Warning: include(new/inc/header_ads.php) [function.include]: failed to open stream: No such file or directory in /home/punditsg/public_html/wp-content/themes/et-starter/single.php on line 194

Warning: include(new/inc/header_ads.php) [function.include]: failed to open stream: No such file or directory in /home/punditsg/public_html/wp-content/themes/et-starter/single.php on line 194

Warning: include() [function.include]: Failed opening 'new/inc/header_ads.php' for inclusion (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/punditsg/public_html/wp-content/themes/et-starter/single.php on line 194
  ››  Pundits' Guide

Leadership Rules Need Changing

August 31st, 2011

[Welcome, National Newswatch readers!]

The rules governing leadership fundraising in the Elections Act need changing, and fast. This is not a partisan question, as it could have an impact on any of the federal political parties within the next five years.

The current contribution regime for leadership contestants is amongst the worst-understood provisions of the Elections Act. Political actors, pundits and journalists alike get it wrong routinely, and I have even met MPs who voted in favour of the change who do not realize what the provision actually says.

Most people believe there is an annual contribution ceiling to leadership contestant, because that's what there is in every other case and it would just make common sense. But that's not what the law says, and I have to say: I believe the law is wrong-headed on this point.

——————————————————————————

Here's the relevant section of the Elections Act:

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.

The amounts in s.405(1) are scaled up through an inflation adjustment, in increments of $100, with a base year of 2002, as per s.405.1. Thus any reference to $1,000 became $1,100 almost right away, and would now be $1,200 (though this is not being implemented until 2012, I'm told).

——————————————————————————

Note that contributions limits are set for an election candidate or nomination candidate for each calendar year, but candidates for a party leadership – where spending ceilings are likely to be much higher – must raise funds from contributors who can give the maximum only once per leadership contest. [Independent candidates for election to the Commons also face a per-event contribution ceiling.]

The drafting of the above sub-sections seems to make sense on the face of it, but in practice the law is an ass: allowing some candidates to game the system, on the one hand, and making it extremely difficult for honest candidates to cover their debts after the fact, on the other.

Think this doesn't apply to your party? Let me demonstrate:

  • Cabinet minister X retires from public office and takes up a job at one of the big five banks. An exploratory committee for some future leadership campaign spends the next five years collecting pledges of $1100 from various friends and colleagues and traditional party donors. In due course, that party's leadership opens up, the pledges are collected, and suddenly it becomes extremely difficult for any other candidate to enter the race.
  • A party is in its down cycle, and needs to attract new talent to renew itself. Unfortunately, an old warhorse has tapped the few remaining large contributors for the maximum donation, and newer entrants are effectively frozen out of the race because they can't hire the infrastructure to raise money from new small donors without already having seed money from larger donors.
  • [Actually happened:] In the middle of a leadership contest, under a known set of rules, Parliament amends the Elections Act, dropping the contribution ceiling to one-fifth of its previous size. Unsuccessful candidates who had entered the race under the old set of rules, and budgeted accordingly, were suddenly unable to find a sufficient number of donors who hadn't already contributed the maximum to one of the perceived front-runners, in order to pay off their debts.
  • An unsuccessful leadership candidate for one party, who is caught in such a squeeze, is approached by someone in another party to step down from his seat, with a promise that a new pool of contributors who support the second party will donate money to pay off his or her leadership debt.

In his report to Parliament on recommended changes to the Elections Act following the 2008 general election, the Chief Electoral Officer recommended that the "per-contest" limit be changed to an annual ceiling, in order to be consistent with the other entities he regulates (national parties, local riding associations, nomination candidates, and party candidates for election to the House of Commons).

I realize some people who understand the current provisions still support them, because they feel leadership contestants ought not to ring up such excessive expenditures in a vain pursuit of their party's leadership, and that such contests should be far more frugal. And, at one level, it's perhaps not hard to criticize a few individual campaigns for over-reaching. But consider: having a healthy ego is an occupational hazard of the practice of politics in the modern always-on age we live in, and we don't really want our leaders to be pessimistic and un-ambitious, do we?

