclusion in this bill of the whole procedure to nominate candidates for political parties. We feel that these are internal housekeeping matters. It is up to a political party to choose its candidates in the way it sees fit and to organize nomination races in the way it wants to, if it wishes to do so. Regulating party nominations is overkill in our view, given the generally low costs involved in such races.

Finally, we would have wanted to include in this bill a provision whereby the appointment of returning officers is made by the Chief Electoral Officer. I know that this is essentially about financial reform, but since we're talking about reforming the Canada Elections Act, we would have liked to see included at the same time the notion of returning officers being appointed by the Chief Electoral Officer.

That, in a nutshell, is our position. There are certain points on which we are in disagreement and which, I suppose, we could discuss a little longer, but that is in a nutshell the position of our party.

The Chair: Lorraine, thank you very much.

Colleagues, let me remind you that we're also hearing from Grégoire Bérubé, of the Bloc Québécois; Mr. Bérubé is Director General.

Welcome, Grégoire.

[English]

The next presenter is Paul Hellyer, who is the party leader of the Canadian Action Party.

Colleagues, I believe you have in both official languages a draft of what Paul Hellyer has to say.

Paul, you're very welcome here, and we're in your hands.

Mr. Paul Hellyer (Party Leader, Canadian Action Party): Thank you very much, Mr. Chair.

Members of the Standing Committee on Procedure and House Affairs, thank you for the opportunity allowing me to present some views with respect to Bill C-24.

Let me say at the outset that I totally agree with the principle of this bill. In my opinion, it is one of the most important measures to come before the House in a long time.

It is quite incorrect to say, as spokesmen from some major parties have been saying in the Globe and Mail and elsewhere, that transparency and accountability are all that is required. If only that were true; but it is not. Big money talks, and with a very loud and all-pervasive voice.

I would go so far as to say that what we have in Canada and the United States today is not really democracy, if you define democracy as government of, by, and for the people. It is rule by elite groups who pick candidates for office and then provide them with the large amounts of money required to be elected.

Having said that, I would not put an absolute ban on corporate and union donations. Instead, I would suggest a reasonable limit of $2,000 or $3,000—certainly not more than $5,000—to any party or its riding associations or candidates in any year.

The same limit should apply to individuals. It doesn't make sense to have a $10,000 limit for individuals and zero for corporations and unions. It isn't fair, and the opportunity for abuse is real.

If corporations and unions were allowed to make modest contributions, the annual payments from the treasury could be reduced from $1.50 to $1. This would not only save taxpayers a lot of money; it would be good discipline for those parties that spend far too much money at present.

The method of distributing it on the basis of the number of votes received in the last election is undemocratic and too highly favourable to the governing party. Each taxpayer should have the right to indicate on their income tax form which party they want to support for the next fiscal year. The total pie would then be divided on the basis of the percentage of votes cast for each party each year. This would provide a strong incentive for governments to listen to their electors between elections, because if they didn't it would cost them money.

At the same time, taxpayers should have the right to choose among all registered parties and not just those that received 2% of the votes cast nationally or 5% of votes in the ridings where they run candidates. To impose this rule is rank discrimination and establishes two classes of voters, which again in my opinion is undemocratic.

I'll make some other points. There should be special rules for candidates for party leadership. The limit should be $1,000 or $2,000 maximum from any corporation, union, or person. This amount should be excluded from the yearly quotas for political donations.

Then the big slush-fund loophole should be firmly plugged. There may be some rare cases where slush funds might be required for legitimate purposes. It should be illegal, however, to raise funds for or donate funds to any person in public office or a leadership candidate, or for any such person to accept donations, unless the purpose of the fund, the amount being solicited, and the rationale have been submitted to the Commons ethics commissioner and approved by him or her, followed by the issuance of a certificate of acceptability.

Finally, and I think this is relevant to the overall question, all paid television commercials on behalf of political parties should be banned during election campaigns. This would not only save millions of dollars; it would eliminate the perverse effects of negative advertising campaigns, a highly deplorable practice imported from our friends south of the border. Instead, all television outlets should be required to provide limited amounts of free air time on the basis of a formula that, while still favourable to the established parties, is not as heavily loaded in their favour as the existing formula.

» (1755)

In conclusion, Bill C-24 is sound in principle, but in practice it is far too favourable to the governing party and major opposition parties. With significant amendments, however, and quite a bit of fine-tuning, it could become a landmark law for the restoration of a more egalitarian form of democracy.

Thank you, Mr. Chairman.

¼ (1800)

The Chair: Paul, thank you very much. You're always welcome on Parliament Hill. It's a privilege to have you here.

Mr. Paul Hellyer: Thank you.

The Chair: I'd like to say to these witnesses and to those who are waiting that the committee welcomes written contributions of any sort. We also welcome references to published material that you have, be it on websites or wherever it is. We would be most grateful for any information you can provide.

The next witnesses, for the Canadian Alliance, are Jerry Rice, who is the secretary, and Thomas Jarmyn.

Thomas, I'm not sure what your position is.

Mr. Thomas Jarmyn (Past national counsellor, Canadian Alliance): It's immediate past national councillor.

The Chair: Jerry, I think we're in your hands.

Mr. Jerry Rice (Secretary, Canadian Alliance): Thank you, Mr. Chair, and thank you to the committee for hearing me here today.

I'm going to speak to you on this act from the perspective of a political volunteer. Politics is a hobby of mine. I receive no salary for any of my political activities. I've been an official agent three times; I'm currently the party secretary; I'm a national councillor from Newfoundland; and I sit on the all-party committee with Elections Canada.

This act is going to have serious implications for volunteers just like me. I'm more involved than most, but the nuts and bolts of it is I'm just a volunteer. It's going to have an impact on how I do what I have to do and whether I'm willing to do what I have to do. That's what I have the greatest concern about.

All our political parties rely on volunteers; they're what makes it work. If we take the fun out of it, or if they have burdens placed on them that scare them or worry them in any way, shape, or form, they're going to be less likely to do it. This is what I have a great deal of concern with.

It's the practical application of the new act on electoral district associations that I'm most concerned with. At that level we have people very much like myself with a variety of skills. I'm a licensed practical nurse; that's what I do. I'm not an accountant; I'm not a lawyer. I'm a licensed practical nurse. Yet if I were the financial agent and this legislation dropped right in my lap, I would be expected to interpret it and have to operate within it. Many of our associations will call this person or that one; they will get the advice they need. But it's a burden: they have to find that advice—and get the right advice at the right time—when they need it, in order to be able to operate within this act.

As I said, I sit on the all-party committee with Elections Canada. Elections Canada did a survey about a year ago with Léger Marketing on simplifying the role of official agents in campaigns. They are really trying to simplify that role. Much of that advice will carry over to the financial agent for parties for registered electoral district associations, and also to financial agents for candidates—or “nomination contestants”, as they are referred to in the bill.

But with the volume of information that has to be reported, you can only simplify it so much. There isn't a huge difference from a practical point of view, for the person doing it, between a $5,000 campaign and a $65,000 campaign. There's still a lot of work that has to be done in between—even though you're talking about significantly different amounts of money—for the volunteer who has to sit down at the dining room table and go through this stuff, wondering in the back of their head if Jean-Pierre Kingsley is going to put them in jail. We know that never happens, but that's what the person who is sitting there is going to think.

We've all heard the old joke: the official agent is the guy who goes to jail. Everybody has heard that. And we certainly can—

The Chair: “The official agent is the person with strong convictions” is the one I heard.

Mr. Jerry Rice: Everybody knows.

Again, this comes up in the marketing research that Léger did with Elections Canada and their focus groups. They had official agents right across the country, twenty in five major centres. When asked whether they would be official agents again, most of them laughed and said no. We can't turn that into a riding association issue, which we will do if we put those responsibilities on a financial agent at a riding level.

Every time we add something to this bill, we're putting it squarely on the shoulders of volunteers, people who are doing this because they want a cause or are working for a cause. There are limits to that. There are strong limits to what a person will accept.

It's basically my biggest concern with the bill. We're downloading all this on volunteers. We're expecting them to perform at a certain level. Again, as I've said, I'm very much involved. I operate at a level of someone very much involved. Someone who is sort of involved is going to be less involved.

I know that all of these reporting things have gone on in Ontario for 25 years. They claim that it has worked fairly well. It may have, but they're talking about one-third of the number of ridings in an area that's physically a lot smaller and has a greater population.

If you have ridings where you have enough people, you may get someone to be a financial agent easily enough because you have that volume of people to draw on. In most organizations, 5% of the people do the work and 95% basically only belong. The trick is to make sure that the 5% is not three or four people. They can draw on people and get a financial agent.

In smaller associations, every party has the same problem in some part of the country where we have great associations here and we don't have them over here. We're all pulling on the one rope in trying to get everybody together.

In those instances, we will have difficulty getting the right people to do these things. We'll get someone where, like most official agents, if a buddy is running, then why not be an agent. We might get them once. My fear is that we will all get financial agents the first time and then we won't get them again. It will turn into a major struggle, or we'll have people halfway through saying that they've had enough and bailing out of this.

My advice to the committee specifically is what can we exempt riding associations from? What reporting can we reduce that riding associations have to do?

There are other issues the Alliance has with the bill. With only five minutes, I picked my battles and I went with this one. I do intend to have a written submission that will detail more issues that I have.

Thank you very much.

¼ (1805)

The Chair: Jerry, we appreciate that. Thank you very much.

By the way, we do actually appreciate the fact that you've found the all party committee useful in Elections Canada. It was this committee that was responsible for reviving it. We think it has proved useful since we did that a few years ago.

Mr. Jerry Rice: Yes, it has been useful.

The Chair: Our next witness is Miguel Figueroa, who is the party leader of the Communist Party of Canada.

Miguel, welcome.

Mr. Miguel Figueroa (Party Leader, Communist Party of Canada): Thank you.

Members of the committee, we certainly appreciate the opportunity to express the views of our party on this important legislation.

Without doubt, the system of party financing goes to the very heart of the electoral process and determines in large measure the extent of this democratic character. Canadians have grown increasingly cynical of the code system that is characterized by widespread perception of undue influence by the rich and powerful.

The government has argued that the proposed legislation would address those concerns by improving transparency and fairness in party financing. In our party's view, however, Bill C-24 would actually increase the existing inequities while transferring massive sums of public funds to the coffers of the largest and most entrenched political parties, further consolidating the monopoly positions of power within Canada's parliamentary system.

Concerning corporate and union contributions, the government argues that this restriction is a reasonable and even-handed measure intended to curtail the influence of special interest groups. There is every reason to be skeptical of this plan, however, with respect to corporate donations. Corporations, even publicly traded ones, are hardly transparent bodies in terms of their financial dealings, and recent history in various jurisdictions around the world is replete with examples of the existence of secret slush funds run by corporate paymasters in collusion with political parties.

To believe that the safeguards in this legislation would adequately police and prevent such corporate back-channelling would be either incredibly naive or grossly duplicitous. Trade unions, on the other hand, are by definition much more transparent in their financial activities. Financial reports and budgets are openly debated at conventions and trade union leaders are regularly held accountable to their members.

The main impact of this measure, therefore, would be to sharply restrict the active participation of trade unions in election campaigns and in political affairs in general. It would further increase the inequity between labour and capital in terms of their respective access to and involvement in the electoral process. We therefore consider it a grave attack on the democratic and political rights of working people in this country, and we're opposed to it.

With respect to the threshold for public subsidy, under this legislation allowances would only be paid to those parties receiving 2% or more of total votes, or 5% in all those electoral districts where the parties run. This clause overtly discriminates against smaller alternative parties. Had Bill C-24 been enforced prior to the 2000 election, for instance, not a single smaller party--six of the eleven, a majority of all federal registered parties--would have been eligible to receive this allowance.

How can such a flagrant attack on smaller parties be squared with the claim of bringing fairness to the system of party financing? Surely the authors of this bill know that in Quebec, the only other jurisdiction within Canada where such subsidies exist, there is no minimum threshold. Surely we have learned from the Molloy decision and subsequent rulings that the courts will strike this position down as yet another unconstitutional attack on small parties.

We suspect, however, that the minister is fully aware of this vulnerability and is prepared to drop the threshold. They may even try to gain some political mileage from it. But would such a gesture bring any semblance of fairness to the proposed system? We don't think so.

Even if this discriminatory pressure were to be removed, the allowances for all six parties combined, based on the last two general elections, would amount to a trifling 1.5% of total subsidies, while the big five would scoop the remaining 98.5%, feasting at the public's expense.

Overall, the subsidy provision constitutes a massive transfer of public wealth to the large established parties, amounting to almost $80 million over a four-year period. These subsidies, taken together, with the increase from 22.5% to 50% in reimbursements for election-related expenses, adds to an unprecedented and totally unjustified grab for public funds.

In short, we strongly consider that the legislation is motivated not by some lofty objective to render a more fair and equitable electoral system, but rather by the partisan self-interest of the established parties. It would tilt the electoral playing field to such a degree that only the biggest and richest of those parties already in Parliament would be able to compete financially, thus strengthening the hegemony over political life in this country.

In conclusion, members, the vast majority of Canadians fervently do want electoral reform, changes that would open up the door to genuine political participation in and ownership of the political process. Such reforms, in our view, must include the introduction of proportional representation, the right of recall, the restoration of a longer federal election campaign, so that parties are forced to go back to the hustings and communities, the provision of equal access to media, stricter limits on campaign spending, and the replacement of a permanent voters list with regular enumerations.

¼ (1810)

In our view, Bill C-24 fails to address these aspirations. In fact, it moves in the opposite direction. The consequences of these amendments would further deepen cynicism among Canadian electors and the public in general about politics and parliamentary democracy. They would reinforce the downward trend in voter turnout, and further distance the public from political life in this country. However, as Canadians find out more about the substance of this act, we're confident that they too will oppose it.

Thank you very much.

The Chair: Miguel, thank you very much.

I have to say, we particularly appreciate hard numbers, because they challenge our researchers. So we will try to replicate your numbers, and we certainly appreciate what you're doing.

Our next witness is Julian West, who is the organizing chair of the Green Party of Canada.

Julian, we're in your hands.

Mr. Julian West (Organizing Chair, The Green Party of Canada): Thank you very much, Mr. Chair.

I am very happy to have this opportunity to address the committee again. I previously appeared before the committee when the House was considering Bill C-2.

[Translation]

At the time, our party proposed a few ideas that were not well supported by the government, nor unfortunately by the majority at the committee. Nonetheless, we are very glad to see that some of those ideas are now contained in this bill and we expect this committee to make a commitment that is more constructive this time around.

Before I start, I would like to thank the committee for its decision to hear the parties in alphabetical order, and not according to their parliamentary status. For Bill C-2, we were grouped by type of party. With this decision, it's a win-win situation.

We too can share the meal, with biscuits, even!

For the committee, I expect a better exchange of ideas. I hope that next time, you will classify political parties in alphabetical order in the other official language.

[English]

I'm now going to turn to my main points on the legislation, and I'm going to touch on the following areas: the limits imposed on corporate and union donations; the limits on personal donations; the proposed formula for direct public funding, and the effect of this formula and its threshold on new entrants.

First, with regard to the limits on donations, our party—and my colleague from the Bloc has already raised this—has always strongly supported an outright ban on donations from corporations and unions. Indeed, this formed the main thrust of our presentation, given by our then leader, when the Senate met on Bill C-2. We will stand by that. We think the small amount of extra money that may be raised by allowing donations up to $1,000 would be barely worth the administrative burden it imposes. Allowing these small donations won't provide a big revenue stream to the parties, and we would ask the committee to consider whether it might not just be simpler to cut it off.

