Greetings, elections law enthusiasts! As noted in the intro text (look up, waaaay up if you missed it), Canada's chief election overseer will bring his unique blend of insight and experience to bear as Procedure and House Affairs begins its study of the government's latest attempt to tweak the rules for political financing -- specifically, the rules and regulations related to the lending and borrowing of money. It's worth noting, I think, that today's meeting is one of the *big* committee rooms, and not - as is usually the case for poor, often-overlooked PROC, tucked away in the basement.
by Kady O'Malley 10/23/2012 3:08:32 PM
And we're off!
Thanks to a helpful handout of his opening statement by Elections Canada staffers, I can sum up the CEO's chief concerns with the bill before he even wraps up: it's too complex -- to the point that it mat well "create an incentive to find ways to circumvent the rules," and fails to deliver the hoped-for "closure" (his word, not mine) to the problem of unrepaid loans.
It also includes this rather elegant, if stark, explanation of the situation faced by Elections Canada at the moment: "Enforcement of the contribution rules and the imposition of criminal sanctions require an assessment based on the facts of each case; they cannot simply stem from the mechanical application of a statutory fiction."
"Mechanical application of a statutory fiction." I like that.
by Kady O'Malley 10/23/2012 3:10:57 PM
What Mayrand would like to see instead, it seems, is "more effective legislative reform" that would deal not only with loans, but "all rules governing unpaid claims" rather than a piecemeal approach, which, to be fair to the government, would pretty much suck all of the satisfaction out of proceeding a manner designed, above all other goals, to make life difficult for the Liberal Party. You can see the bind they're in.
He also thinks *parties* should be liable for all outstanding debts -- with the *possible* exception of leadership candidates, which is probably a good idea to exempt since boy howdy, can I think of ways to make mischief if *that* was the case.
by Kady O'Malley 10/23/2012 3:13:48 PM
And with that, let the questions begin, starting with the government side and Tom Lukiwski, who concurs with the chair's prediction that the committee will have many queries to put to the CEO. He begins by inviting Mayrand to clarify his suggestion that individuals be allowed to make one-time loans above and beyond the contribution limit, which he -- Lukiwski -- fears could allow a particularly "well-heeled" candidate to campaign without seeking any additional loans or donations.
Mayrand agrees that there are two ways to go -- one could, after all, ban loans entirely, as is the case in Ontario (I didn't know that! But with such high contribution limits and union/corporate donations as well, I guess it's not necessary.)
Anyway, eventually -- by which I mean by his third question -- Lukiwski gets to an issue near and dear to the hearts of Conservative talking points drafters: specifically, those outstanding leadership loans from the 2006 Liberal race. Mayrand notes that the CEO and the courts can grant an extension -- which, in his case, involves determining if there is a will to repay the loan, and if it makes sense to require it. There's also a lack of transparency, he notes, since there is no reporting requirement beyond that mandated by the leadership process.
Lukiwski seems sceptical of the suggestion that the party take on responsibility for loans, and reminds Mayrand that the parties set the rules for their respective contests. But this -- this, he worries, could lead to an abuse of the electoral process to allow leadership contenders to break the rules with impunity.
by Kady O'Malley 10/23/2012 3:22:44 PM
To the opposition side of the table now, where NDP MP Alexandrine Latendresses notes that Mayrand's presentation this morning shows precisely why committees are so important, and asks him what *his* ideal regime would involve.
As is his nature, Mayrand favours a moderate approach that would allow candidates sufficient leeway to muster up the necessary "seed money." When Latendresses brings up the new rules for guarantors, he cites the Ontario example again -- in this case, the ability of corporations and unions to serve as co-signers -- but stresses that such a move might contradict the overall goal of the bill.
by Kady O'Malley 10/23/2012 3:27:17 PM
Meanwhile, Nathan Cullen wonders if this legislation would (or should) be retroactive, which prompts Mayrand to remind him that it's up to the governmwnt to decide how to apply a law.
His caucus colleague, Craig Scott, wonders if that means leadership candidates from races past would *not* be able collect money over the limit, but Mayrand clarifies that, in the case of individuals who are still, technically, leadership candidates only beause they haven't yet paid off their debts will be covered by the new law, and as such, can reopen the coffers for contributions from donors who hit the max years earlier.
by Kady O'Malley 10/23/2012 3:31:05 PM
Over to the Liberals, and potential future leadership contender Marc Garneau, who wonders if restricting loans to those offered by traditional financial institutions could disadvantage those potential candidates without sufficient credit rating to successfully apply, like women and young people.
Mayrand, not surprisingly, can't comment on the specific policies of individual banks, but he believes linking loans to parties and electoral district associations should be taken into account when deciding whether to lend out money, as well as other criteria that will suggest how likely it is that a loan will be repaid. AFter all, the bank, he notes, can't turn to a candidate's *personal* assets if the debt goes fallow -- that would be illegal under the current law.
"The minute we rely on private institutions to fund loans," he predicts, "they'll take a business approach to it, since they're not in the business of sustaining campaigns." This, Mayrand, will affect "different candidates differently," with independents potentially especially hard hit.
by Kady O'Malley 10/23/2012 3:36:11 PM
Alright, so basically, Mayrand shares the concerns raised by the opposition that restricting loans could ultimately reduce access for candidates.
On the other side of the table, Conservative MP Scott Reid wants to know what Mayrand meant when he suggested these changes could allow money to be "funnelled" to candidates by not specifically prohibiting transfer of money with the express purpose of lending it to a candidate. (Turns out that's legal now, even!)
by Kady O'Malley 10/23/2012 3:39:51 PM
Moving to Mayrand's specific recommendations on one-time personal loans, Reid gets the CEO to confirm that he suggested $4,000 as a limit for candidates seeking federal leadership, and a lower amount for, say, a local nomination race.