A leadership campaign can be financed through:

  • individual contributions, to the per-contest ceiling per contributor
  • transfers from either the national party or a local riding association, so long as those transfers are offered on an equal basis to all candidates (see s.404.3(1) of the Act)
  • loans, though those loans must be repaid from out of either (a) or (b)

Note that it cannot be financed by the individual candidate, nor can it be funded by the candidate's party or riding association to any greater extent than that offered to other leadership candidates.

Now, should Parliament not see fit to amend s.405(1)(c) to institute annual contribution limits rather than per-event contribution limits for leadership contests, a political party organizing a leadership race could still decide to enforce more restrictive contribution limits on its own candidates.

For example, a party could set a $600 contribution limit for each contestant, regardless of the contribution ceiling in the Elections Act, and/or any spending ceiling the party also decided to put in place. This would reassure unsuccessful candidates that they could still raise funds after the race to pay their vendors and properly dispose of their debts, and thus allow a leadership race to remain relatively open.

Political parties occupy a unique place in our democratic system. They are not direct agents of the state, but at the same time they are more than private social clubs. They are voluntary organizations that have become professionalized and partially regulated by law, and are the chief recruiters, vetters and providers of the candidates we must choose from amongst, when we cast our ballots at election time.

It is in the public interest that political parties be able to attract a wide range of potential candidates during a leadership race, and that viable candidates not be dissuaded from running for fear they will be unable to pay their debts later on, or be subjected to potentially corrosive pressures in order to do so.

Thus, I urge Parliament to consider amending s.405(1)(c) of the Elections Act, at the first opportunity, to change the leadership campaign contribution ceiling from a per-contest one into an annual one, and I also urge the various political parties who will be launching leadership contests over the coming months and years to set rules and spending limits that don't force candidates into impossible situations after the fact.

——————————————————————————

Of course, this raises the question of where the 2006 Liberal leadership candidates are at with their fundraising and debt repayments, and Glen McGregor of the Ottawa Citizen noted the other day that Stéphane Dion is continuing to hold fundraising events to pay down his debts.

In fact, most of the latest leadership candidates' returns have just been posted on the Elections Canada website, with the exception of Michael Ignatieff, Scott Brison and Bob Rae, who are all already out of debt and have filed final returns, and Stéphane Dion and Hedy Fry who both requested and were given 30-day filing extensions, as allowed under the judge's order.

The judge ordered that all candidates' debts be paid off by December 31, 2011 (with the exception of Ken Dryden, who has been given until June 30, 2012). After that they have a further 60 days to file their final returns, for which a further 30-day filing extension could also be granted.

Here are the latest figures (as of the candidates' June 30, 2011 returns, unless otherwise indicated).

  • $354,120.78 - Ken DRYDEN – [reminder, he has a June 30, 2012 deadline to pay everything off, while the other candidates only have until December 31, 2011]
  • $115,000.00 - Martha HALL FINDLEY
  • $110,090.00 - Joe VOLPE
  • $108,302.47 - Gerard KENNEDY
  • $33,164.08 – Maurizio BEVILACQUA
  • $77,500.00 – Hedy FRY – [as of Dec 31, 2010]
  • $30,000.00 – Stéphane DION - [as of Dec 31, 2010] UPDATE: return now available, figures remain the same
  • $0 – Carolyn BENNETT
  • $0 – Scott BRISON
  • $0 – Michael IGNATIEFF
  • $0 – Bob RAE

Note that a large chunk of Mr. Dryden's outstanding obligation is the result of unpaid claims totalling $129K (all but $5K in loan interest), and the one operating loan taken out by the campaign was a $300K loan from Mr. Dryden himself at an interest rate of 5.5%. Thus, he is in the unenviable position of legally having to raise money to pay himself back, or else he would be in violation of s.405(1)(c) if the loan becomes a deemed contribution and puts him over his contribution limit for the leadership contest. He's plugging away at it, but it's going slowly, and it was an $805K campaign that obtained just under 5% of the vote on the first ballot (238 delegates). In contrast, the three top candidates spent some $3M each.

Maurizio Bevilacqua appears to have most aggressively retired his debts since our last check-in, when he owed some $193K.

Note also that the government has several times tabled legislation seeking to further regulate who candidates and contestants may obtain loans from. We can probably expect to see a version of this legislation coming forward at some point in the current Parliament as well.