As for the much higher limit of $10,000 for personal donations, we think that it has been set so high as to be almost a joke. While there have doubtless been instances when an individual has given a donation of $10,000 on a single occasion, there must be very few individuals who maintain such a level of giving over the long term. So if an individual wants to give $100,000 to the party of her choice, this is still permitted under the legislation, but it will take 10 years to give the money, because it is $10,000 per year. The committee might like to do some research to see if there are any individuals who gave as much as $100,000 over the course of a decade. If there are not, then this legislation is in fact placing no practical limit on any individual donors.

We would suggest that instead of $10,000 per year, a more reasonable figure might be $10,000 over an electoral cycle. That would be about $2,500 a year. Or perhaps the limit should be set to coincide with the point at which there is no longer any tax advantage, which would be at $1,275 per year.

Second, with regard to the funding formula per vote, this was indeed one of our key recommendations at the time of Bill C-2. We recommended a formula of something like $1 per vote per year, and we said that there should be no threshold to qualify. After all, if a party runs and it gets 10,000 votes and therefore misses the 2% threshold, which would be about a quarter of a million votes, the fact that they received 10,000 votes is not going to open them up to an unwarranted amount of government largesse. By avoiding a threshold, you don't get into this uncomfortable situation, where a party might get 1.99% of the vote, which did happen to the Green Party of B.C. in 1996, and also to the Parti Vert du Québec in 1988. Each had 1.99% of the vote. Those parties would get no money, but if they had just a handful of more votes, they would have around $400,000 per year.

However, given that the government has chosen to impose a threshold, we are at least relieved that it is a realistic threshold, and not 5% or 10%. We think 2% is a target that a party could set out to compete for and would have a real shot at. I wonder if there has ever been a party that has run anything like a full slate across the country and has not received 2% of the vote. We think it is something our party can reach for. At this point, you would not have our support for a 10% threshold, but 2% is something I think we can live with. As I've already said, there are a lot of other things that are praiseworthy in the proposed legislation, and we certainly wouldn't want to derail the whole process.

On the subject of thresholds, I'll just mention very briefly that the reduction in the reimbursement threshold from 15% to 10% is a major step in the right direction—although we do remind the committee that the chief electoral officer has repeatedly recommended that it should be 5%, in order to harmonize it with another threshold that is set for parties. Elsewhere in the proposed legislation, the figure of 22.5% has been moved to 50%, to harmonize the treatment of parties and candidates, so I wonder why that harmonization isn't being considered here.

Third and last, I'd like to make some points about new entrants. It has been suggested that tying the funding formula to a party's performance in past elections imposes a rigidity on the political system, and makes it difficult for new entrants. We don't think this is necessarily so. A lot of people might think of the Reform Party in 1993. They had contested the 1988 election, but did not do extremely well, and would not have received a lot of money under this funding formula. In fact, they only just met the 2% threshold, or they might have had no money at all in 1988. In 1993 they came into the election with 15% or 20% in the opinion polls. The suggestion has been made that tying their resources to their performance five years earlier would be unfair.

¼ (1815)

We would submit that those polling figures could literally be taken to the bank. Surely a financial institution--and perhaps that party would find a financial institution that was sympathetic to their policies--could look at that figure and be able to estimate the amount of public subsidy the party was in line for in the coming mandate. Even if they had really collapsed in voting in the campaign, they would still get perhaps 5%, and the bank might be willing to advance them money on that basis. So they could have a loan of a few million dollars for the election, effectively using their opinion polls for collateral, and the new entrants could borrow from the money.

I see the chair signalling I should wrap up, so I'll simply make one more point very quickly about new entrants. I think we should try to do something for parties that don't get to 2%. I'm thinking two things we could look at are broadcast allocation and householders. These are both used in the U.K. Registered parties are given free-time broadcasts during prime time. Also, every candidate in the election, whether they're from a small party or a large party, is given a subsidized householder to every voter.

When you look at things like that, you're not actually transferring money to the parties but you're putting an emphasis on the electors and their right to have an informed ballot. I think that is really in the public interest.

¼ (1820)

[Translation]

That concludes my comments. I will now answer your questions.

[English]

The Chair: Merci beaucoup, Julian.

Thank you very much to all the witnesses.

We appreciated the references to the Bill C-2 hearings. We are aware of those, but as I said before, any references to sources of information on this matter we greatly appreciate.

For the witnesses and new members of the committee, I know some of the witnesses have been following our hearings. We proceed now to questions and answers. As I mentioned, we go from side to side at the table and through the parties. Five or six minutes is for the exchange, so the answer and the question are taken in that time. I hope we can keep to that, and I hope we will certainly get through the parties at least once in this period of time.

Members may address themselves to an individual, if they wish, or to all of you. However, I will cut you off at the five- or six-minute time limit.

The list I have is Ted White, Geoff Regan, Michel Gauthier, Jacques Saada, Dick Proctor, someone else, and then Rick Borotsik.

Mr. Ted White (North Vancouver, Canadian Alliance): Thank you, Mr. Chair.

Mr. Figueroa, you talked about public cynicism, and I agree with you, I don't think this bill will do anything to alleviate that problem. I congratulate you for your past work on behalf of small and emerging parties in forcing the government to defend or try to defend its measures in court. I hope you don't have to do that again in this case, but I have the feeling you are going to have to do it again. I wonder if you would elaborate a little on the areas of the bill that you feel are vulnerable to this constitutional challenge.

Mr. Miguel Figueroa: Certainly I think the threshold is vulnerable. If members will recall--and for your edification, if you don't recall--the original Molloy decision, which was not appealed by the government, had several parts to it. One was the 50-candidate rule, and that has been appealed right to the Supreme Court. We're waiting for the court to rule on that question.

However, there were two other aspects to the original case that were not appealed and were accepted by the government. One had to do with half of a candidate's deposit being refundable only if the candidate got over 15%. The court found that was unfair discrimination against smaller parties and was totally unjustified, and it was struck down.

Although this is somewhat different, because in one case you're talking about a deposit, as opposed to a subsidy, nonetheless there is a growing body of opinion that thinks this would be vulnerable, for sure--which, by the way, was also reflected in the judgment of the Ontario appeal court ruling to some extent with respect to the question of establishing too high a threshold with respect to getting the party's name on the ballot and so on.

Mr. Ted White: Thank you.

Mr. West, in common with Ms. Godin and Mr. Hellyer, you mentioned the feeling that there should be a total ban on corporate donations. In case you're in opposition in Parliament, you'll find it very useful, as we have as the official opposition, to be able to find what appears to be links between corporate donors and contracts awarded by the government. So if and when this bill is implemented, that tool will be gone. There'll be no way of determining where there is a link. I think you're dreaming in technicolour if you think the government's not going to award contracts to its political friends, because that support will still be measurable somewhere behind the scenes.

Do you have any idea how we overcome that problem? If we completely ban corporate donations, there's no link between corporate donors and subsequent contracts awarded by the government.

¼ (1825)

Mr. Julian West: As I understand it, if there's a ban on corporate donations then they're not donating.

I think yesterday the example was made of Bombardier, $140,000 in one year. I think what you're suggesting is that Bombardier is supporting the Liberal Party and that a token of that is this $140,000 donation. If you take that donation away, then they're not receiving money from that corporation. If what you are suggesting is that there are other ways for there to be relationships between Bombardier and some of the government members, surely those relationships would be there whether there was a transfer of funds or there wasn't, I would have thought.

Mr. Ted White: Thank you.

That's fine. That's all for this round, thank you.

The Chair: Ted, thank you very much.

Geoff Regan, then Michel Gauthier, Jacques Saada, Dick Proctor.

Mr. Geoff Regan (Halifax West, Lib.): Mr. Chairman, thank you.

I first point out that I think the argument from the Alliance has been that the reason there's a relationship is because of a donation to the party. I find the argument my colleague makes specious in this regard.

[Translation]

I would like to come back to what Ms. Godin said regarding the fact that it would be too complicated, in her view, if the rules also applied to party nomination candidates. I would respond that if the principles underlying this system and these rules apply to a general election, why should they not also apply to candidates seeking their party's nomination?

Ms. Lorraine Godin: I will not speak on behalf of the other parties, but I will speak for our party. Generally speaking, nomination candidates do not invest money in that process. At least that's how it works within our party; candidates do not spend money to win the party's nomination. We do things differently. Therefore, in our opinion, it would be a useless exercise, since it would make the nomination process even more difficult for election candidates.

Mr. Geoff Regan: Oh, so you have not heard of nomination contests where candidates spent, for instance, $100,000. That has already happened in Canada. So, knowing that this has already happened, don't you think it would be a good idea to have these rules?

Ms. Lorraine Godin: In that case, I think we should do two things. First, we should limit nomination candidates' expenses to a certain amount. Second, each party should certify that no nomination candidate spent over $500, for instance. That way, it would not be necessary to implement heavy administrative measures. Say it's $500 or less. If that's the case, it would not be necessary to involve—

[English]

The Chair: Geoff, excuse me. I want you to know that time is ticking, and I'm not taking this away from it, but Tom Jarmyn wants to interject on this.

Lorraine, please continue. I was simply advising Geoff of this.

Geoff, are you okay?

[Translation]

Ms. Lorraine Godin: I was just concluding. As I was saying, we should establish a threshold, and candidates who spent less than the threshold would not have to file the paperwork with an official agent. This means that in local nomination contests which are not complicated, people would not be subjected to filling out a mountain of paperwork.

Mr. Geoff Regan: The problem is that if you want to limit expenses—and the bill contains such limits, as you perhaps know—you have to fill out reports and so on. So, unfortunately, it complicates things.

[English]

Mr. Jarmyn, I think, as you say, Mr. Chairman--

The Chair: Tom Jarmyn.

Mr. Thomas Jarmyn: Thank you, Mr. Chair.

In line with Mr. Rice's comments earlier on, it's our position that these aspects of the legislation are actually a massive intrusion into the internal governance of our various political parties. We all do these things in different ways in many respects, and what the proposed changes are going to require--I know within my party, and I can speak from having reviewed a couple of other constitutions--is a basic rewriting of how we operate our procedures. This is proposed without much good reason, we would suggest, if we adopt the principle that at the constituency association levels, for example, they become non-receipting agencies and operate generally as they do right now.

Our caution would be that what this bill is taking us down the road to is almost turning us into generic models of one another and doesn't deal with the individual operating processes that we've developed and learned over time.

¼ (1830)

The Chair: Geoff Regan.

Mr. Geoff Regan: My next question would be to Mr. Hellyer, who suggested that reports should be submitted to the Commons ethics commissioner of any such donations, including what they're for, and so forth. I'm curious, but why not submit those to the chief electoral officer, Mr. Kingsley?

Mr. Paul Hellyer: That would be fine, as long as it's reviewed and open, with it being public knowledge what the purpose, reasons, and amounts are.

The Chair: Michel Gauthier, then Jacques Saada, and Dick Proctor.

[Translation]

Mr. Michel Gauthier (Roberval, BQ): Thank you, Mr. Chairman.

I would like to thank the witnesses for sharing their opinions and views with us this evening. It will help the committee do its work.

There is an issue which concerns me. I'll ask my question to Ms. Godin, since I have already discussed the matter with her and I would like to, for the enlightenment of committee members, ask her the same question again, and give her the opportunity to respond, since she did not address it in her statement. It has to do with the issuing of receipts for income tax purposes and the filing of reports by the riding association. We are greatly concerned by the fact that the bill gives riding associations the responsibility for issuing receipts for income tax purposes because of the impact this action would have. It has a fiscal impact and a significant monetary impact, and it involves a certain amount of logistical organization.

So, I would like to ask Ms. Godin to tell us what she thinks of this situation and why, in her view, it may be a better idea to go about it differently.

Ms. Lorraine Godin: Thank you, Mr. Gauthier.

Indeed, for my part, I think that issuing receipts for income tax purposes is a huge responsibility. Giving someone a tax credit which will be tabulated by Revenue Canada has a significant monetary impact. But I also think this is an important responsibility which must be carried out as rigorously as possible.

That being said, giving this responsibility to riding associations which are, as Mr. Rice said, largely staffed by volunteers, means giving a huge responsibility to people who sometimes are not aware that issuing receipts must be done rigorously, and controlled, and that the receipts must be issued correctly, must indicate the correct amount, and must be issued to the right people. Further, the staff must ensure that no receipts go missing in the office. For instance, pre-signed receipts could go missing.

I would suggest, for instance, that, under the bill, the principle agent be solely responsible for issuing receipts for income tax purposes. This would ensure that the process of issuing receipts is rigorously controlled, because, in my view, it is a serious matter which requires the involvement of someone who is familiar with the law and who knows how to correctly apply the procedures. This would ensure that the receipts are issued correctly and that the reports filed with Revenue Canada are filed correctly and on time.

The Chair: Michel, I think Jerry Rice has something to add.

[English]

Mr. Jerry Rice: There are ways around this too. If you wanted the easiest way, the most straightforward one that occurs to us would be to ban riding associations from receiving any moneys whatsoever, with the exception of money from the federal party or money that's given to them by a reimbursement of an election expense. Then all of the money that they get has to go through the chief agent of the party before it gets to them. It would all be receipted at that end by a professional. Anyone who wants to donate to riding association A could simply make the directed donation to their party for it to go back to riding A. That would take all of the receipting completely out of the hands of riding associations, and would alleviate a whole bunch of headaches for me personally.

[Translation]

The Chair: Michel Gauthier.

Mr. Michel Gauthier: I would perhaps have another question for Ms. Godin about the complexity of the reports the party's official agent must file with the returning officer. So, I would like to ask Ms. Godin to address this issue, since she is the one responsible for completing reports on behalf of our political party. I suppose that this is as big a problem, perhaps even more so, proportionally speaking, for smaller political parties.

Does Ms. Godin feel that, without external audits, riding associations would be able to adequately fulfil the reporting requirements to the returning officer, given the present situation?

¼ (1835)

Ms. Lorraine Godin: At first glance, as the bill is presently drafted, I would have to say that they could not fulfil those requirements. I do not think riding associations have the necessary resources and adequately trained personnel at the present time to be able to complete all of those reports.

I understand the Chief Electoral Officer's desire to have information that is relevant and accurate as required by law. That being said, there is a general tendency on the part of the CEO to have fairly complex electoral reports or financial reports, but it is not that easy for riding associations, for volunteers, to do the same. There will have to be training, supported and followed up for all those organizations in order to ensure adequate, timely reporting, because I do not think they will be able to do it on their own. It won't be possible.

[English]

The Chair: Merci, Michel.

Paul.

Mr. Paul Hellyer: I would just like to say that I share the apprehension of my colleagues to my left and my right concerning allowing riding associations to issue receipts. I think it's going to lead to a lot of complexity and that it would make it open to a lot of abuse.

The Chair: Thank you for that.

Jacques Saada, Dick Proctor, and then Rick Borotsik.

[Translation]

Mr. Jacques Saada: Thank you, Mr. Chairman.

I would first of all like to thank the witnesses who are appearing here today.

Ms. Godin, I must say that, in the six years that I have been a member of the House of Commons, I believe you are absolutely the most concise presenter I have ever come across. Thank you very much.