Reid, however, frets that this could put a candidate -- or a contributor -- in unintentional vioiation of the law.
Craig Scott, meanwhile, points out that a $20 K loan would require 15 or more guarantors, which would lead to considerable paperwork for both the candidate and the bank -- to the point where it may become a disincentive to lending the money in the first place. Mayrand doesn't seem to disagree -- in fact, that was one of his main criticisms of the bill; namely, that it will be incredibly tricky to administer.
by Kady O'Malley 10/23/2012 3:45:40 PM
Back to the government side of the table for another round, which will, it seems, allow Harold Albrcht to muse whether it might be helpful to amend the law to ensure that suppliers may be taking a "huge risk" by dealing with a candidate instead of the local EDA. (Well, not if you made the EDA responsible for unpaid debts, as Mayrand recommended.)
Oh, and Mayrand believes that three years may be the outside limit for declaring an unpaid loan a bad debt -- an issue that, despite Albrecht's tentative assurances to the contrary, apparentlyis *not* addressed in this bill. (Why do MPs -- and committees -- so often end up misunderstanding elections-related legislation?)
by Kady O'Malley 10/23/2012 3:54:58 PM
Conservative MP John Williamson brings up a question that has been churning around my mind since Mayrand since raised the prospect of parties being ultimately responsible for all candidate and EDA debts: What about the "moral hazard" factor -- specifically, if a clearly doomed candidate racks up vast amounts of last-minute campaign expenses, secure in the knowledge that he or she won't have to pay the piper when the bill comes due? Mayrand doesn't seem to have any particular fix in mind -- nor, really, is it his duty to do so; perhaps the parties would be more mindful of who runs under their banner if they were held accountable for those debts.
by Kady O'Malley 10/23/2012 4:00:54 PM
Cullen, on the other hand, seems similarly uncertain about the notion of banning candidates with outstanding debts from running for office in future -- which Mayrand offered as an alternative to making political parties liable for those debts. The CEO points out that the *party* can decide not to endorse a candidate still owing after three years, but no one seems to be able to come up with a solution to the problem of lingering leadership debts. Mayrand, at least, is open to suggestions.
by Kady O'Malley 10/23/2012 4:06:06 PM
And now, it seems, we've come full circle: Lukiwski is up again, and he goes right back to leadership rules, noting - correctly - that such means of financing ccampaigns are rarely used by other candidates. Also, Lukiwski seems to be labouring under the impression that leadership loans involve 'taxpayer money', which -- I have no idea what he's thinking about, but it doesn't seem to be the bill before the committee, or, indeed, those outstanding Liberal leadership loans.
Mayrand, by the way, seems to be intrigued by the possibility of making the parties responsible for all leadership loans, which wasn't at all what Lukiwski meant, as far as I can tell.
by Kady O'Malley 10/23/2012 4:10:41 PM
It's also hard to think of anything that is *less* of an Elephant In The Room (tm) than Liberal leadership debts, since that's all the Conservative membes seem to want to talk about, at least when it comes to this particular bill.
Mayrand, meanwhile, notes that there have been relatively few leadership contests since 2007, when the first changes came into effect, and assures Parm Gill that a "significant effort" is being made to repay.
As for debtor candidates, the original post-2008 debtload was between $3 and $4 million, which has been cut to $1.3 million after 18 months, and just over half a million at the three year point. Gill wonders if candidates are getting better at repaying debt, but Mayrand will only describe it as "steady" -- there are no "peaks and valleys", just a steady line.
by Kady O'Malley 10/23/2012 4:17:27 PM
Idea (mine, not Mayrand's or anyone else's, as far as I can tell): Ban all leadership loans other than an optional one-time loan from the party, to a maximum of -- oh, let's say $100K -- to all eligible candidates. The party could set its own terms for repayment, but all other money would have to be raised through donations.
by Kady O'Malley 10/23/2012 4:23:08 PM
One final round for the NDP, which gives Craig Scott the opportunity to quiz Mayrand about in kind loans -- like, say, a *really* good deal on a campaign plan in a particularly remote Northern riding -- and seems assuaged by Mayrand's assurance that such boons are considered contributions, not loans.
Mayrand also expounds - yet again - on his belief that an unpaid loan does not become an illegal contribution simply by virtue of the deadline for reimbursement having expired. It simply cannot be made into a criminal offence by what he described, way back when he was giving his opening statement, as "the mechanical application of a statutory fiction."
by Kady O'Malley 10/23/2012 4:29:00 PM
Cullen points to what may be a fatal flaw in Mayrand's suggestion that EDAs serve as loan guarantors: Do financial institutions even recognize those as legal entitites? Apparently, there's a specific exemption in the otherwise "grey" law that allows a creditor to sue an EDA even if it isn't a registered association. (See, something else we -- or, at least, I -- learned today!)
Finally -- at least, I *think* this is the last round -- Garneau gets Mayrand to confirm, for the third time, that a leadership candidate can solicit the maximum donation from an individual every year.
by Kady O'Malley 10/23/2012 4:33:09 PM
Mayrand then proceeds to leave the committee -- and spectators -- on a somewhat bemused note by pointing to *another* potential loophole by allowing candidates to sell themselves goods and services on credit -- and with that, and a wee bit of housekeeping business related to future witnesses -- the meeting wraps up.
by Kady O'Malley 10/23/2012 4:36:36 PM
And with that, we're -- or rather they're -- adjourned! Hope you all enjoyed the coverage!
by Kady O'Malley 10/23/2012 4:37:07 PM