- In-and-Out Election Finances Scheme

I posted the following (below) in reply to Ottawa Citizen, "The Tories might have a point ... ", John Robson, The Ottawa Citizen, Friday, April 25, 2008.
(http://www.canada.com/ottawacitizen/news/story.html?id=f90d651c-4589-4dfc-8e20-23cfcf6de0bf&p=2#commentsFormTitle)

It seems to me that first:

- "Fair Elections should not only be done, but should manifestly and undoubtedly be seen to be done" (to borrow a fundamental truism).

- also, implementing an interpretation was Conrad Black’s undoing

- as you also suggested it may depend on how it was implemented

This interpretation does in my opinion, effectively, give the Conservatives a huge advantage:

In the last election the Conservative Party won 124 seats and lost 184 seats, a majority being 153. In the next election there may be well over 100 seats that can be considered a write off for the Conservatives.

The spending limit is approx. $80,000. If such local campaign is ordered to spend no more than, say, $20,000 themselves and engage in the "In and Out" scheme for the balance, that makes an additional $6 million above the spending limit of approximately $18 million on the national campaign, all of which would be

directed towards national advertising. Given that the Conservative Party is raising much more in funds than any of the other parties, this could give them a huge advantage and could very well have an impact on the results. Also, the local Conservative Party campaign would receive additional Canadian tax dollars of $36,000.00.

That would be a total of $3.6 million overall of our tax dollars. And, these are very conservative estimates. “David Dunne, a marketing professor at the University of Toronto's Rotman School of Management, said it's tough to measure the money's impact on the final results. Still, he said extra funds will boost an advertising campaign's visibility, and increase its chance of success. ‘In a political campaign, frequency is very important,’ he said." (G&M, “Spending to Win”, 23 Apr.’08)

Please refer to my Youtube posting:
“Holy "Good Con , Bad Con ", Batman !”: http://www.youtube.com/watch?v=YNu_BQvlPHA


Also, a quick review of the Canada Elections Act, it seems to me (and this is not a legal opinion and a more in depth analysis could result in a different conclusion) - I have set out the provisions I am referring to below:

If the meaning of “individual” includes “person”. Then, it is submitted, a candidate is an individual and so s.405.3. Of course, s.405.2 applies.

My understanding is that the funds to the Candidate were transfers and not contributions, and so not caught by 405(1). The same goes for the funds from the Candidate to the Party, and so not to be caught by s.405(1) or 405.3, above.

If they are transfers of funds then how can the candidate claim it as an election expense which, apparently, must be used to “directly“ promote or oppose a registered party, its leader or a candidate. It may be that the National campaign used the transferred funds to purchased ads, but can it be said that it was used by the candidate to “directly“ promote or oppose a registered party, its leader or a candidate.

If the candidate purchased the ads directly and not transferred the funds to the Party, it is possible the above does not apply.

Also, if it is not an election expense then can the candidate legally claim it and get the 60% rebated.

On the other hand, it if a candidate submitted an invoice for the ads that indicated it was a “direct“ campaign expenditure, Elections Canada may very well want to look at it more closely.

It seems to me that “directly“ is very important, as can be seen above, and seems to be left out of your analysis.

If what you suggest is true, then what is stopping individuals from contributing their limit to the candidate knowing that the funds will be transferred to the Party for spending on National advertising that is attributed to the candidate, with the candidate getting the 60% rebate. The individual might then also contribute their limit to the Party directly.

As with Ken Drydan, I would be very surprised if this was the intention of the Canada Elections Act and could lead to very unlevel playing field, throwing the results into serious question.



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"candidate" means a person whose nomination as a candidate at an election has been confirmed under subsection 71(1) and who, or whose official agent, has not complied with sections 451 to 463 and 471 to 475 in respect of that election.


404(2.1) A transfer of funds is permitted and is not a contribution for the purposes of this Act if it is
(a) from a registered party to an electoral district association of the party;

(b) from a registered association to the party with which it is affiliated or another registered association of the party;

(c) from a candidate endorsed by a registered party to the party or a registered association of the party; or

(d) from a candidate to himself or herself in his or her capacity as a nomination contestant in respect of the same election.

Exclusion for funds other than trust funds — registered parties and registered associations

(2.2) A transfer of funds, other than trust funds, is permitted and is not a contribution for the purposes of this Act if it is
(a) from a registered party to a candidate endorsed by the party; or

(b) from a registered association to a candidate endorsed by the party with which the association is affiliated.


405. (1) No individual shall make contributions that exceed

(a) $1,000 in total in any calendar year to a particular registered party;

(a.1) $1,000 in total in any calendar year to the registered associations, nomination contestants and candidates of a particular registered party;

(b) $1,000 in total to a candidate for a particular election who is not the candidate of a registered party; and

(c) $1,000 in total to the leadership contestants in a particular leadership contest.



405.2 (1) No person or entity shall

(a) circumvent, or attempt to circumvent, the prohibition under subsection 404(1) or a limit set out in subsection 405(1) or section 405.31; or

(b) act in collusion with another person or entity for that purpose

. . .


405.3 No individual shall make a contribution to a registered party, a registered association, a candidate or a leadership contestant or a nomination contestant that comes from money, property or the services of any person or entity that was provided to that individual for that purpose.

406. An electoral campaign expense of a candidate is an expense reasonably incurred as an incidence of the election, including

(a) an election expense;

(b) a personal expense; and

(c) any fees of the candidate’s auditor, and any costs incurred for a recount of votes cast in the candidate’s electoral district, that have not been reimbursed by the Receiver General.

Election expenses

407. (1) An election expense includes any cost incurred, or non-monetary contribution received, by a registered party or a candidate, to the extent that the property or service for which the cost was incurred, or the non-monetary contribution received, is used to directly promote or oppose a registered party, its leader or a candidate during an election period.

Exclusions — certain fund-raising and nominations

(2) Expenses for a fund-raising activity and expenses to directly promote the nomination of a person as a candidate or as leader of a registered party, other than expenses referred to in paragraph (3)(a) that are related to such fund-raising and promotional activities, are not election expenses under subsection (1).
Inclusions

(3) An election expense referred to in subsection (1) includes a cost incurred for, or a non-monetary contribution in relation to,
(a) the production of advertising or promotional material and its distribution, broadcast or publication in any media or by any other means;

(b) the payment of remuneration and expenses to or on behalf of a person for their services as an official agent, registered agent or in any other capacity;

(c) securing a meeting space or the supply of light refreshments at meetings;

(d) any product or service provided by a government, a Crown corporation or any other public agency; and

(e) the conduct of election surveys or other surveys or research during an election period.

Definition of “cost incurred”

(4) In subsection (1), "cost incurred" means an expense that is incurred by a registered party or a candidate, whether it is paid or unpaid.