Like you, I am convinced that this is essentially a worthwhile bill. You mentioned that the bill would allow us to restore public confidence in politicians, or that it would at least go some way towards restoring that confidence. I agree with you; I feel the same way. I also agree with you on the idea that a ceiling of $10,000 for an individual might be a little too high.

I have a question for you: aside from the bill, are there any other measures which might be useful in preventing individuals working for the same organization from contributing as individuals, thus making the contributions less transparent, because the public opinion would be that of the organization, and not the individuals? This has nothing to do with any organization in particular.

Ms. Lorraine Godin: I agree that the bill does, in some way, provide for this, because the bill says that an individual must make that contribution from his or her own pocket, and that the individual cannot be reimbursed in any way.

That being said, I think it would be almost impossible to check whether or not that rule was being complied with, unless this came up in an audit of the organization's financial statements. There has to be a specific section in the act to prohibit organizations from reimbursing any political contributions.

Mr. Jacques Saada: A bill, for instance.

Ms. Lorraine Godin: That is right.

Now, if an organization were to try and hide this type of refund, it would be difficult to find. If, during the course of an audit, the auditors noticed any refunding of political contributions, they would have to make a note of that in their report or in the financial statements, or they would have to advise somebody about it. That is the only way I can see of solving this problem.

Mr. Jacques Saada: Thank you.

I have two questions for Mr. Hellyer. First of all, on page 2 of your brief, Mr. Hellyer, you say:

The method of distributing it on the basis of the number of votes received in the last election is undemocratic—

You then go on to say:

Each taxpayer should have the right to indicate on their income tax form which party they want to support—

Well, we know that some people never file an income tax return, especially poor people, spouses who have no income, and so on. How could such a system be more democratic than the present system?

I have another question, but I think you've already answered it in part. I will ask you both questions, if I may, and let you answer afterwards.

My friend mentioned this; there is a major technical problem in that the powers of the House of Commons Ethics Commissioner extend only to members of Parliament. Now, the situation might arise where a leadership candidate would not be a member of Parliament. So, it would indeed be important to open the door in this regard to the Chief Electoral Officer instead.

¼ (1840)

[English]

Mr. Paul Hellyer: I think your colleague has made a better suggestion as far as the slush fund is concerned, which was to have the chief electoral officer handle it. As far as the other is concerned, it is a weakness if you just limit it to the people who file income tax returns; but at the same time, it's a very large proportion of the total population, so it would probably be pretty well indicative of the population at large. If you felt that was not good enough, you could then just say that anyone who did not file a tax return for legitimate reasons could file a certain form with that particular election on it. That would make it open to other people to indicate their preference as far as the distribution of public funds to political parties is concerned.

[Translation]

The Chair: Excuse me, Julian has a comment.

Julian West.

[English]

Mr. Julian West: Yes. Can I say on this that while the fraction of people filing tax returns may be a large percentage of the overall population, it is not a random selection of the overall population, and there is definite skew in the subpopulation that does not file, which makes it more likely for them to hold different political views, and therefore they might want to donate.

I've gone through this question with a number of other people making similar suggestions, and I think this idea of asking people to file a supplementary tax form just so they can make the political donation isn't going to work either, because there's obviously a much greater incentive for a person filing for tax purposes to file.

The Chair: A point, briefly, Jacques.

[Translation]

Mr. Jacques Saada: Yes. I want to go back to Ms. Godin, because I want to be sure that all my questions have been asked first.

Expenses incurred to get a riding nomination. Even though the legislation would set a limit, this would not preclude that a political party might make an internal decision to not authorize any expenses, or that it might organize things internally as it wishes. So, I have a hard time understanding why you are so reluctant to have the legislation set a limit to prevent any abuse of this kind on the part of candidates seeking a nomination.

Ms. Lorraine Godin: I have no problem with the limit. I'm not sure I understood your question.

Mr. Jacques Saada: When you set a limit for nomination expenses, it is just that, a limit, and there is no obligation to reach that limit. So, if your internal operations are such that you don't need a limit because, in any event, your expenses are never that high, you won't have any problem operating in the same way.

Ms. Lorraine Godin: My problem is with the registration of those seeking a nomination, and the requirement to have an official agent, to appoint a financial agent, open a bank account, draw up a report, etc. It's all that administrative work, if you will, that is a problem for me, in the sense that, in our case, there usually aren't any monetary investments. Our candidates might spend $50 at most. But they will be required to go through all of that, to do all of that paperwork, and comply with all of the requirements, for nothing, really.

Mr. Jacques Saada: But when you talked about your minimum—

Ms. Lorraine Godin: Yes, but that is precisely why I feel that this should be eliminated for expenses under $500, because in our case, we might have some good candidates who might be frightened off by all of that at the outset, and who therefore would not seek a nomination. Therein lies my problem with respect to candidates for nomination.

The Chair: Thank you very much, Jacques. That's it.

[English]

Dick Proctor, Rick Borotsik, then Rodger Cuzner.

Mr. Dick Proctor (Palliser, NDP): Thank you very much, Mr. Chair, and thanks to all of the presenters.

Ms. Godin, could you tell us, from your experience in Quebec--and I appreciate that the legislation René Lévesque brought in, and we're copying to some significant extent here, does have a limit of $3,000--has there been a desire on the part of political parties over the last 26 years to raise that maximum amount?

[Translation]

Ms. Lorraine Godin: Not to my knowledge. I can't say for sure, but I feel that, if there had been such a desire, from what I know of the way things work in Quebec, because all of the political parties get together to make unanimous changes to the Elections Act, if they had wanted to raise it, they would have done so. That being said, this does not mean that there is not such a desire now or that there would not be such a desire in the near future. I am not aware of that.

[English]

Mr. Dick Proctor: I have another question, and maybe it was lost in the translation. You indicated that you would support an amendment about the selection and appointment of district returning officers. Is that by the Elections Canada official, or by whom are you suggesting the appointment be made?

¼ (1845)

[Translation]

Ms. Lorraine Godin: The Chief Elections Officer for Canada.

[English]

Mr. Dick Proctor: Merci.

Mr. Hellyer, I'm a little bit surprised that you would allow the donations from corporations and trade unions, and you say very modest amounts, perhaps $5,000 or $10,000, if I heard you correctly. Do you not concede that there would be a greater possibility for sleight of hand, skullduggery, whatever you want, whereby directors of a corporation or a trade union would be able to combine dollars and therefore skirt the law if we opened it up in that way?

Mr. Paul Hellyer: I think what I suggested was $2,000 or $3,000, with a maximum of $5,000.

Mr. Dick Proctor: Yes, you did. Sorry, that's right.

Mr. Paul Hellyer: I don't think there's too much risk. I don't really think that any person or any party can be bought for that amount of money.

What I'm really concerned about, and I think you're well aware.... I have in front of me here the figures for George Bush's campaign. For example, of the total receipts of $193 million, the private donations were $75 million, and $10 million of this was not disclosed. Then if you look at the list of the top contributors, you'll find that about half of them have been in trouble with the law in the last few days, as reported in the New York Times.

What I'm saying is there is a temptation. I could give some Canadian examples that bother me. I think maybe I won't, because I know most of the people involved and most of them are my friends, or were. But there is a temptation. When you have banks, for example, that are allowed, through their various subsidiaries, to contribute $100,000 a year, that's a lot of money.

Mr. Dick Proctor: But aren't you making the point that I'm concerned about? Because in the United States there is a ban on corporate and trade union donations, and that's how they've gotten into the whole business of the hard money and soft money stuff. That's how they've gotten around it, frankly.

Mr. Paul Hellyer: I've proposed that it be illegal to make those other donations except where it's been approved by the now chief electoral officer. I think that's very important. I also think the $10,000 limit is high.

I have to admit, however, that what is being proposed in this bill practically eliminates the possibility of new parties getting born. Because I have some experience with our own, and if I hadn't been able to help finance it when we had our backs against the wall, it would never have got started and it would have not have continued until now. The National Party was raised earlier. Without Bill Loewen's very generous donation, it would never have been launched. Putting a limit of say $5,000 on personal donations is pretty well going to make it impossible for new parties to get started.

The reason I favoured this, although we haven't been able to raise money from corporations, with I think maybe one or two exceptions, is that raising money from individuals is very difficult. I have gone through this for several years now, people writing and saying “Promise not to take any money from unions or corporations.” I say “All right, how much have you given in the last two years?” And the answer usually is “Nothing.” If you ask them to contribute $10 a month, you have to pull all their teeth and twist their arm, and even then it might take quite a while to do it. So it's tough slogging.

Mr. Dick Proctor: We can get into a long debate on this, but we know from the election returns that Mr. Rice's party, and the party I'm proud to be involved with, raised more than half of our money from individual contributions, around 60%, I think, if you look at the figures for both. Some of the other parties here get 60% from other sources. I think there's a culture, and I don't think it's all that it has to be corporations or trade unions.

¼ (1850)

Mr. Paul Hellyer: No, except I think--having been in business for all my life--in some cases a small-businessperson, for example, might say “I'll give you $1,000 from my company.”

The Chair: Dick, that's it. Thank you very much.

Rick Borotsik and then Rodger Cuzner.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

My first question is to Ms. Godin. We're going to hear from Quebec. I hope we travel there, because there are two provinces that have these kinds of restrictions: one is Manitoba the other is Quebec. Quebec works better, I think, than Manitoba. Can you tell me, in Quebec is there a provincial contribution to the provincial parties? We talk of $1.50 here per vote. Can you tell me what that contribution is and how it is calculated?

[Translation]

Ms. Lorraine Godin: That's basically what is proposed under Bill C-24, that is, the government would subsidize each party in direct proportion to the number of votes that party received. That being said, I am not familiar with all the details of the bill. I don't know whether there is a minimum number of votes a party must get to receive the subsidy, but the ADQ does receive funding from the government.

[English]

Mr. Rick Borotsik: Thank you, and we will get all of that detail from the administrators of the plan in Quebec.

Mr. Hellyer, I want to go back perhaps to what Mr. Proctor was suggesting. You had said that transparency and accountability is not enough, that big money talks, and you've just given me some numbers of some very big money, $193 million. If this legislation is put into place the way you see it drafted right now, do you honestly believe that influence or political patronage or the issuing of contracts is going to become more transparent and there isn't going to be any opportunity for perhaps some favouritism within that aspect?

Mr. Paul Hellyer: I don't think you can change human nature totally, but I think that if you eliminate corporate donations, for example, there will be a lot less pressure to favour your friends who have made political contributions.

Actually, if the chair would give me a minute or two--

Mr. Rick Borotsik: It's my time; I'll give you the minute or two.

I don't accept that. I believe that friends are friends, politics is politics. And you're telling me that if this goes through those friendships and that politics stops?

Mr. Paul Hellyer: No, but I'm saying that it wasn't always this way. Fifty years ago, when C.D. Howe was raising money for the Liberal Party he did not allow political contributions to interfere with the awarding of contracts. And I know that from personal experience.

Mr. Rick Borotsik: It's changed in the last fifty years.

Mr. Paul Hellyer: Exactly. It has changed in the last fifty years.

Mr. Rick Borotsik: In the last nine years.

Mr. Paul Hellyer: And the corporate culture has changed. Even a few years ago some of the corporations I had shares in, Mutual Life and others, would make donations as a matter of public interest. They'd say, “We'll put aside 1% of our earnings and distribute them to various arts and social groups across the province or the country, and that will be our contribution”.

Increasingly, when corporations make donations they expect something in return. Whether it's in the field of arts, in public service, or wherever it is, they expect something back. This is a general change in the corporate culture in the last decade or two, and I think for that reason, yes, there would be a change. I think it would reduce the tendency for corporations to--

Mr. Rick Borotsik: I'm going to jump in here, Mr. Hellyer. I may be a little bit naive--I don't believe so--but do you not believe that some of those corporations would simply demand or expect good government, good democracy, and good leadership from their donations, as opposed to largesse?

Mr. Paul Hellyer: Frankly, I think it's because I've been around so long, and I don't know whether you call it cynicism or realism, but I don't believe they do.

¼ (1855)

Mr. Rick Borotsik: Not all corporate donations are very large and expecting certain favours. There are some corporate donations that are reasonably small or reasonable.

Mr. Paul Hellyer: I think that's the reason I suggested a very low limit, because I think most cases--

Mr. Rick Borotsik: So those contributions wouldn't expect favours, they would just expect good government.

Mr. Paul Hellyer: They certainly wouldn't earn favours.

Mr. Rick Borotsik: As Mr. Proctor said, we could have a wonderful debate on this.

Mr. Rice, you touched on a whole different issue, and you said that with only five minutes you're going to fight your battles. You fought the battle on the regulatory side, and we're going to get some more of that later.

Just for the record, let's fight another battle. You didn't talk about the contribution limits; you didn't talk about the $1.50. Can you tell me very quickly what is your position or your party's position with respect to the contribution limits and the $1.50?

Mr. Jerry Rice: If I could, Tom could answer that better.

Mr. Rick Borotsik: Fine.

Mr. Thomas Jarmyn: Our position basically is that public subsidy of the operations of political parties is something unnecessary. We should be able to raise the money that's necessary to operate from the electorate and the people we're going to get votes from.

Mr. Rick Borotsik: Are you suggesting that the 50% contribution to the candidates is perhaps too much?

Mr. Thomas Jarmyn: No, the contribution with respect to the candidates and the performance during the actual process is a separate issue from the ongoing annual--

Mr. Rick Borotsik: So you're okay with that, and you're okay with the 22.5% that's returned to the parties in an election?

Mr. Thomas Jarmyn: We're okay with that funding; our problem is the annual operating subsidies.

Mr. Rick Borotsik: So that public funding is fine, but this public funding is not fine. Thank you.

The Chair: Rick, I appreciate it.

I should probably say now for the witnesses who are behind that normally the members and the witnesses refer to the chair from time to time. Thank you very much.

Mr. Rick Borotsik: Yes, Mr. Chair. I apologize profusely.

The Chair: It's Rodger Cuzner, and then, relatively briefly, Ted White and Michel Guimond.

Mr. Rodger Cuzner (Bras d'Or—Cape Breton, Lib.): Through the chair to Mr. Hellyer--

The Chair: Thank you very much.

Mr. Rodger Cuzner: Just to follow up on a comment from my colleague, Jacques Saada, with regard to the distribution of the funding based on the number of votes in the prior election, I have a problem with it being identified as undemocratic. We've heard some testimony that identified various ways of assigning that money, perhaps using membership lists, but that too offers various challenges.

With the method you're offering, do you see some drawbacks in the fact that the money would be allocated on an annual basis, putting a great deal of onus on or challenge to the parties to do any kind of long-range planning, just trying each year to deal with the allocations coming off the income tax season?

Mr. Paul Hellyer: I think first of all it puts a very strong incentive on all parties to try to please the electors and to put their interests first, and sometimes people wonder whether that is the case or not.

I really agree with Mackenzie King on one or two things. He said good government was good politics. I think people sense that. If there's one thing I think is lacking today, both in government and business, it is long-range planning. There's too much responding to the latest poll or the latest quarterly statement, and not enough saying “Hey, we're taking the long view here, so let's build this up, have a long-range vision, and do something.”

So no, I don't think it would have that effect. I do think it would have the effect of allowing people to do what they sometimes would like to do, which is vote strategically during an election, for whatever reason, and then afterward say they did that, but in reality, their preference is for their own party and they'd like to see them have an extra $1.50 or so for their purposes, to build themselves up and see if they can't offer some alternative policies in the years ahead.