33 Responses to “Leadership Rules Need Changing”

  1. George Pringle says:

    The primary point of Bill C-24 is to remove buying influence from our govt, a leadership race is the ultimate time when a potential PM can be influenced by big money donors. It fell short of the mark and the FAA finished the job.

    I was the staffer for the critic for the Conservative Party when this Act was amended. I, the MPs and other staffers who studied the Bill C-24 in the Procedure and House Affairs committee knew exactly the implications of what the changes meant and how it would change leadership races.

    The candidates of the last Lib race acted as if the changes had not been made.

    People who run knowing they won’t win but run to build profile or to harp about one particular issue just clutter the task that the party is engaged in. Really, I doubt anyone but Rae and Iggy should have run.
    A serious candidate candidate has to build up a grassroots donation network just as parties have had to and will need to strengthen their base even more as the public subsidy winds down.

    The “loans” issue has to be addressed as it has been used a way of getting around the rules as someone just loans an amount way about the donation and the candidate defaults. In some cases I bet it is done on purpose.

  2. Well, I really appreciate getting this kind of informed commentary on the legislation, George, so thanks for your contribution.

    I think we’ll have to part company on your assessment of the value of second-tier candidates, though, as it may be in a political party’s interest at certain points in its lifespan to highlight bench-strength, or to allow a series of voices to be heard before consensus is achieved, or to demonstrate growth potential (or facilitate growth even) in a certain region or constituency.

    Your point about the need to build up grassroots donation networks is a valid one, but if you’ll take the next step with me … it takes money to build in the first place, so either seed money from large donors, or loans from one lender or another, is required to kick things off. I’m just libertarian enough that I wouldn’t want the big five chartered banks deciding who could afford to run or not, particularly when there’s no corresponding spending limit set in the legislation. On the other hand, you do raise the real problem that an unpaid or forgiven loan is the same as a very large contribution.

    For sure, everyone can agree that the 2006 Liberal leadership race will long serve as the example of how not to do things on a number of fronts.

    But will you not concede that some leg-room has to be given to leadership contestants to legitimately raise the funds require to properly retire their debts? In other words, even those who may have made a mistake, are having it compounded many-fold now, with no legal remedy for correcting it.

    And would you also concede that there exists a way, under the law as now written, to game the current rules, so as to keep eligible and valuable candidates out of a race they would not have already been preparing for years ahead of time?

    Can you not see either of these issues causing a bit of grief in your own party down the road?

  3. Barcs says:

    I’m afraid I still don’t understand the need to change a single short term event into a yearly contribution…

    If a leadership contest is a couple months, and the rules (before extentions) provide a specific time period to pay it off. Shouldn’t it be paid off within that year + time period?

    I understand there was changes near the beginning of a leadership contest that a party extended to be a nearly year long event. But Mr. Pringle is correct by my eye, they largely ignored that there was changes (or assumed that following the election they were going to win that the rules would be easily changed back)

    I also don’t understand your contention that one of the big banks would choose who gets to run. There are other few sources for loans. And if you are adequately punished (which the law doesn’t seem to either for the candidate or for the person who gave the loan knowing it couldn’t be repaid) for unpaid loans which are deemed illegal it would stop …. Atleast the ones that are hundreds of thousands out.

    You could even grant extensions for those who are close and trying hard… But actually punish those who are way out of line.

  4. Biaced says:

    This will only be an issue to candidates that perceive themselves to be popular with their party’s membership because they have read/heard/watched the same in the MSM. A candidate that is the voice of a real party that has a real membership — members who are willing to volunteer, donate and vote — will not have a problem. I agree with GP above, the issue of loans had to be dealt with. Non repayment of loans should be met with real penalties. The Liberals clearly believed they’d be back in power soon and would be able to make the loan “problem” go away.

  5. Alan says:

    Does it really matter what the financial rules are? Really?
    Marc Mayrand and Elections Canada will probably and simply grant extentions and allowances that can go on for years and years. Looking at the failed LPC candidates from 2006(!), the NDPers should be safely out of politics and retired by the time Elections Canada comes around a-collecting (this time they really, really mean it!).