Mr. Rodger Cuzner: You would think it was probably only coincidental if there were positive messaging coming out of government departments, maybe starting each April 1. But that would only be coincidence. I'm only joking.

I have a quick question for Mr. Jarmyn. There seems to be consensus across the table with regard to the concern about requiring 2% of the vote to secure funding. Does the Alliance have a position on that?

Mr. Thomas Jarmyn: Our basic position is that the public funding on an annual basis is just not something the government should be in. Never mind thresholds, we just don't think the annual funding is appropriate, period.

The Chair: Ted White and then Michel Guimond.

Mr. Ted White: Thank you, Mr. Chairman.

I have a question for Jerry Rice, just pursuing a matter from the discussion with Ms. Godin having to do with candidate nomination.

I first need to know, Mr. Rice, are you familiar with the section of the act that deals with the nomination of candidates?

½ (1900)

Mr. Jerry Rice: Yes.

Mr. Ted White: I know it's your hobby, so I figured you'd probably read it.

I had expressed concern to the minister on the day he was before the committee that despite his claims this act would encourage participation by disadvantaged persons like women or other people who may be disadvantaged socially or financially, I felt exactly the opposite. This section of the bill is so complex it would require a fair degree of sophistication, probably contacts in the community to get an auditor and some business skills, certainly, to be able to manage the whole campaign.

Do you agree with Ms. Godin and me that this is very complex and will probably act as a disincentive to candidates? If so, do you have any suggestions about ways it could be simplified or improved?

Mr. Jerry Rice: Yes. I do agree that it is complicated, particularly in one instance even more so.

If you're the financial agent for candidates and the contestant becomes the candidate for a registered party, within 30 days of the writ you pretty much automatically become the official agent. You now have two returns due on the same day, four months after the writ.

I'd quit. I wouldn't have any part of it. It's as simple as that. I've been an agent three times. I've committed to doing it the fourth time. Nobody wants to do it twice. I must be half-mad or something. To get people to run for a nomination, personally, in a nomination contest, I think the winner should be the person who divulges who they received their money from and where.

I realize the act only refers to the winner twice. The first reference is that the winner gets to be the member of Parliament. The second reference is that for the winner, despite his threshold, it doesn't have to be 15% to get the reimbursement. Everywhere else it treats everybody in the same way.

You're not going to get people to run on speculation. It is a complicated process. You show it to someone. It's not simple. It's a large amount of work for the potential you might get. You go through all of this work. You're doing all of this for the possibility of running for Parliament. You're not even running for Parliament. You're doing all this for the possibility of it. It's an awful lot of work.

In campaigns, official agents are usually the people paid. I'd carry that over to financial agents and nomination contestants. If I were doing it, I'd expect something. It's an added expense to go with that.

Mr. Ted White: Have you thought of any ways it could be improved? Would you like to see the whole section scrapped and return to what we have at the moment?

Mr. Jerry Rice: Yes. The only suggestion is that if they do really want to know, because undue influence may be on that person when becoming an MP, that person reports who gave money and how much. That's pretty much it.

On the limit of $35,000, I can only think of a couple of instances that I can recall--one of them here in Ottawa--where a nomination fight actually went over that amount of money. I don't think it's going to be the real problem.

I think if you say that if a person wins, he or she has to fill out all the forms, then you might get people to go for it. If you have to fill out the forms just for trying, I think it's a bit too much.

Mr. Ted White: Thank you.

The Chair: Michel Guimond and Dick Proctor.

[Translation]

Mr. Michel Guimond: Thank you, Mr. Chairman.

Ms. Godin, gentlemen, thank you for appearing before the committee. Let me tell you that it's nice to see the President of the Communist Party of Canada sitting beside two representatives from the Canadian Alliance. I think this is a good illustration of the rainbow mosaic formed by all our parties.

I would like to respond to something Mr. Hellyer said in response to a question asked by my colleague Dick Proctor with regard to the amount of a thousand dollars which may be donated by a company with several branches.

Mr. Hellyer, you have probably not had the time to read or to hear the testimony of the Chief Electoral Officer, Mr. Kingsley. He appeared before the committee and I gave him my interpretation of section 404.1, which deals with the $1,000 limit on corporate donations. I gave the example of the Royal Bank of Canada, which apparently has 365 branches in this country. Each branch may decide to donate—probably not to the Bloc; so let me choose a fictitious example—365 cheques of $1,000 each to the Liberal Party. This would amount to a $365,000 contribution, which is probably what the Royal Bank gives the Liberal Party of Canada anyhow these days.

In answer to Mr. Proctor's question, you said that this issue was of concern to you and that it could potentially happen.

When I put the question to the Chief Electoral Officer, he almost laughed in my face. According to his interpretation, if the Royal Bank of Canada wanted to make such a contribution, it would have to divide $1,000 by 308 candidates, 308 ridings, which would amount to a contribution of $3.22 for each Liberal Party candidate. So the Chief Electoral Officer did not take my interpretation seriously. If you think his interpretation is wrong—and I know he is listening to us—I would like you to send to the clerk your opinion of section 404.1 with regard to the $1,000 contribution a corporation may make.

½ (1905)

[English]

Mr. Paul Hellyer: I asked my researcher to give me an opinion on that section, and he said he could not find anyone who took the interpretation that they could give $1,000 to each riding.

I've read it carefully, and I wouldn't mind seeing it made a little more precise. The interpretation he said he'd want from everyone was that it means $1,000 to the party in total for one candidate, and not one in each riding. I agree with you totally that if it means $1,000 per candidate, then the whole purpose of the bill and what we're talking about is just rendered useless and of null effect.

I would hope that is the correct interpretation. I think maybe, when you're looking at the actual wording of the bill, if there's any way you could get the justice department to sharpen up that section to make absolutely certain what it means, it would be a good idea.

[Translation]

The Chair: Michel, I believe Miguel would like to add something.

Miguel.

[English]

Mr. Miguel Figueroa: Yes. As I understand it, the hypothetical example dealt not so much with giving to candidates, but rather with bank branches making contributions.

I just wanted to add here to a point I made earlier with respect to the fundamental difference between corporations and unions. Corporations really are feudal institutions. Head office can direct: “Do this”, “Do that”—and it's done. As anybody who knows anything about the trade union movement knows, when you take a national union like CUPE National—the largest union in this country, with hundreds and hundreds of locals across our country—if the CUPE National were to direct a local anywhere in this country to “Do this”, they'd just say “Up yours, buddy.” It's not the way the trade union movement functions; there's a fundamental difference.

This is where this policy, which seems on the surface to be even-handed, really will have the effect of not curtailing corporate donations. They will get there—bet your bottom dollar—but in terms of labour, in terms of working people, this will have a serious effect in reducing their participation.

The Chair: Julian West, but very briefly.

Mr. Julian West: Very briefly, Mr. Chair, one suggestion I've heard on this is to have a shareholder rule, where a corporation wishing to donate would have to clear the donation through its shareholders, and presumably a union would have to hold a membership vote.

The Chair: Thank you very much.

We have Dick Proctor. We're going to conclude with Dick, but I note that Rick Borotsik did not have a second turn. We'll remember that; I want colleagues to recognize it.

Dick Proctor.

Mr. Dick Proctor: I wanted to go back to Mr. West, and also come back to this maximum. You too said the $10,000 was far too high, and you suggested, I think, $10,000 over a four-year cycle might be manageable.

A number of us share your feeling that it's too high. When Mr. Boudria, who's the minister responsible, was before our committee, his rationale for it is that if you took the $3,000 Quebec had introduced 26 years ago and factored in inflation, we wouldn't be far off the $10,000 mark. That was his rationale, and it was why I was asking Ms. Godin whether or not there was an impetus to change it in Quebec.

I just wondered, in light of what Mr. Boudria has said, what your response would be to it.

½ (1910)

Mr. Julian West: I believe Mr. Boudria on that occasion said he recognized the committee might feel that number was too high, and he invited you to search for a lower figure. I would encourage you to do that, for all the reasons I laid out before. I realize that in the 1970s and 1980s we had a fairly high-inflation regime in this country, but in the 1990s we did not, and I would really doubt that $3,000 has increased to $10,000 over a 26-year period.

As you noted in your exchange with Ms. Godin, there isn't any upward pressure from the parties in Quebec to move that $3,000. It probably is still around the right figure.

Mr. Dick Proctor: As a second point, I was intrigued with your idea about free time for all the parties—you mentioned the United Kingdom as an example of that—and also having material available that could be sent out by Elections Canada shortly before election day, with flyers representing the views of all the parties.

Could you just elaborate a little bit on the U.K. experience? For example, I'd be interested to know how much time they are allocated, and things of that sort.

Mr. Julian West: The United Kingdom in fact is having elections tomorrow for the Scottish Parliament and the National Assembly for Wales—their proportional representation elections. Also, many local elections are taking place there. I wasn't there for these, but I have been in the past, for some of the European Parliament elections. We get quite colourful, full-colour flyers prepared by the various parties and then distributed at government expense. It's a one-time drop during an election campaign. My understanding is it goes to every candidate at every level of election.

With regard to the TV broadcasts, what makes these broadcasts important is that paid TV advertising is completely banned, so the only time you see the parties on television is either on the news or on these one-time free broadcasts over a one-week period. They run at six o'clock, which is the time the national news normally comes on. If you switch on looking for the news, instead what you get is either a five-minute or a ten-minute program, and the news starts late.

The first thing you get is a free-time broadcast from a party of the day: the Liberal Party, the Labour Party, the Conservative Party, the Green Party, the Scottish Nationalist Party. Because this is the one time they present themselves on television, it also generates a lot of ancillary interest. You'll find that the commentary in the newspaper the next day is all about whether the Labour Party's spot was effective compared with the Conservative Party's.

Can I just say, I think it's particularly apropos to look again at the allocation of broadcast resources to parties, because the present statutory regime has not been followed for ten years. Every year we go through an allocation exercise with the broadcast arbiter, and he rejects the statutory formula year on year and gives something that is more generous to the parties outside the House of Commons. Perhaps legislation needs to recognize that the statutory formula does not go far enough towards equality, and a new regime should be looked for.

The Chair: Dick, thank you very much.

Colleagues, on your behalf, I'd like to thank the witnesses. I'd like to thank Julian West of the Green Party of Canada; Miguel Figueroa of the Communist Party of Canada; Jerry Rice and Tom Jarmyn of the Canadian Alliance; Paul Hellyer, leader of the Canadian Action Party; and Lorraine Godin, who is the chief agent, and Grégoire Bérubé, who's the director general, of the Bloc Québécois.

Grégoire, I want to thank you particularly for your contributions. Grégoire, your calm demeanour during these hearings has been a source of strength for me personally.

Thank you all very much.

Colleagues, we're going to suspend for a few minutes. We will resume in two or three minutes.

½ (1914)

½ (1922)

The Chair: Colleagues, perhaps we could resume.

We're continuing from the previous panel. The order of the day is Bill C-24, an act to amend the Canada Elections Act and the Income Tax Act (political financing).

I'll read the names of our witnesses this evening in the order they are on the agenda.

For the Liberal Party of Canada, we have Terry Mercer,who is the national director, and Eddie Goldenberg,a senior policy adviser.

For the Marijuana Party, we have Hugô St-Onge,who is the chief agent of the Marijuana Party.

For the Marxist-Leninist Party of Canada, we have Anna Di Carlo. Anna, you're welcome. And we have Diane Johnston, also of that same party.

For the New Democratic Party, Jack Layton,the party leader, is not with us, but we have Chris Watson, who's the federal secretary, and Éric Hébert, who is the assistant federal secretary. We welcome you both.

For the National Alternative Party of Canada, we have Gilles Lavoie, who is the party leader. Gilles, bienvenue ici.

For the Progressive Conservative Party of Canada, we have Irving Gerstein, who is the chair of the PC Canada Fund, and Paul Lepsoe,the legal counsel.

I know many of you were here earlier, but I will describe the procedure again.

You each have five or six minutes. If there are two of you, the five or six minutes are shared. We are glad for you all to participate in the questions and answers. We will go through all of the parties in the order I've read them here, which is alphabetical order by party. At the end of that time, we'll have the questions from the members of the committee.

Perhaps we could begin with the Liberal Party of Canada. The spokesperson is Terry Mercer, the national director.

Mr. Terrance Mercer (National Director, Liberal Party of Canada): Well, thank you, Mr. Chairman. As always, it's a pleasure and an honour to appear before your committee. I think this is the third time that I've appeared as national director of the party, and I want to thank you and all the Canadian members past and present for their warm and courteous reception. I appreciate it.

Bill C-24 is a major piece of legislation that I think goes a long way to address the issues of transparency, openness, and accountability. The Liberal Party supports the principles of this bill. This support is widespread, and indeed it was a subject of a resolution of our national executive last weekend in Toronto. That resolution affirms our support for Bill C-24, but it addresses the need for an internal party review and a resolution of how money in the future will be shared by all those levels of the party--ridings, provincial and territorial associations, and the national level of the party. I suspect that all parties that are structured as federations are finding themselves engaging in similar internal debates.

We all agree that government, this bill, and Parliament cannot address these internal problems, so we have set up an internal committee that will review all money collected and received in the name of the Liberal Party. And this is distributed among ridings, provincial and territorial associations, and the national level of the party.

It is hoped that the work of this committee will be done very quickly, because when this bill comes into effect on January 1, 2004, we need to be ready to implement our plan.

The dramatic shift in how we raise money will require a retooling of all of our fundraising products. Included in our list of products would be our very successful leaders dinners, our direct mail program, our giving clubs, our giving program, and our Internet fundraising campaign.

This is good legislation, particularly for open riding associations. Since the national branch of the party is no longer in the corporate or union fundraising business, the field is wide open to the riding associations to collect money from those two entities up to, of course, the limit of $1,000.

Full disclosure and the banning of unreceipted funds are long overdue. I know there will be a best-seller from Elections Canada in the spring of 2005 when they publish the first reports from all riding associations across the country. For years, all of us at this table have suspected what the other guy has. Now we'll all know for sure.

The increase in the tax credit of 75% of $400 is an extremely good move and good news for all political parties. Spending limits and nominations being lowered to 25% is also good news. The Liberal Party of Canada has had internal rules for a number of years, limiting the amount of money spent on nominations.

I would like to pay tribute to the National Women's Liberal Commission and our women's caucus for pushing to have the number moved from 50% down to 25%. We concur that this is a very good move.

One of the more popular changes in the bill is moving receipting responsibilities from one central body to the ridings. And I heard the discussions earlier when a number of other parties commented on it as a very popular move.

I do offer a word of caution. As a person who has worked with not-for-profit organizations all of my adult life, in a capacity of either a senior fundraiser or as an executive director or manager, I know the value of the volunteers who make our parties work. We have to be concerned that we will now have thousands of receipt books potentially in the hands of untrained volunteers.

I trust our volunteers. I hope you trust yours. Volunteers are the backbone of everything we do. Remember, unlike charitable receipts, political tax receipts are worth a lot of real money. It's 75¢ on the dollar and it's a tax credit, not a deduction that filters through your income tax. It's right off the bottom line. So the misuse of one book by one of our volunteers in any one of our parties will taint us all.

½ (1925)

So I'm very nervous about this, as someone who's managed millions of receipt books over the years. Hopefully no one will make a mistake, but the control of receipts may become an issue in the future, either as you go through this legislation or as we review its effect in a couple of years' time, after we've gone through the first of it.

Mr. Chairman, as representative of the party that has proposed this bill, I wouldn't purport to take a lot of the committee's time in the presentation. I'm anxious to hear what my colleagues from the other political parties have to say, and obviously I will entertain any questions of the members of the committee.

Thank you.

The Chair: Terry, thank you very much.

We now go to the Marijuana Party, and it's Hugo St-Onge.

Hugo, we're in your hands.

[Translation]

Mr. Hugô St-Onge (Chief Agent, Marijuana Party): Hello.

I have been actively involved with political parties, including the Bloc Pot, for five years now. Indeed, I am also the political leader of the Bloc Pot in Quebec and I was also the chief agent for the party at the provincial level, and I have experience with [Editor's Note: Inaudible] allowances. In my presentation, I am going to speak to you about my experience in Quebec.

Firstly, on reading Bill C-24, what really struck me, and what annoyed me the most, is that although some have said that René Lévesque's legacy was being continued, only certain aspects of it have been taken up and nothing has been done to improve upon it. There are things that could be done better, that is inevitable.

Firstly, there is the bureaucratization, something which I am seeing a lot of with all the additions. It feels as if they want to impose upon me the way in which the Liberals conduct their leadership races, as if they want me to operate in the same way that they do. We have a different way of doing things, and it would be virtually impossible to respect certain elements of this new bill.

Thirdly, another point which is of particular interest to me is the provision pertaining to contributions made by businesses. We must face up to this issue because, whatever shape or form the legislation takes, businesses will, inevitably, make indirect or hidden contributions of which we are not aware. In Quebec, this is the problem which is most commonly reported. It is a bit like a bloc of Swiss cheese: it is easy to get through it. So for me, completely banning such contributions would be tantamount to burying our heads in the sand.

Businesses, corporate entities, are major political players because, as everybody here well knows, money governs politics. Political inequality has more to do with businesses and the actions of economically powerful stakeholders than political parties. For me, therefore, it is more a case of keeping an eye on what they do than preventing them from doing it, because it would be impossible to stop them from acting as they do. In any case, they have all the power. Under common law, which, in a way, set the stage for all of this, corporate entities do not have the right to vote, but probably have more influence than the majority of Canadians.

Another thing: what is missing in the legislation, in my opinion, is a reference to handing around the hat when celebrating a political event. As far as I know, handing round the hat to collect money is something which is only done in Quebec. I do not understand why it is not done elsewhere. I think that it is a fairly effective way of doing things, especially for voluntary contributions to small parties such as our own where events rely on voluntary contributions, without forcing anything on anyone.

This brings me to section 404.4 which stipulates that a tax receipt must be given for any contribution of $10 and more. If that is the road we choose to go down, I think that Elections Canada or the CCRA should supply the receipts. That is the way that it is done in Quebec; it is the Chief Electoral Officer who gives out the receipts. In this way, the simple act of receiving a contribution from a constituent is far simpler, for the very reason that it looks more like a government document, although I have to say that our own receipts are quite lovely.

As for the $10,000 limit, I believe that, rather than banning contributions from businesses, it would be preferable to have limits. Under the current legislation, banks can easily give the same amount of money to two or three parties so that they do not have to take any chances because, obviously, regardless of which party is elected, banks wish the result to mean good news for their profits.

My other point is the issue of $1.50 per vote. Seriously, if we had 301 candidates, or 308 with the new map, clearly, we would pass the 2% mark, but that is not necessarily our objective. We feel that this 2% is unfair for all those parties who will not reach it. Is a vote for the Marijuana Party not a vote? Is there not a real person behind that vote? A person who has made that choice? But such a choice would not be respected with the way in which monies will be redistributed.

½ (1930)

I think that this is a blatant lack of openness, transparency and integrity. Rather than involving more people and broadening the diversity of the political spectrum, this will limit the emergence of a small party, of new ideas, of things that are often more important than giant elephant steps.

Things don't work exactly the same way in Quebec. It works by 50¢ increments, and we don't receive 50¢ per valid vote, but 50¢ on the total number of voters and then that amount is divided by the number of valid votes. So for the last election, that increased the amount from 50¢ to 72¢ per vote in reality. There's a sort of statistical distortion at play here.

With regard to the 75% increase in the tax credit, up to $400, I think that's an excellent initiative. I have no objection to that.

The last point that affects me is the appointment and training of returning officers. I really believe that they should be appointed by the Chief Electoral Officer and be subject to competition, that is a public appointment, more or less as is done in Quebec, where there are open appointments and where people propose the names of certain individuals. After that, there's a competition to determine who will be selected.

That's all. I thank you for having taken the time to listen to what I and the Marijuana Party had to say.

½ (1935)

The Chair: Thank you very much, Hugo.

[English]

Our next witness is Anna Di Carlo, the secretary of the Marxist-Leninist Party of Canada. Anna, I'm assuming it's you who is presenting.

Ms. Anna Di Carlo (Secretary, Marxist-Leninist Party of Canada): Yes.

I'd like to thank you very much for inviting us here. One of the things we'd like to point out is that we appreciate very much the format you've used; it's not very common in this society that all of the registered political parties are at least superficially given equal standing. This is a very good initiative, we think.

I think it's well known that the problem of undue influence in this society is very serious. When the Lortie commission conducted its surveys, it found, I believe, that 85% of the population believed that undue influence was a really serious problem, that people with more money in the society controlled government or exercised more control over government. But I think it would be wrong to only look at that side of the equation and think that the only issue is how contributions are made and so on.

The other side of the equation is that people with no money, or people with little money, feel very much that they have no say in this society. I think this is a problem that has to be put in the forefront when we're looking at the electoral law. We think that if the electoral law doesn't address the most central problem right now, that the vast majority of people feel marginalized, feel completely out of the decision-making process, that low resolution is going to be found to the legitimacy crisis that party financing is facing right now.

One of the things that emerges is that the political parties in the House of Commons are basically saying to the electors that if they are not allowed to depend on corporations and trade unions, if they are not allowed to get their support from those who convey the appearance of undue influence, the electors are going to have to fund the bill, are going to have to pay through the teeth to make them look clean. And this will not solve the problem. It's a very serious problem that's being raised.

When the Barbeau commission conducted its first-ever study of election financing in Canada in 1964, the problem that emerged then is the same problem that's being dealt with now: that political parties that function as election machines cannot survive without depending on large corporate donors or large trade unions. At the time it was found, for example, that 300 to 400 corporations were financing the Liberals. The same was the case with the Conservative Party. So they proposed then that we should have public subsidies and we should have tax credits so as to broaden the base of support for the political parties.

Thirty-eight years later, less than 2% of the Canadian population of electors has anything to do with a political party in Canada. It is a very serious problem we're talking about, so I think we have to broaden the discussion.

What we would like to start with is just the issue of public funding; we would like to give our views on that. We do not believe that political parties should get a penny of public funding. We don't agree with the 50%. We don't agree with the 22.5%. We definitely don't agree with the annual allowances. We don't agree with the election reimbursements. We think it is wrong to equate funding of the electoral process with funding of political parties. The fact that political parties dominate the process right now is part of the problem, and to entrench it in law is going to aggravate the problem.

For example, if Bill C-24 goes through, it will actually put into the electoral law that by virtue of the limit on nomination expenses at the constituency level, the people in this society who have the right to select candidates are 2% of the society. It will be a political elite in Canada who can select the candidates. If you can't have control over who the candidates are in this country, then what kind of control do you have over who will end up in government and over what their mandate will be? This is one of our most serious problems, that people feel that elected representatives are obliged to political parties and not to their constituents.

We think that money should be spent not to finance political parties but to finance the electoral process. We think this could be done by setting up commissions that actually oversee the whole process of selection, where anybody who wishes could come forward, including a member of a political party or the candidate of a political party, and the constituents would be the ones who decide.

½ (1940)

We want to make some other points, if we can. We think public subsidization is raising a real conundrum and political parties in Canada are being made more and more the target of legislation. We think the state has no business targeting this, that it's fundamental that a political party should be allowed to do what it wants to do in a country, unless it intends to break the law. Otherwise, how it organizes itself, whether or not it organizes itself as an election machine or a political party that has other purposes in life, is a matter of personal conscience, of political conscience, of freedom of association. Right now, the electoral law says you have to be an election machine.

We are opposed, for example, to limits being placed on how much a person can contribute to a political party. If we, for example, who carry out broad day-to-day activity--we aren't an election machine, we don't view ourselves as that--if we want to build, say, a school in Canada that will take up the task of educating Canadians on how to participate in government, and called on our supporters to give large contributions, we would be told that we can't, that it's against the law, that we're going to exert undue influence in the society. It's a bizarre scenario.

The final point we'd like to make is that we think it's a very self-serving approach to this problem that will very much aggravate the problem in Canada. Right now, from our work we've discerned that a lot of Canadians are not even aware of the level of public funding that political parties get right now. If this were to go before the Canadian public, I would defy any party here to stand up and say the Liberal Party should get $45 million every four years in an electoral cycle. I defy any party here to do that, before the public.

Thank you.

The Chair: Thank you very much.

So you know, and people watching know, we have been told that the present level of funding is about 60%. So I hear.

Ms. Anna Di Carlo: Is about what...? I'm sorry.

The Chair: It's about 60%. I was giving a figure to the point you made.

Ms. Anna Di Carlo: Yes, yes. I know what they are now.

The Chair: Your point was that people don't know that. I'm saying that we've been told it's about 60%.

Ms. Anna Di Carlo: Oh, is that right?

The Chair: Yes.

We'll now go to the NDP, Chris Watson and Eric Hébert. Chris, it's you, I think.

Chris Watson.

Mr. Chris Watson (Federal Secretary, New Democratic Party): Thank you very much. We're very pleased to be here to participate in this discussion.

The NDP is quite pleased to support this bill, the spirit and the direction of the bill. It's about getting the influence and the perceived influence of big money out of politics. That's a good thing, and we think it will be welcomed by Canadians across the country.

The idea that political contributions should come from individuals, should be limited to individuals, who are the voters, the electors in Canada, is a positive step. I think we are all quite aware of the need to address the cynicism that seems to have grown in recent years in Canadian politics, and it's certainly something evident in the declining voter participation. We don't think this bill is going to solve all of that problem, but we think it's a step in the right direction. It's an important contribution to that.

The NDP is a party that gets, roughly speaking, 3% of its contributions from businesses, about 27% of its contributions from trade union organizations, and about 70% of its contributions from individuals. So about three-quarters of the money that the party raises comes from individuals.

The bill will have an effect on us. It's a challenge for us. It's a challenge for all the parties. It's our view that it's a challenge worth rising to.

At the same time, one of the earlier presenters noted that it's difficult to raise money. I think the addition of a measure of public financing is an important component of this, and we support that.

The debate that is shaping up around the bill seems to be largely around whether or not it's appropriate to remove corporate donations and trade union donations from the picture. The NDP thinks it is. It's a good step. It has been a little hard for us to read exactly where the Liberal Party is on this. The government has brought in the bill, but as we all know, Mr. LeDrew, who I'm disappointed isn't here today, seems to have another take on it. But perhaps his friend Mr. Gerstein is going to speak on his behalf, as they seem to have been doing in the newspapers. I don't know.

I just want to read briefly a quote, actually from Mr. LeDrew, that represents exactly the kind of problem that I hope we will overcome with the bill. He says:

Indeed, corporations should have their opinions on public policy questions heard by the government. To do otherwise would ensure that public policy would only be influenced by individuals and special interest groups, which would create an imbalance in public discourse.

In our view, that's not the best way to look at things. If it were the individuals in Canada, the voters of Canada who had the principal influence on our politics, I don't think we would complain about that.

We have a couple of concerns. We are concerned about the possibility of $1,000 of contribution from corporations or trade unions. We could probably debate for years whether $1,000 is an appropriate amount or should be a little less or a little more. Frankly, it's insignificant, and I think it would make the bill cleaner to just do away with that. If we're saying contributions should come from individuals, make it so.

There's clearly going to be a need to control third-party spending. We know that issue is, to some degree, working its way through the courts. But if third-party spending in Canada is uncontrolled, the positive impacts of this bill may well be negated.

We are also concerned that the bill had better address the issue and the role of trust funds to ensure that those don't become the mechanism to circumvent the bill. The point has been raised, and I'll repeat our concern--Mr. Proctor spoke to it earlier--that the $10,000 limit on individual contributions is too high. We think it would be much better brought down to $3,000.

½ (1945)

We also think it's very important that the $1.50 per vote in public financing needs to be indexed. At the moment, that seems not an inappropriate amount, but as the years go by, none of us can be certain what will happen with inflation rates in Canada. I think it would be very important to add indexing to that.

My colleague Mr. Hébert will have a couple of comments, and then we're done.

[Translation]

The Chair: Mr. Hébert.

Mr. Eric Hébert (Assistant Federal Secretary, New Democratic Party): Thank you.

I simply wanted to underscore that when we're talking about indexing the $1.50, that's very important, because the bill as drafted already mentions some indexation of contributions and a maximum for contributions. So in one sense, that would bring that issue back to the fore.

I also want to point out one thing that has already been raised here, that is the issue of volunteers and the work given to local volunteers, as well as the concerns we may have regarding the capacity of ridings to issue tax receipts and what that means for how these people will work.

That's a major concern for us as well, and I'd like to put that on the table.

½ (1950)

The Chair: Thank you very much, Eric.

Our next witness is Gilles Lavoie, Leader of the National Alternative Party of Canada.

[English]

Mr. Gilles Lavoie (Party Leader, National Alternative Party of Canada): My name is Gilles Lavoie. I'm the leader of the National Alternative Party of Canada, which is a political party recognized over a year ago by Elections Canada.

As a party, our first goal is have real MPs with the free right to vote, and our second goal is to be a real national party by opposition to regional parties such as the Bloc Québécois.

Our recommendations regarding Bill C-24 stem from our strong belief that if democracy is to subsist, we must have the necessary means for its expression and its exercise. The fact that a relatively new party like ours is invited to participate and to convey its views on Bill C-24 before this committee proves undoubtedly that we live in a vigorous and open democratic society.

Democracy in this world is a scarce commodity. We must maintain and even improve the means to keep it alive and healthy.

[Translation]

It is in a spirit of allowing the exercise of democracy and allowing democracy to express itself that we are making recommendations on the funding of political parties.

First of all, we find it rather inconceivable that a distinction be made between a registered party and a eligible party. There maybe people who don't know the difference. Whether we are eligible or registered, we've done exactly the same legwork, we fulfilled the same requirements and we are recognized by Elections Canada. The difference between a party like ours, which is only a year old, and registered party, is the registered party has already run at least 50 candidates in a general election, which is obviously impossible when a political party is starting out, especially if it's immediately after an election. We could end up not being included in this bill for four years.

So we're wondering why there are two types of political parties set out here. When we've met the standards, when we followed all the steps, we should have the same status as registered party under the law. To us, this is an important point, because if it's not settled it will mean that four or five eligible parties and all the new parties that are created in the future will never be included in Bill C-24. So that's quite a serious problem to us.

For my part, I ran for election twice and I was entitled to a refund of candidate expenditures and I had the right to issue receipts to those who gave me money, but only for my election campaign, which means that in between elections, a party like ours cannot solicit any contributions. If it does so, donors are not entitled to any tax credit. So that presents a serious problem because the act only refers to registered parties whereas one third of all parties are not yet registered because they have not yet run 50 candidates, simply because there has not been an election yet. So that presents a difficulty. So the first thing we would say is that all parties recognized by Elections Canada should be included in the bill and that should be the standard.