  6. Well, Barcs, if a leadership contestant is trying to pay off his or her debts, but can’t raise any more money because everyone they ask for money from has already given the per-contest limit, how can they pay off the debt?

    Only a leadership contestant could accept such contributions, of course – they have to register as a contestant (which they can’t do until the contest is officially launched), and once a contestant files their final report for that leadership contest they are no longer a contestant. So, it would not be every year; just every year until the debt is paid off.

    Now, you might argue that debts should be paid off with a single year and/or time period, but what if they can’t be?

    A law should not be written in a way that people become in technical violation of it and have no legal way to get out of that situation.

    My reference to the banks was because the legislation tabled by the government in the last parliament, proposed limiting lending to candidates and leadership contestants only to financial institutions and other political entities.

    I agree with you that some discretion could be called for, and that’s why the leadership candidates have been going before a judge to seek extensions (which is what the Act provides for). Certainly in one case, numerous extensions will have been granted by the time the period is up, and it looks unlikely that the debt will be paid off. We are going to get some jurisprudence out of that case, I’m almost positive.

  7. Alan, the extensions have been granted by a judge, not the Chief Electoral Officer, and done so under existing provisions of the Elections Act.

    Biaced, I agree that the loans issue is a genuine problem. The Chief Electoral Officer himself noted this problem in his 2007 report after the 2006 general election, recommendations that formed the basis of the government’s proposed legislation. Here is the Library of Parliament’s Legislative Summary about that bill, which I found a very good and neutral summary of the history and issues.

  8. George Pringle says:

    First, it should be clarified that the section of the Act that you quoted is the current post FAA limits. The Lib race was done with a $5200 limit.

    Second, I do not concede that a leadership crowded with people who have no chance of winning just for the sake of their “voices”. That kind of divisive identity politics is a cancer in our body politics.

    Third, I do not concede you need large amounts of money to set up a donation system. Any nomination or leadership race is a test of the candidate’s ability to motivate the free volunteers that build a network. If you fail that test, you should not be running.

    As an aside, the Libs and the old PCs became parties where individuals did not volunteer but the party apparatchiks built themselves sources of employment.
    Dryden spent 564,907.10, 211,384.88 on pay for staff and 152,998.71 for misc expenses mostly paid to these staffers. In fact very little was spent on actual campaigning.

  9. George, the Liberal race started with a $5,200 limit, but was subject to the amended FAA limits part-way through. Candidates currently trying to raise funds to pay off their debts from that race are doing so under the FAA limits.

    I’m curious about your comment on “voices” being divisive identity politics, because I would have thought that within the Conservative Party there might be candidates representing fiscally conservative, libertarian, socially conservative, and progressive conservative voices, along with perhaps someone associated with the cultural communities. Am I wrong?

    I do take your point about the ability to motivate a network of volunteers being an important trait in a leadership candidate. But political parties also ask for entry deposits upfront. Anyways, I was re-reading the background on the loans legislation, and the CEO recommended that an exception be considered for leadership contestants giving themselves a startup loan. The government did not appear to accept that recommendation.

    The Dryden campaign apparently suffered from the problem that you can do anything no more than two of fast, cheap and well, but never all three. I’m told he resisted advice to make up his mind early, and was then left with a need to do things quickly and therefore expensively. Evidently there was no Plan B in case things went sideways.

  10. George Pringle says:

    Alice asked”Well, Barcs, if a leadership contestant is trying to pay off his or her debts, but can’t raise any more money because everyone they ask for money from has already given the per-contest limit, how can they pay off the debt?”

    Dryden had 3 donors Sharon Carstairs $2500, John Carstairs $2500 and Robert Kaplan $5000. A senator, her husband and a former ON Lib MPP. Obviously he made no attempt to fundraise. He acted extremely irresponsibly. Afterwards, he gathered another 527 donations for 212,247.16. I doubt a change to the system to an annual limit would have any effect.

    The change that is needed is that a year after the race is closed, the Party should be responsible for a all debts of the candidates. Perhaps they would not approve frivolous candidates.

  11. Well, at least that proposal would allow a way out of the legal Catch-22. I’d have to think through all the consequences, but I’m guessing you’ve probably gamed out most of it already, George.