Secondly, we are in complete disagreement with this notion of $1.50 per voter based on the last election. What we would propose instead is an improvement in the fundraising system. Our view is that giving $1.50 per vote received during the last election does not necessarily reflect the mood of current voters. We've seen parties get 50% of the vote in 1980, for example, and four years later get 25 or 30% of the vote. But during those four years, they continued to receive the equivalent of 50% of the contributions. This is an aberration in the sense that there could be interesting parties, interesting ideas that emerge, but because of lack of funding, even though they may represent 10 or 15% of the population, they will be completely shut out, whereas money will be given to parties that really don't represent very many people anymore.

Instead of doing that, we suggest that the $1.50 compensation based on the last election be eliminated and that the method of collecting funds be improved. I've been through two election campaigns and I've noticed that people always hesitate to give $100 or $200. No matter how much we tell them that this is not a problem, that they shouldn't worry, because we know that these are people who are able to give us that amount, no matter how much we tell them that they will get a $75 tax credit when they file their tax return, they always answer the same thing, namely that that does not put the money in their pocket now.

So we are suggesting that we forget about this tax credit and create a new system. In other words, we would reverse this arithmetic. We would tell people to give us $25 and that the government would top that up to $100 by adding $75. This would not be a tax credit at all, which would mean it would be much easier to collect funds. I am convinced that even the major parties could easily make up for their losses, because they are being deprived to some extent of significant contributions from major corporations, or, in the case of the NDP, are seeing 25 or 20% of their funding cut off.

½ (1955)

The idea is really a very simple one. It wouldn't cost the government any more money. For every $25 somebody gives us, the government would contribute $75, which is what it does now. And that would probably solve the problem of political party financing. Moreover, such a system would reflect the electorate at the exact moment the funds are collected, because asking people for money is quite special, as Mr. Hellyer and others indicated. However, if money is given to parties systematically, people will sit down knowing that they will get their four or five million dollars a year in accordance with the last election. So things could move merrily along, with no problem. And really—

The Chair: Gilles.

Mr. Gilles Lavoie: —they don't represent too many people anymore.

All right, I'll conclude. It won't be long. I'll be quick.

The Chair: Very quick, please.

Mr. Gilles Lavoie: Yes.

Another recommendation consists in reimbursing half the spending of all candidates, regardless of the percentage, especially considering that independent candidates do not spend much. So we feel that someone who takes the trouble of running in an election should have the right to be reimbursed.

Lastly, to avoid an undue increase in costs, why not apply the same principle that Revenue Canada has with businesses? Once a year, we send in our balance sheets signed by an accountant; we don't send all our invoices and all our paperwork, that would be impossible. They take for granted that we are honest; so we propose that we do the same thing, to avoid the incredible costs that would generate for the bureaucracy.

The Chair: Gilles, thank you very much for this.

[English]

I'd like say to the other smaller parties that one index of the vitality of a democracy is the appearance of new parties. If you look at the history of this committee--not necessarily us, but in the last several years, the people who have been on it--it has done all it can to encourage the smaller parties. We mentioned the committee of Elections Canada, to which you all belong. We revived it. So there are a number of things. So we greatly appreciate your being here.

Our next witness for the Progressive Conservative Party of Canada is Irving Gerstein. We welcome you. Irving is the chair of the PC Canada Fund. With him is Paul Lepsoe.

Mr. Irving Gerstein (Chair, PC Canada Fund, Progressive Conservative Party of Canada): Thank you, Mr. Chairman.

I'm here as chair of the PC Canada Fund. Having raised funds for our party since the 1960s, it is from this experience that I discuss Bill C-24 with you today.

I believe strongly that Canada needs election funding reform. What Canada does not need is an incumbents protection act. The Prime Minister has stated that Bill C-24 eliminates loopholes and black holes, and creates a level playing field for all parties, ridings, and candidates. Ladies and gentlemen, I respectfully disagree. Indeed, what Bill C-24 ensures is an uneven, unlevel playing field for everyone. It is draconian; it is unfair; it is flawed--and not just on one assumption.

The first flaw is that it proposes that future funding be determined by past results. In fact it goes far to defining the financial future of a party by looking to its past. In other words, if the financial side of an election campaign were a 100-yard dash, I can hear the starter now--“Tories, you go to the starting line. NDP, take 15 steps behind. Alliance, start at the 25-yard line. Liberals, start at the 50-yard line. And by the way, you all have the same finish line!”

I can't understand why the NDP would support this concept, especially taking into consideration that in each of the years 1989 through 1992, they raised the most in political donations of any party in this country. To this you might counter by saying that money doesn't necessarily translate into votes. True, not always. In 1993 we raised the largest amount ever by the PC Party in Canada, $24.9 million, with Kim Campbell as our leader. But the one thing I've learned raising money is the truth of the saying “message creates momentum creates money”.

In 1975, the year Robert Stanfield lost to Pierre Trudeau, we managed to raise the princely sum of $1 million. Joe Clark was elected leader in 1976 and the tide began to turn. For the 1979 election, we raised $14 million. In 1984 we raised $22 million for Brian Mulroney. I leave it to you to calculate what financial resources Mr. Mulroney would have had based on the results of the previous election. My point is, funding a party's next election according to their last election is like getting a mortgage on your next house based on the value of your last house.

The second flaw is even more serious. The funding formula as proposed is totally stacked in favour of the incumbent. From no limits to zero limits for corporate donations at the federal level, at a time when the opposition is divided in four, creates a competitive advantage for incumbency that is bigger than at any time in Canada's history. Remember our history shows that all parties in Canada at one time or another have had the privilege of being a minority party.

American political parties are eligible for general election funding if they receive 5% of the vote in the prior general election. Once qualified, each party receives an equal distribution of funds. This gives mainline parties access to funds and keeps funding of fringe parties to a minimum. The system isn't perfect, but it would work in Canada, where in recent years none of the traditional parties has received less than 5% of the popular vote.

Now, some Canadians believe that having a political system that's entirely funded by the state is an example of enlightened reform. My view is--and this is the third serious flaw--that something is very wrong if democracy has to be funded overwhelmingly by the state.

I want to relate the proposed bill to current Tory revenue streams, which I suspect mirror closely those of the Liberal and Alliance parties. Corporate donations, which account for 25% of our revenue stream, will be virtually eliminated. Special events, which include dinners, account for 35% of our revenue, but special events are 90% supported by corporations. Most of this revenue will also disappear.

As for individual donations and direct mail, which make up the balance, the jury is out whether these sources of revenue will improve or reduce, as Canadians may take the position that they are already contributing with their tax money to support government political grants to the party of their choice, not to mention the parties not of their choice.

¾ (2000)

The fourth and final flaw that plagues the current proposal is its $1,000 limit on corporate donations. A party must have the ability to take advantage of message and momentum through corporate and special events revenue. I suggest a $10,000 cap on corporate or union donations to each political party. View it as symmetry with individual giving.

Keep in mind that there are fewer individuals than corporations in Canada who will give $10,000 to a political party. Couple this with timely and complete public disclosure, and being the world's highest per capita users of the Internet, it should be easy for Canadians to have access to information on campaign financial transactions within hours from the time they take place.

You see, I believe that even with this legislation, corporations will not stop being interested in politics. The reality is that severe limits or the elimination of corporate giving will drive this funding to other places, often less transparent than donations to political parties. Third-party advertising, now before the Supreme Court, political action committees--PACs--or other so-called underground activities are all foreseeable and will put a new meaning on the opening of Pandora's box.

In America, corporations have not been allowed to donate to federal political campaigns for many years, but can anyone say with a straight face that corporate funding doesn't influence Washington? The deeper you drive it down, the more the head it raises is ugly.

There is an answer. Canada needs a reform proposal that is reasoned, fair, and transparent. I suggest the government refer to the Lortie commission report on electoral reform of 1991. What is most significant about this report was the process it followed. Unlike the current proposal, the Lortie report received not only input from all parties, but buy-in from all parties, and was unanimously supported by all members of the bipartisan commission, as opposed to what the current proposal seems to be meeting with, which is substantial opposition from most parties, including, as I read, Mr. LeDrew, president of the Liberty Party, the Liberal National Council, and a number of Liberal caucus members.

Heaven knows, Canada deserves electoral reform, but only if Bill C-24 is itself reformed first.

Thank you very much.

¾ (2005)

The Chair: Thank you very much.

On behalf of all my colleagues, I want to thank all the witnesses. I know many of you were here before.

We have a procedure now of going around the table. We have five or six minutes. The answers and the questions are part of that time.

The list I have is Ted White, Joe Jordan, Michel Guimond, Jacques Saada, Dick Proctor, Geoff Regan, Rick Borotsik, and then Rodger Cuzner.

Mr. Ted White: Thank you, Mr. Chairman.

I'd just like to mention to Ms. Di Carlo that, as you're probably aware, the Canadian Alliance supports your party's position in terms of condemning public funding of political parties this way. I also agree with you that if the public were able to come here and vote directly on this bill, they would soundly defeat it. There's absolutely no doubt in my mind.

That having been said, I have to live with the reality of the fact that this government will probably push this bill through, so I'm going to come back to you on second round. My first set of questions is going to be to Mr. Mercer.

It was suggested by Mr. Rice of the Canadian Alliance--I think you may have been here while he was sitting in the chair--that all donations should perhaps go through national office. That would address perhaps the receipting problem you had raised yourself in your own presentation, because it puts it in the hands of a full-time professional, somebody who is paid to do the job, instead of a volunteer who may quit in the middle of the cycle or may occasionally abuse his position.

Secondly, I also wondered, because of all the reporting requirements at the riding level--if you don't agree that we should try to move all that receipting to national office--if we're stuck with reporting at the riding level, should we limit reporting only to amounts of, say, more than $1,000? That would reduce the reporting requirement significantly.

Mr. Terrance Mercer: Let's go backwards. I think all donations should be reported. I think we need to have reporting on everything. That's one thing I really like about this bill.

With respect to centralized receipting, in your party, I understand the structure is that you're not a federation. We are. I think the Conservative Party is a federation. It's a little more complicated. We have a third level that gets in between. We have the national level and then we have the riding level, but we have a very important level in the middle, our provincial and territorial associations.

Perhaps we should think about giving the ridings the ability to assign the receipting responsibility to somebody who may be centralized, who could offer them more professional services.

As I mentioned in my opening remarks, I am nervous about this myself, personally and as a professional in this business. This is where we could all suffer. If one person makes a mistake, we'll all be painted with the same brush, as happens in this business all the time. I think it's worth the try, though. We've not had decentralized receipting.

The other option that could be considered, and I'm not necessarily suggesting it, is that perhaps national parties could assign receipting to an agent at a provincial or territorial level, which is a structure we've had in place over the years. We've evolved through to one central receipting place now. We're now going to go decentralized, with 308 ridings plus our own office here in Ottawa, with none at the provincial or territorial level.

¾ (2010)

The Chair: Ted, thank you.

Anna Di Carlo has a comment.

Ms. Anna Di Carlo: I did want to make a comment on this issue of tax receipting. If it goes through, of course we would like things to be as simple as possible. Our preference would be to have national central collection of contributions and issuing of receipts.

I wanted to make one point on this issue of freedom of association again, right to privacy and so on. I think it's a conundrum that should be looked at, should be thought about carefully. This political process started eliminating corruption by introducing a secret ballot so votes couldn't be bought and nobody could be coerced. A secret ballot is a secret ballot. My mother taught me that you don't tell anybody who you vote for. That's a most private thing.

Now we've come to a situation where anybody can go onto the Internet, plug in your name, and if you contributed to a political party, they know your political persuasion. I think that's one of the other problems related to this increasing regulation of political parties, the violation of rights that really a liberal democracy, any kind of democracy, should consider to be very precious.

The Chair: Okay.

Ted White.

Mr. Ted White: Thank you.

Actually, I did want to go into a question for you, Ms. Di Carlo, but I think I'll leave it until the second round rather than get into it.

Thank you for offering me an extra minute, but I'll pick it up on the next round.

The Chair: The order will be Joe Jordan, then Michel Guimond, and Jacques Saada.

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

To the witnesses, I just want to thank them for appearing here tonight. We're getting into very interesting aspects of this discussion. If I had my way, I might actually suggest that you people discuss it among yourselves, because I think that might be a little bit more interesting, but I'll try to serve that intermediary role, if I can.

Tom Kent, a professor from Queen's University, was here, certainly somebody who's given a lot of thought to this issue. He was very concerned about the formula. Independent of how one might feel about the direction this is going, he was very concerned about the formula being based on the last election, and the barriers to new parties.

I echo what the chair has said. I think regardless of what we end up doing, the big parties will take care of themselves. They'll figure out a way to minimize the impact of this.

One of the personal goals I have is certainly to try to minimize the real or perceived situation of money buying influence. I also want to see barriers to new parties removed. I guess we spend a lot of time talking about the supply side. I'm wondering if maybe we should look at the demand side.

Do you think we're allowed to spend too much now on elections? Should we look at addressing the limits that you're allowed to spend on a riding-by-riding basis? If we could eliminate the demand for money, we might eliminate the need to police how money flows through the system.

The Chair: Anna Di Carlo.

Ms. Anna Di Carlo: I would like to go back to the proposal that Julian Gray raised—Julian West, I'm sorry. We've discussed it quite a bit.

The Chair: It's the Gray Party, not the Green Party.

Ms. Anna Di Carlo: We've discussed it quite a bit. You see, our opinion is that a lot of the money is not only too much, but it's grossly wasted--grossly wasted money. In the last election, I'm sure everybody will remember, on CTV, I believe, they ran all of the political party advertisements in a one-hour stretch. And it just made a mockery of the concept of informing electors, of having any kind of political consciousness raised in this country. It was just boom, boom, boom like that—Joe Clark's face, this face, that face. It was just bizarre. And that cost a lot of money.

We think that one of the things that would really go far is to have a national commission, whether it's Elections Canada or some other body, that takes the responsibility to give every elector one mailing; that would give, let's say, three pages, four pages, whatever, to every political party. It goes to everybody.

On broadcasting, we think the current allocation formula has to be changed. Chief Electoral Officer Kingsley has recommended that. That's one of the things we think is increasingly going to be subjected to rights violations.

¾ (2015)

The Chair: It's Irving Gerstein, and then Terry Mercer.

Mr. Irving Gerstein: Mr. Jordan, in my view, the cause has not yet evolved, whether it's a hospital, university, museum, political party or leadership, for which raising money is easy. And the answer, when you see all of these different campaigns, is it's basically survival of the fittest.

The fact of the matter is the donors are the ones who speak. They don't have to be legislated. If you don't have the right message, you'll get no momentum, and trust me, you'll get no money. Unless you want to run yourself into enormous debt, the answer is self-fulfilling. It doesn't have to be legislated.

Good people with good ideas will raise money, as any institution knows. But you have to be good at it, and it's tough work to go out there and get it.

The Chair: Terry Mercer.

Mr. Terrance Mercer: I do agree with what Mr. Gerstein has said, that the donors will decide. I always like to quote my mother, who was a donor to my party. And my mother is a direct-mail donor. She responds to direct mail—only to the Liberal Party, so don't write her name down. She often says to me, “Terry, would you please stop sending me letters asking me for money.” I said, “Well, that's simple: you stop giving me money and I'll stop sending you letters.” And that goes to what everybody was saying. It's very real.

Do we spend too much money on elections? I don't think so. I think if you add it collectively together, it is kind of a scary number. When you take the 12 or 14 political parties and add all the money that we spend, it is a scary number. But I don't know many ridings across this country that waste their money in trying to elect their candidates. I certainly know that our party tries not to waste any of the money we spend in trying to promote a national campaign.

It's an expensive business these days. Before we start a national campaign for a national party, we have to go out and hire a plane and you have to start laying down a million dollars there and a couple of hundred thousand dollars here. Before you know it, before you even start to knock on a door or put an ad out, you've spent a lot of money. Unfortunately, as the limits go up, so do the expenditures. We keep bumping up against our limit, but I don't think we waste money.

The Chair: No, you don't.

It's Michel Guimond, Jacques Saada.

[Translation]

Mr. Michel Guimond: Thank you, Mr. Chairman.

My first question is for Mr. Lavoie, leader of the National Alternative Party of Canada.

In the note you gave us—you mentioned that your party has been recognized by Elections Canada for a little over a year. Is that correct?

Mr. Gilles Lavoie: Yes, that's right.

Mr. Michel Guimond: Were you a party before you were recognized? Were you a movement?

Mr. Gilles Lavoie: We had members so we examined how to become a legal party under the Canada Elections Act. We took all the steps necessary to become a party recognized by Elections Canada which means we did the same thing as a registered party, except that we do not have 50 candidates who ran for election before, so we are not a registered party. This means we are excluded from the bill.

Mr. Michel Guimond: I understand that nuance. How many members in good standing does your party have today?

Mr. Gilles Lavoie: Between 200 and 300, roughly.

Mr. Michel Guimond: I ask this because I'd like to get back to your second recommendation, which consists in replacing that $1.50 per voter. You are playing with the notion of the tax credit. Do I understand you correctly when I read “... we propose that when a voter gives $25, the government pay $75 to top up the amount to a total of $100”? Therefore, the government would put this money in the party coffers as a contribution.

¾ (2020)

Mr. Gilles Lavoie: That's right.

Mr. Michel Guimond: Do you realize that this could represent incredible amounts of money? The $75 tax credit is not a direct $75 disbursement by the government. It's a tax credit. The government is agreeing to forego $75 in taxes.

I've done a calculation here. Let's say that a party like ours, the Bloc Québécois, which has had up to 100,000 members, had a funding campaign and asked members to contribute $25. Well, $25 multiplied by 100,000 members is 2.5 million dollars, and then the party would receive 7.5 million dollars from the government, in addition to keeping de 2.5 million dollars in contributions.

You should look at Mr. Boudria's electoral report on the ins and outs of all this before getting all upset.

Mr. Gilles Lavoie: The fact remains that for the government it's the same thing. Whether the government returns $75—

The Chair: The chairman is still here.

Mr. Michel Guimond: The way seats are arranged in this room does not encourage... I'm not a contorsionist from the Cirque du Soleil.

The Chair: I know it's difficult, because you are all on the same side, but I'm here.

Mr. Michel Guimond: I have trouble addressing you and then turning this way. I can't do what people do in the Cirque du Soleil.

Mr. Gilles Lavoie: May I answer, Mr. Chair.

The Chair: Yes, Gilles.

Mr. Gilles Lavoie: We examined this issue this way: we considered that for every $100, mathematically, this would not change the cost to the government at all. An individual would donate $25 and the government would top that up with another $75.

Mr. Michel Guimond: No, no. You don't understand what a tax credit is. With a tax credit, the government is not spending $75; the government is agreeing to forego it.

Mr. Gilles Lavoie: Yes, but it is the same difference, since the government loses that money. It loses $75 because it has granted a tax credit on the tax which would otherwise have to be paid. What difference does it make? The government did not get that $75.

Mr. Michel Guimond: Sir, if the 200 or 300 members of your party are listening, they would say you are defending the indefensible. That is absolutely indefensible.

Mr. Gilles Lavoie: It is like people who say that there is a difference between a subsidy and a loan guaranty.

Mr. Michel Guimond: Mr. Chairman, my second question is for Mr. Mercer, who is here on behalf of the Liberal Party. Paragraph 405(1)a) of the proposed bill says:

No individual shall make contributions that exceed

a) $10,000...

You know what it says and I am convinced that you are familial with it.

I asked this question of professor Kent. Let's say a business, such as a paper producer or a bank, has senior managers, say 40 vice-presidents, assistant vice-presidents and executive vice-presidents across the country.

Would you agree with me that, under the current wording of the bill, these people could achieve indirectly what the bill does not allow them to do directly? The president of the bank could give one of his senior managers $10,000, who in turn would make a personal contribution of $10,000. Would the current wording allow for such underhandedness? I would like to know what you think.

The Chair: Mr. Goldenberg, you will have to be brief.

Mr. Edward Goldenberg (Senior Policy Advisor, Office of the Prime Minister, Liberal Party of Canada): I will be brief.

Mr. Guimond, I think that is exactly the problem which exists in Quebec today. It is possible. The bill contains provisions which would prevent people from doing indirectly that which they could not do directly, and there are fairly severe penalties.

Of course, the vice-president of a bank has the right to contribute $10,000 to a political party, but he does not have the right to be compensated by the bank for the contribution. But if that happens and if he is caught, he will have to face the penalties provided for under the bill. In drafting this bill, we tried to close the loopholes which were discovered in Quebec legislation, which is otherwise fantastic.

¾ (2025)

[English]

The Chair: Jacques Saada, then Dick Proctor, then Geoff Regan, and Rick Borotsik.

[Translation]

Mr. Jacques Saada: Thank you very much, Mr. Chairman.

Mr. Chairman, I have learned much more about political party financing in Canada this evening then I had learned over several years.

I have two comments, or rather two questions, which anyone may answer. However, the first question is fairly specific. Under the bill, any entity which receives public money must register and file a report. This would include riding associations, but it would also include, as far as we are concerned, a national party. Some parties are structured as federations. Some of that money will be transferred, in one way or another, to the provincial party wings. However, these provincial wings are not required to file a report.

Would it not make sense to also require the provincial wings to register, if a party so wishes, and if it is set up that way?

I will ask my second question and let the two witnesses respond.

This would address part of the problem with regard to issuing receipts for income tax purposes, because if a riding cannot do so, it can delegate this task to the provincial or territorial wing, if the party is so organized.

My second question is both philosophical and practical in nature, and it is addressed to anyone who has already spoken to the issue. Mr. Gerstein talked about the future based on past when we were discussing the basic rebate. I believe Mr. Lavoie also alluded to the matter. As for me, as a member of Parliament, I feel that, generally speaking, governments base their actions on a political horizon which goes no further than the next election. If instead of limiting... Of course, there are times when it would be nice to have a longer horizon, but if there is an election, certain pressing decisions are put off. Should the political horizon be further foreshortened, which would happen if the funding plan is applied over a shorter period, such as every year? Don't you think that a government's political outlook will be even shorter, because it will be based on fundraising, and that, as a consequence, political parties will be even more hard pressed to develop a long-term vision?

[English]

The Chair: Okay. Two questions. Anyone, just show your hand, if I could see here.

Yes, Paul Lepsoe, then Terry Mercer.

[Translation]

Mr. Paul Lepsoe (Legal Advisor, Progressive Conservative Party of Canada): I will just reply to your first question, Mr. Saada. I think that, on the contrary, the bill is already far too complicated. The idea of forcing the provincial wing of each party to register as well...

Mr. Jacques Saada: Sir, I was talking about giving each party the choice to do so or not.

Mr. Paul Lepsoe: One option, for instance, would be for the permission to issue receipts.

Mr. Jacques Saada: If a political party wishes to do so, do you think it should have the option to allow its provincial wings to also register?

[English]

The Chair: Paul.

[Translation]

Mr. Paul Lepsoe: Yes, but I think that the bill is already far too complicated and I have a big problem with introducing more levels. In any case, I did not quite understand the proposal.

The Chair: Thank you very much.

Mr. Mercer.

[English]

Mr. Terrance Mercer: As I said in my opening remarks, Mr. Chairman, I think this is a problem that is best left for the parties to decide internally.

I think the key thing here is that the money that enters at the riding level and the money that enters at the national level is properly receipted, recorded, and reported. How the Conservative Party of Canada distributes the money within the Conservative Party is I don't think of any interest to the rest of us—for example, if they want to fund the provincial wing of the party in a particular province. Same as in ours. I think we have a huge job ahead of us to get that done in our party, to realign ourselves because of this legislation.

I think it's very doable, but I also don't think it's the responsibility of government or Parliament to dictate that.

The Chair: We have time for another comment on this.

Chris Watson.

¾ (2030)

Mr. Chris Watson: Just on that last point, I think our view would be the same, that the parties should decide themselves internally how they distribute whatever revenue they receive.

The Chair: Okay.

Jacques.

[Translation]

Mr. Jacques Saada: I did not receive an answer to my second question.

[English]

The Chair: Second question, about tax receipts, do you think? Briefly.

[Translation]

Mr. Jacques Saada: No. I will try to rephrase it. There are on average four years between each election, which means that governments basically have to restrict their political horizon to those four years. But if you had annual deadlines for funding, don't you think this might further shorten the horizon for political action, for governments?

[English]

The Chair: A very brief comment. The chair's going to try to stop thinking, because whenever I think about something, it takes longer.

Is there a comment on that? No, I don't think we have a comment yet.

Mr. Jacques Saada: Thank you. I'm sorry.

The Chair: Oui, Eric Hébert.

[Translation]

Mr. Eric Hébert: I just wanted to say that I see where you are coming from and that this measure might further shorten the political horizon of the government and of political parties. That is why we do not have any suggestions with regard to changing the situation, and although we do not have a perfect system, if we have elections every four or five years, it would be a good idea to determine how political parties are funded. It may not be the perfect solution, but it is one way to address the issue.

The Chair: Thank you, Eric.

[English]

Again, on that, if you have any thoughts later, as on anything else, the committee is always very pleased to hear any views you have.

It's Dick Proctor, Geoff Regan.

Mr. Dick Proctor: Thank you very much, Mr. Chair, and thanks to all the presenters on this panel.

I want to ask each of the three parties that are represented here tonight that have members in the House to answer the following question. But let me preface by just saying to Mr. St-Onge that if he thinks the Marijuana Party is the only one that passes the hat at meetings, he's never been to a New Democratic Party meeting.

On that point, virtually all of the small parties in both panels, except for the Marxist-Leninist Party, have said that the 2% threshold or 50 candidates is too high a threshold. I would like to ask the Liberals, the New Democrats, and the Conservatives if they agree with that and think that we should look at lowering the threshold to accommodate better the smaller parties.

I'll start with Mr. Mercer.

The Chair: Okay, Terry Mercer.

Mr. Dick Proctor: No, you don't?

Mr. Watson.

Mr. Chris Watson: I don't think it is too high, particularly in a system where we're talking about public financing involving huge amounts of money. I think Canadians would expect that a party should be able to achieve a certain national threshold before it enters into that system.

But the concern about whether or not we close the door, if you will, to new political parties ever emerging is legitimate. I think there's another way we can think about that, and that is in the discussions that our party and some others are raising about the values of proportional representation as an element of political reform. I think that's the way to meet that concern.

Mr. Dick Proctor: All right, we'll come back to that.

The Chair: Mr. Gerstein.

Mr. Irving Gerstein: If there had to be threshold, I would say 5%, but my view is that it should not be publicly funded.

The Chair: Dick.

Mr. Dick Proctor: Thank you.

I want to come back to Mr. Watson, because I realize everybody had limited time, but part of your proposal deals with this business about the performance that Mr. Gerstein went on so eloquently about, about the results of the last election determining how much money you get in the next election.

The proposal, as I understand it, that you've put forward is to suggest that all political parties have certain basic expenses—turning on the lights, paying for rent, etc.—and that perhaps one way of looking at this would be to acknowledge that and then reduce the $1.50 proportionately, if I understand it correctly. Could you elaborate a little bit on that, Mr. Watson or Mr. Hébert?

Mr. Chris Watson: I'm going to have Mr. Hébert answer this.

[Translation]

Eric Hébert: In our proposal, Mr. Chairman, we say that it may perhaps be a good idea to require that a political party reach a 2 per cent minimum in order to qualify for funding. However, perhaps there should also be a basic threshold for political parties which do not garner a lot of votes in order that they, too, have access to a certain amount of funding. We do not really know what this minimum should be, but it would give a chance to parties which have had a bad election to receive funding allowing them to survive.

¾ (2035)

[English]

Mr. Dick Proctor: Yes. Merci beaucoup, Monsieur Hébert.

Finally, a question to Mr. Mercer. Mr. LeDrew, who we're all very sorry is not able to be with us tonight, indicated publicly several weeks ago that some corporations were saying to Liberal fundraisers that in effect if you don't want our money tomorrow, we're not going to give it to you today.

We note in the papers as recently as last night that Mr. Chrétien had a fundraiser. I think it was here in Ottawa, but it matters not. Would you say that Mr. LeDrew's comments about corporate donations drying up this year are accurate?

Mr. Terrance Mercer: I think last night's dinner here in Ottawa is an indication. We had over a thousand people in attendance, which is about the maximum we ever get in Ottawa, at $500 a person. That's in keeping with what we're doing. We have a dinner next week in Calgary where we're probably going to reach our target.

It's tougher out there for us in a couple of ways in the sense that not only are we trying to raise money, but we have three excellent candidates seeking the leadership of our party who are out there trying to raise money and indeed being very successful at it as well. We are competing with ourselves in that sense.

In talking to our fundraisers across the country, the feedback they're getting is that they are being asked a lot by a lot of people. They're not giving because of this legislation. People do mention the legislation, because it's obviously going to kick into effect and it will affect their budgets for years to come.

The Chair: Geoff Regan, and then it's Rick Borotsik and then Rodger Cuzner.

[Translation]

Mr. Geoff Regan: Thank you, Mr. Chairman.

I would first like to address comments made by Mr. Guimond, my colleague, who mentioned Minister Boudria.

I am convinced that if he had known that the Ottawa Citizen had published a retraction with regard to allegations made concerning the method of [Editor's Note: Inaudible] and the suggestion that that happened during the election campaign, he would not have said what he did.

That being said, I will move on to my question.

[English]

I'd like to ask all the panellists, in relation to Mr. Gerstein, you said the donors are the ones who speak. It strikes me that the currency of democracy ought to be votes and not dollars. In fact this is what we're trying to address here, that democracy is all about the equality of votes. When it's the donors who are the ones who speak, as opposed to the voters being the ones who speak, then it's those who can afford to give the most who speak the loudest.

I suggest to you, and I want to ask others for their comments on this, don't you think the currency of democracy should be votes?

Mr. Irving Gerstein: Mr. Regan, I believe it was Mr. LeDrew who made that statement, not myself.

Mr. Geoff Regan: You were quoting him?

Mr. Irving Gerstein: No, I believe he is the gentleman who made that statement.

Mr. Geoff Regan: You didn't say the donors are the ones who speak?

Mr. Irving Gerstein: No, I--

Mr. Geoff Regan: I thought I heard you say that.

Mr. Irving Gerstein: No, I didn't make that statement.

Mr. Geoff Regan: I wrote it down. I was sure I heard you say that.