  12. George Pringle says:

    Since the FAA received assent on 12 Dec 2006 and the vote was on 2 Dec 2006, the new limits did not apply.

    If they did apply after, which I doubt, Dryden’s averaged $400 per person in post campaign donations so it is the limit but the willingness of donors that is his primary problem.

  13. Well, they did in fact. I’ve spoken to people trying to raise the money for those candidates, and also if you look at some of the returns (for e.g., Martha Hall-Findlay’s) you will see listed “return of overcontribution” to various people.

    I’m not going to focus exclusively on Dryden, but it is the case that the leadership candidates can find people who are willing to give them money, but have a harder time finding people who are willing to give them money who haven’t already contributed a total of $1,100 to one or more of the other leadership candidates in that race.

    George, if you wind up organizing for a candidate to replace the Prime Minister as Conservative leader, the first thing you should do is to lock up as many $1,100 (or probably $1,200 by then) donors as you can, to prevent any of your candidate’s competitors from raising any money. It would be the surest way under the current law to exclude your opponents from running.

    If you think that’s good for our democracy, then the law shouldn’t be amended. But you won’t be surprised if others have slightly different ideas about that, I’m sure.

  14. Shadow says:

    What’s missing here is an incentive to FORCE the candidates to follow the rules, make logical decisions, and put an effort into fundraising.

    How about an upfront bond paid to EC ?

    It could even be a certain percentage of the candidates’ networth.

    Junk the extentions and give the rules some teeth. Make it known to all that you won’t get your money back unless you play by the rules.

  15. Shadow says:

    Alice isn’t it equally troubling for a bank executive to give $1,200 to ALL the candidates in a leadership race ??

    Kind of makes it sound more like covering your bases then actually giving money to advance a political cause you believe in eh ?

    Perhaps a good rule change would be to increase the limit you can give without increasing the limit you can give to an individual candidate.

    Allow somebody to spread around $1,500 but no more than $1,200 per person.

  16. Jay says:

    This shows how irresponsible these candidates are. They cannot manage their own campaigns and they want to manage the Canadian peoples money?
    They all full well knew what they were doing, or should have. No excuses. They have well and fully dug holes for themselves that have forced themselves to endlessly fundraise for many years old competition. They have been sidelined by themselves.
    The party also made things worse with an extended leadership campaign that dragged things out.
    These jokers have been irresponsible. Can you imagine how they would have managed our money?

  17. Shadow, right now a person *could not* give $1,200 to each candidate in a leadership race. I *think* your comment indicates you understand that point, but just to make it clear for anyone else reading, the rule says you can’t give any more than $1,200 ($1,100 at the moment, but soon to be $1,200) IN TOTAL to ALL the candidates combined.

    So, if you’d already given $1,100 to say Stéphane Dion at the beginning of the race, you would not be able to give anything at all to Gerard Kennedy now, no matter how much you wanted to help him pay off his debts.

    Now, if your idea is to impose a maximum contribution to any candidate, which is less than the overall contribution ceiling, that is certainly one idea. But it still doesn’t solve the problem of the pot running dry after a certain point. If the law prevents people who are trying hard to follow the law from actually doing so, it doesn’t pass my fairness test, no matter how big a mistake they may have made in the beginning.

    To the point in your earlier comment about an incentive structure that promotes following the rules and not over-extending themselves, the concept of an expenditure ceiling would probably have to figure in there somewhere. The current system limits contributions, and the ability to raise contributions, but not spending.

    I’m sure one candidate in particular would probably be quite happy to have posted a bond to EC before the race. But tell me: is that any different than lending oneself money that can’t be repaid? Those with sufficient funds to forfeit a bond in order to stretch the rules would just do that.

    And let’s be clear: the candidates in question ARE following the rules. The rules just prevent them from being able to raise the funds they need to, in order to meet their commitments. Yes, yes, yes, they should never have spent as much money as they did to begin with, and recent bravado about “this should be a million-dollar campaign” aside, frugality can still produce very high quality campaigns. I’m not sure hospitality suites are a public good that needs such heavy underwriting by public policy and the public purse. The top 3 Liberal leadership contenders in 2006 spent as much between them on their campaigns (nearly $10M) as the Conservatives then proceeded to spend on TV advertising against their new leader.

  18. George Pringle says:

    Alice, for the repayment time perhaps but not during the campaign. Until Royal assent is given it is only a bill not a law.
    http://www.parl.gc.ca/LegisInfo/BillDetails.aspx?Language=E&Mode=1&billId=2158135

    Read Harper’s team by Flanagan to see a fundraising strategy that worked and it will be more than $1200 in 2026 when Harper retires.

  19. Yes, for the repayment time. Agreed. For a lot of the candidates, that period of time represented a lot of the fundraising they had to do, however.

    I did read Harper’s Team. But you’ll note that (a) Harper’s leadership campaign was run before that legislation came into effect, (b) there weren’t any contribution ceilings at the time, and (c) the names of the individual contributors weren’t released.

    It’s just to say that whenever Mr. Harper retires (and after this past week, I’m moved to say that I hope he has a good long life before him and his family yet), the next campaign will be fought under these rules.

  20. George Pringle says:

    Mr Harper released the names of all donors who agreed to the release, an act above the standards of the legislation at the time. Since to get the tax receipt you had to donate to the Party as a directed contribution they are all in the Party’s report of the years of each race.

  21. Thanks for that clarification, George. The rules on releasing names shouldn’t be changed retroactively on people, so it seems they did what they could under the circumstances.

  22. George Pringle says:

    The Citizen had an article today and they had this chart. It is clear that some people are trying to raise money and some are bothering. Perhaps the Act should prohibit anyone from running if they owe money from a leadership, nomination or election campaign. That would motivate.

    Candidate Raised in last six months Still owing

    Martha Hall Findlay $26,902 $115,000

    Gerard Kennedy $24,201 $108,302

    Joe Volpe $34,619 $110,090

    Ken Dryden $6,529 $354,121

    Maurizio Bevilacqua $756 $33,164

    Stéphane Dion (based on Dec 2010 report) $4,449 $30,000

    Hedy Fry (based on Dec. 2010 report) $1,351 $77,500

    Read more: http://www.ottawacitizen.com/Liberals+still+haven+paid+2006+leadership+race+debts/5335216/story.html#ixzz1WkPuuxbt

  23. Hey George, I compared a couple of June, 2011 returns to ones from December, 2010, and there was quite a bit more fundraising in the second-half of last year than there was this spring, which makes sense if you consider that Michael Ignatieff was threatening to pull the plug since around Christmas-time.

    If I get a second, I’ll try and compile a cumulative fundraising chart for the various candidates.

    As to your suggested amendment, it sounds like something the CEO recommended in his last report, but I’d have to refresh my memory on the details.

  24. Bob Smith says:

    George,

    The fact that the law was changed after the leadership vote doesn’t take away from the fundamental problem. People ran a campaign (and borrowed money) under one set of rules, only to have those rules changed after the fact (though, granted, the legislation was tabled early in the 2006 parliamentary session, so they at least knew what was coming). More care should have been given to the transitional rules for that legislation (i.e., so that they applied only to leadership contests occuring after the bill received royal asset). Frankly, I’m suprised that the then-Liberal dominated Senate let that bill pass in that form (usually Senators are much better than MPs at catching those sorts of technical problems).

    I’m also somewhat surprised that the legislation doesn’t grant Elections Canada, or at the very least the Federal Court on application from the former candidates, the ability to grant relief from the deemed contribution rule (i.e., to allow the writing-off, or perhaps the repaying out of your own pocket, of campaign debts without a deemed contribution) in appropriate circumstances. I mean, at this point, there’s little to be gained from compelling Ken Dryden (or Hedy Fry, or Stephane Dion, or Belilaqua) to spend the next few year or so beating the bushes looking for people to help pay off his campaign debts (and given his sharply reduced profile and a new leadership race, query whether he will ever be successful). That relief could be denied where, for example, the loans were not bona fide, or where there was never any intention to repay them (or where candidates have made no intention to raise funds to repay them), but should be available as an escape valve.