At any rate, maybe others have comments on this question of whether the currency of democracy should be votes.

The Chair: Chris Watson.

Mr. Chris Watson: Whether Mr. LeDrew made that remark or whoever did, I think it's a powerful remark. That's what our comments were trying to speak to when we questioned the wisdom of a $10,000 individual limit and suggested that should be lowered. It is an attempt to even the playing field.

One of the values of the proposal here in terms of how the public financing--the $1.50--works is that it is essentially a voter-directed system, and if your party gets twice as many votes as the other party, you're going to get twice as many $1.50s.

I don't think that's a perfect system, but we have to find some way, and that strikes us as the best because it's saying the voters will determine it. As Mr. Gerstein has pointed out, the fact that a party in a given year raises perhaps even the most amount of money doesn't always guarantee them success at the ballot box--1993 being one example.

It's not perfect, but if it's based on the choice of the voters, I can't think of a better determinant in terms of how those dollars are directed.

¾ (2040)

The Chair: It's Eddie Goldenberg and then Gilles Lavoie.

Mr. Edward Goldenberg: Just very briefly, Mr. Chairman, because I agree with what Mr. Watson has said, I just want to add that we can't forget.... Effectively what you're saying is that when you vote for a political party, you're voting to give $6 over the next four years of taxpayers' money to that party. If you change your mind over the course of the next four years, this bill provides the incentive to give a lot of money individually to the political party you've now decided to support.

If there's a view that you want to throw a government out, chances are the individual contributions to the opposition parties are going to increase over that period of time, and I think that's very important to understand.

The Chair: Gilles Lavoie.

Mr. Gilles Lavoie: On the $1.50, what we think is it's not a good way to go about financing a party, because it's a reflection only of what percentage of the vote a party had at one point in time.

Normally we have four years before elections. So by using this system, we're telling the old parties they don't have to work any more, they don't have to get money any more, they're going to have their millions without doing anything. But two or three years later, maybe they're just about to lose the election, they're down, say from 50%...we've seen parties go from 50% to 20%. That means they're receiving money for voters they don't have any more. That's what I feel is contradictory.

The other way to get around it, as I said before, is to improve the way we collect donations, contributions, to make it easier to collect. As I said before, instead of giving tax credits to people who give $100.... When a donor gives us $100, he gets a $75 tax credit. But people hesitate, because they're going to get it in six, seven, or eight months, and that's--

The Chair: Je te remercie, Gilles.

Geoff Regan, for a comment only.

Mr. Geoff Regan: Well, I was going to ask how concerned these people were about an issue that was raised earlier, which is the burden on riding associations and whether they feel it's onerous. What reporting requirements exactly do they feel are onerous? But I guess I can't ask that question now.

The Chair: No, you can't.

Thank you.

It's Rick Borotsik. I would point out that Rick didn't have a second chance last time. If you want to take a little more time this time, Rick, feel free to do so.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

First of all, to Mr. Mercer, I learned a long time ago in politics not to believe very much of what I read in the newspapers. However, Mr. Mercer, I take it you are here representing the Liberal Party, is that correct?

Mr. Terrance Mercer: I am the national director of the Liberal Party.

Mr. Rick Borotsik: Okay, then I'm a little confused, because in one of the articles I've just read, Mr. Stephen LeDrew is quoted as saying that this particular piece of legislation is fraught with problems. You, on the other hand, said that unequivocally, it is good legislation. So you're speaking about it being good legislation, and in another case, the president of the party is saying it's fraught with problems. Is there a contradiction there?

Mr. Terrance Mercer: Mr. Borotsik, I am national director of the Liberal Party. I was asked to be the representative here this evening by the leader of the Liberal Party, and I'm happy to do that.

I've expressed my opinion and I stand by it.

Mr. Rick Borotsik: Okay, thank you.

Also in the same report, and I think you touched on it, you said the party had to have an internal examination. As a matter of fact, what it says here is that the motion passed by your party was that it needed an adequate examination of the bill.Can you tell me what an adequate examination of the bill is, and how long that process will take within your own party structure?

¾ (2045)

Mr. Terrance Mercer: I don't recall those words being in the motion. What I do recall being in the motion was the need for the party to do a complete study of how we distributed funds within the party and to come to agreements within the party on the distribution of funds to our provincial and territorial levels, as well as to the ridings and the Liberal Party of Canada.

Mr. Rick Borotsik: Okay, thank you, Mr. Mercer.

I'd like to now go to Mr. Lepsoe. And I apologize, he is our counsel, and I'm--

The Chair: Actually, as long as you mention the chair, it's fine.

Mr. Rick Borotsik: Through the chair, I will. But I apologize for bringing a lawyer to this group. However, I will do that.

We've heard an awful lot about the financial implications. We've talked at length about contributions, corporate and personal donations. This legislation is 96 pages, and only six pages encompass that.

Mr. Regan was on the right track when he was talking about the regulatory issues that are there, not only with constituency associations, but also in other areas. I'd like Mr. Lepsoe to touch on that--not only the regulatory problems we have with it, but anything else that perhaps is more of an issue than just the finances.

Mr. Lepsoe.

Mr. Paul Lepsoe: Mr. Chairman, as a volunteer counsel I provided legal advice on Elections Act compliance for nearly fifteen years to candidates and a party, and my focus on this bill has been on the detail. My impression to date of the work of this committee is that until tonight there really hasn't been focus on the detail, and I am quite concerned about it, as someone who's been involved in election regulation for a long time.

I distributed an article I did for the Public Policy Forum on the bill. I said this bill treats political activists, who are generally unpaid volunteers, as people in need of federal regulation on a par with that applied to pesticides or radiation, and I really don't know why—

The Chair: Colleagues, we have this paper. It's available in both official languages, so it's here.

Mr. Paul Lepsoe: Thank you.

I know the Prime Minister is concerned about addressing the perception of the operations of the governing party, but I'm not sure I understand why the thousands who are active in Canada's ten other federal political parties, most of which have little prospect of forming a government and certainly don't have riding associations that are black holes awash in cash.... I'm not sure there are a lot of Canadians who are concerned, as I said in the article, about how much candidates for the riding nomination for the NDP—or virtually any other party around this table—for Kicking Horse Pass, to use a famous example, really spent on fighting for the nomination.

Anyway, Rick, I'd like to go through a few specific technical concerns. One is that the bill comes into force on January 1. Next year there's to be a redistribution that comes into effect. Under this bill, every riding association has to register. Then the bill says that upon a redistribution every riding association is de-registered. So every riding association in Canada—of every party—under this bill is going to have to register next year twice.

At the same time next year—a probable election year—they are going to be dealing for the first time with registration of their nomination fights. So this bill promises to be a nightmare for someone like myself who provides unpaid advice on Elections Act compliance. The solution I've come up with for me personally is to incorporate my practice so that I'm no longer able to provide free advice, as a corporation.

I'm being a little facetious, but I think this does point out another problem; that's the overreaching nature of the ban on corporate and union donations. I'm being quite serious about this. There's going to be a tremendous need under this bill not so much for volunteer lawyers as for volunteer accountants to act as financial agents or as unpaid or low-paid auditors. At the same time, there's a trend across Canada to permit incorporation of professional activities.

I've circulated extracts from the Manitoba and Quebec legislation. The third page of this package has an extract from the Manitoba legislation. Just to give you a specific example of where I think this bill could be simply but vastly improved, in Manitoba they exempt from the definition of a donation “the services of a person who acts without compensation as an auditor, a chief financial officer, an official agent or legal counsel to a candidate, leadership contestant or a registered political party.”

It's a very simple feature. It's in the Manitoba legislation, and I think it would help out tremendously for the kinds of compliance requirements everyone is going to have under this bill.

For my friends in the NDP, concerning the overreaching—in my view—of the ban on corporate and union donations, I've asked them to think a little about how far this is going to go, and how we're all going to be watching each other; that even the donation of a meeting room for a committee meeting by a union or by a community association, many of which are incorporated now, is going to be illegal under this bill. One meeting for one night in one union hall or one incorporated community association is going to be illegal.

¾ (2050)

The Chair: Paul, we only have about two minutes left, even with my generous interpretation of Rick's sacrifice in the last round.

Mr. Paul Lepsoe: I've made a number of suggestions in writing to Rick, and if the bill is going to go ahead, as it seems it is, there's a tremendous load of paperasse here that I think needs to be addressed for people who are actually on the ground in the ridings.

The Chair: Paul, I've just looked at this. Obviously, I haven't read it, but this is remarkably detailed material, and we do appreciate it. You do have a couple of minutes. I didn't want to interrupt you, but that's what I said.

Mr. Paul Lepsoe: I'm sorry, Mr. Chairman, I thought you were cutting me off.

The Chair: No, I was kind of warning you that I would have to cut you off.

You have two minutes, please.

Mr. Paul Lepsoe: All right.

Some of the specific suggestions I've made to try to make this thing more workable, one of which I've given to my friend, Mr. Mercer, is that Elections Canada should have to consult the parties on all these gazillions of new forms and reporting requirements that are going to be introduced.

Furthermore, I would strongly suggest that there be thresholds for registration and disclosure by ridings and by nomination contestants. This bill requires ridings to register with Elections Canada, even if they have no intention of giving receipts, even if they have next to nothing in the way of assets or revenue, and I really don't understand that. I don't see the purpose of that. As I said, it sends a message that politics is a demeaning activity in need of detailed federal oversight.

The same thing is true with nomination contestants. I don't see why there shouldn't be thresholds in the proposed legislation before you, before you get into these detailed reporting requirements to Elections Canada. What this means is that every nomination contest for every riding for every party in Canada is going to become federally regulated. I can't describe for you the headaches this is going to cause every party at the local level. And I'm simply not sure what it accomplishes.

The Chair: Thank you very much, Paul. I appreciate your patience with me interfering.

Rodger Cuzner, then Ted White, Jacques Saada, and Monsieur Guimond.

Mr. Rodger Cuzner: We're getting into some detail of the bill, and obviously we've had a great opportunity to hear some broad-based views on the proposed legislation.

Perhaps I could get a couple of comments and perhaps I could address them to the parties that are represented in the House. Give me your opinion on whether or not some of the aspects of the bill would enhance, because I think what we're trying to do here is tweak the democratic machine, or at least take away some of the bogeymen that are out there. In the House, when we went through Kyoto, the Alliance was accused of pandering to big oil. Obviously, it comes back across the aisle to us. So perception is a big part.

Perhaps I could have a couple of quick comments from each of the parties on some aspects of the bill, with regard to limits on expenses and polling and research costs being able to be claimed as an expense now. Does that enhance or detract, or is it neutral as far as it goes for improving the democratic process?

I'll start there and just go around.

¾ (2055)

Mr. Paul Lepsoe: What the bill does is it increases the expense limits of political parties by 13%. They're already indexed to inflation. There's only one party around this table that comes anywhere near to spending the limit, so I'm not sure it's really enhancing. I guess that's my answer.

The Chair: Next, Chris Watson.

Mr. Chris Watson: From our point of view, having to put polling expenditures under the ceiling is a positive thing. I think it does level the playing field a little bit. Right now, the party with the biggest bank account is able to do all kinds of polling for local campaigns, local candidates, outside the ceiling, and bringing that in is an improvement in terms of levelling the playing field between the different parties.

Mr. Edward Goldenberg: Mr. Chairman, it simply adds transparency. Polling is definitely an election expense. There must have been a reason why it was not covered, but it clearly should be. Clearly, it is an expense. It is one of the most important expenses of a national campaign.

Mr. Rodger Cuzner: Could we go back the other way now and get a couple of brief comments on the limiting of expenses for nomination races?

Mr. Terrance Mercer: I think the lowering of the limit to 25% is extremely positive.

There's one member of this committee who can testify better than anyone--the member for Mississauga Centre--who could tell you better than anybody about the costs of nominations and how they can get out of hand in big races in big cities.

I think limiting it to 25% really levels the playing field. I think it levels the playing field particularly for female candidates and new Canadians who want to test the waters in the political process. I think it makes it a much more open process for everybody.

Mr. Chris Watson: It gives us a target to shoot for, I guess. We don't generally spend that kind of money on nomination battles.

Mr. Paul Lepsoe: I agree with Mr. Mercer about accessibility and perhaps having a limit being a good thing. But the flip side of it is that because there are no thresholds, in my view this bill as drafted is actually a bar on women candidates and those who have perhaps less connection to the legal, accounting, or business world.

The reporting requirements under this are going to be a real bar. Without a threshold to get into the regulatory regime--

Mr. Rodger Cuzner: Why would it be any greater for a female? You said it would be tougher for a female candidate.

Mr. Paul Lepsoe: I think that someone who is less connected to, as I said, the legal, business, and accounting world is going to be more concerned and would have greater difficulty finding a financial agent and auditor and all the other things, all the other bells and whistles that this legislation requires. So although I agree with Mr. Mercer that it seems to be a good idea to have a spending limit, without a threshold before you get into the regulatory regime.... I mean, the vast majority of nomination races for most parties in most ridings have very little expenditure. So I don't think we need a big steamroller to probably look after a problem in a few ridings for a few parties.

[Translation]

The Chair: I think that Gilles would like to say something. Briefly, please, Gilles.

[English]

Mr. Gilles Lavoie: I'd like to ask you what kind of threshold. Do you have a specific amount that would be reasonable, that would avoid those people getting into all those papers to fill? What could it be?

Mr. Paul Lepsoe: I'm not sure it needs to be the same threshold requirement for a leadership candidate, for a riding association, for a nomination race. I don't know, something probably close to the limit, a few thousand dollars. I don't think we need this kind of regulatory regime, maybe five--

The Chair: Now, Ted White. I think there's consensus that we're then going to conclude.

Ted.

Mr. Ted White: Okay, A short question for Ms. Di Carlo.

I did say I would come back to you after the first round, where I agreed with you the public would soundly reject this bill, but the fact is it's probably going to pass.

Is there one thing in this bill that you would like to change, or one suggestion you would like to make? Only one. If you could have your wish, what one thing would be changed in the bill or included in the bill?

¿ (2100)

Ms. Anna Di Carlo: If we were to focus on one thing, I suppose it would be to include the aspect of broadcast allocation, because that is such a central part of the way in which political parties are publicly subsidized. From that perspective, to equalize that--it's been an ongoing issue--I think would be appropriate at this time.

Mr. Ted White: Would you include in that definition of broadcasting, then, something like the householder that has been mentioned here several times that would be sent out by every party at the time of an election?

Ms. Anna Di Carlo: I think it would be a very, very useful experiment, if nothing else, to see what kinds of results are obtained.

Mr. Ted White: Thank you. That's all.

The Chair: Colleagues, I think there's consensus that I conclude.

I'd like to thank, on behalf of us all, Terry Mercer and Eddie Goldenberg of the Liberal Party of Canada, Hugo St-Onge of the Party Marijuana, Anna Di Carlo and Diane Johnson--Diane, thank you to you in particular--of the Marxist-Leninist Party of Canada, Chis Watson and Eric Hébert of the New Democratic Party, Gilles Lavoie of the National Alternative Party.

[Translation]

Thank you very much, Gilles.

[English]

And for the Progressive Conservative Party of Canada, Irving Gerstein and Paul Lepsoe. We do thank you all.

Colleagues, I'm going to adjourn the meeting until 11 a.m. tomorrow. It's in this room. You will recall, at the end of tomorrow's panel discussion we'll have a short discussion of our future plans.

The meeting is adjourned.