  25. George Pringle says:

    Bob, I agree the rules should have been fully grandfathered, likely this is a case where Elections Canada made one of “interpretations” like convention fees being declared donations. But as I have put forward to Alice the limit is not the case of the problem. As the the first filing which was under the old rules, only 253 donations came in over at $5400 or over, 1106 at 1100 and out of 10556 contributions.

    The problem is caused by campaigns that did not fundraise when the iron was hot because of the existence of loans which I would have completely rewritten, no one prohibited from donating can loan a candidate money and only to the donation limit (counting contributions as well) so that if it is not repaid it becomes a legal contribution. Only Dryden even personally donated the limit to his own campaign, $10,800, although Rae and Kennedy put in over $10,000.

    Since there is no way of determining the intention of repayment there is too much chance that the precedent would be used by future irresponsible candidates in the future and the loan problem has probably occurred in nominations and in election campaigns.

    All the ND potential candidates who may be considering vanity runs to increase profile to advance their chance at future potential Cabinet seats or to raise awareness on the pot laws better write a realistic campaign budget and fundraising plan.

    Alice, I don’t see the post 31 May 2007 filings?

  26. Bob Smith says:

    “Since there is no way of determining the intention of repayment there is too much chance that the precedent would be used by future irresponsible candidates in the future and the loan problem has probably occurred in nominations and in election campaigns.”

    I disagree. For example, if you look at the Income Tax Act (Canada) you’ll see similar intent based rules (not coincidentally, also dealing with loans, and considering whether they were bona fide) which both the CRA and the courts have been able to interpret and administer in a coherent fashion. I don’t see why Elections Canada and the Federal Court can’t interpret and apply similar rules in the context of campaign fundraising rules. Similarly, the Income Tax Act also contains provisions will allows the CRA to grant relief from interest and penalties in appropriate cases. I’d like to think that Elections Canada is at least as competent as the CRA.

    And why are we concerned about irresponsible candidates? The rationale for the deemed contributions rules is that we don’t want people buying influence or well-to-do individuals having an advantage in campaigns, not to discourage long-shots from running for party leadership (indeed, that’s probably the last thing we want to do. Frankly, I’m quite glad the old rules encouraged long-shots to run – otherwise the Tories probably wouldn’t have had Dion to kick around in 2008).

    And waiving the deemed contribution rules for bona fide, but now bad, debt doesn’t really get irresponsible candidates off the hook. After all, those debts are still outstanding and still have to be repaid (or, in the case of loans to oneself, that money is gone) – indeed, one would think a basic requirement for bona fide loans is that the creditors insist on repayment (assuming, of course, that the candidate has assets). I don’t know about you, but the prospect of having to pay back (or write-off) a few hundred grand out your own pocket seems like a pretty significant deterrent to frivolous candidates.

  27. George, you need to look under the heading “Interim Leadership Reports”. Here’s the link.

  28. George Pringle says:

    Thanks, Alice.

    These figures have been put in actual database, an obvious error by Elections Canada.

    Maybe when it’s all over they will consolidate the data properly.

  29. I’m not sure it’s an error, per se, George.

    The returns are posted under a different section of the Act. The CEO can’t do a lot of things unless they’re provided for under the Act, though in some cases if the parties/candidates agree, he can post things on an ad hoc basis on the site. For example, the Conservative Party asked him to post their amended return one year, but there was no obligation nor any requirement to do so; the CEO did it anyway in the public interest.

    I’ll be the first to agree that these legalistic differences make their website difficult to work with. But that’s the advantage I can offer at Pundits’ Guide (though I’d like to clone myself to get everything done).

  30. George Pringle says:

    Kady O’Malley just posted during the ND race announcement

    kady:
    I’ll be shocked if the govt doesn’t revive the bill to ban leadership loans from non-commercial entities the day the House gets back.

    With an low entry fee ($15,000) but a low spending limit ($500000) will we see a lot of “have no chance of winning” candidates with union and special interest group loans cluttering the race? Here comes Dana Larson and Libby Davies!

  31. There are other registration requirements as well, George, including 500 signatures, and passing the same vetting process as federal candidates.

  32. George Pringle says:

    Do you see those as a barrier? Dana ran for BC NDP Leader with tougher requirements.

  33. I guess he can always try. Presumably you’re offering to give him a hand, George? ;-)

Leave a Reply