1995 Legislative Session: 4th Session, 35th Parliament
HANSARD

The following electronic version is for informational purposes only.
The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, JULY 10, 1995

Afternoon Sitting (Part 2)

Volume 21, Number 25

[ Page 16777 ]

The House resumed at 7:16 p.m.

[L. Krog in the chair.]

Hon. C. Gabelmann: I call committee on Bill 28.

ELECTION ACT
(continued)

The House in committee on Bill 28; L. Krog in the chair.

On the amendment to section 180(5)(a) (continued).

L. Fox: After several days -- in fact, it was late Thursday afternoon when this discussion was adjourned -- I'm hoping that the Attorney General has had time to reflect on the amendment put forward by the Liberal opposition member.

I personally rise to support that amendment. In doing so, I want to quote the member for Cowichan-Ladysmith and the Attorney General from earlier parts of the discussion on this. In both cases, both members suggested that when we compare.... In the case of the member for Cowichan-Ladysmith, she said that when we compare provincial elections with municipal elections, we are comparing apples and oranges: there is no defined campaign period in municipal elections. That was that member's point. When we look at the Blues and at the comments from the Attorney on the same issue, he stated: "The digression about the Municipal Act is ridiculous. I know of no campaign at the municipal level that is anywhere akin to the kind of campaign that's run at the provincial level."

I don't disagree that campaign costs at the provincial level are more than at the municipal level in most areas of the province. But I think the Attorney General would also have to agree that we're not talking about the amount of the costs or the level of the campaign here, nor about the level of campaign. We're talking about a principle of whether or not all candidates have equal opportunity, and therefore whether the campaigns are fair in terms of the process. So whether a municipal election in Vancouver costs a candidate $15,000, compared to a provincial election -- for instance, in my riding my budget was around $35,000 -- is not the issue. The issue is whether or not there is a level playing field, and whether or not there's a balance in the constraints upon a campaign. I would suggest that it is indeed the same, whether it's a municipal election or a provincial election. To that end, I discussed at some length section 89 of the Municipal Act -- municipal elections -- during third reading of 1993's Bill 35, and had this assurance from the minister of the day: "If it's on their own time or their holiday time, whether they're union, non-union or whatever, the answer is no. But if they're being paid for it, or the union or whatever organization is paying for it, it has to be indicated and is a donation."

Clearly, the attempt in the municipal election act is indeed to provide a level playing field. Irrespective of what amount of money is being spent on campaigns, it's the principle that we're talking about with respect to section 180 and to the amendment being put forward by the Liberals. I cannot understand the comments from the government side suggesting that the principle contained in the Municipal Election Act is somehow different than the principle of the legislation without this amendment, and that it's fair. I submit that it's not fair. We should support the amendment put forth by the Liberal critic; we would therefore have a balance in the system. So I support the amendment put forward.

D. Mitchell: I too believe that section 180 is a very critical section of this bill. In fact, it's the first controversial section we've arrived at, after a very lengthy debate in committee. I'm not so sure that I agree entirely with the member for Prince George-Omineca on this particular amendment, moved by the member for West Vancouver-Capilano. While I too would like to see section 180 of the bill amended, I'm not so sure that this is the exact amendment that the bill requires.

When I first looked at the amendment moved by the member for West Vancouver-Capilano, my initial reaction was that I thought it was sloppily drafted. But when I followed the debate very closely last week on this amendment -- and we've had some extensive debate on the amendment already -- the more I heard about the amendment, the more the member for West Vancouver-Capilano spoke to it, and listening to the hon. Attorney General's objections to the amendment, I perceived a real problem. While I too think that section 180 of the bill, which deals with political contributions and how they should or should not be accounted for within the guidelines of this bill for disclosure and for quantifying campaign contributions.... There's a problem in the bill. The hon. Attorney General pointed out that this amendment doesn't jibe with the private member's bill that was introduced in a previous session by the member for West Vancouver-Capilano.

I can only say that the hon. Attorney General is too hard on the member for West Vancouver-Capilano, because surely you can't expect members of that Liberal Party to be consistent in their views; that's going a little too far. Yes, the member for West Vancouver-Capilano did bring in a private member's bill on election campaign financing. In fact, I am very familiar with the individual who helped him draft that bill, and I think it was a fine piece of legislation. It's not consistent with this amendment brought forward by the member for West Vancouver-Capilano, but that in itself is not a surprise. But this new position of the Liberal Party deals with whether we should consider a political contribution of an individual who is self-employed in different terms than that of an individual who is an employee. And I have to question why that would be.

It's especially timely that this amendment to this crucial section of the bill should come forward at a time within days of when the spending limits for the recent Abbotsford by-election were disclosed. That's particularly relevant, given the fact that the Abbotsford by-election -- the most recent electoral contest using the existing provincial election law -- spending came forward, and we see that the Liberal Party of British Columbia spent $170,000 in that by-election campaign. That's a lot of money.

Interjection.

D. Mitchell: The newly elected member for Abbotsford, the newest member of this assembly, has been quoted in the press as saying that he thinks it was excessive.

The interesting thing is.... This is very revealing, because we think we're moving towards an age of 

[ Page 16778 ]

constituency-based politics, where the constituency really rules. I know the member for Nelson-Creston believes in that, because he has spoken to that principle as recently as last week in this House, and about how an idea comes forward from a constituency and perhaps, if you're lucky, it gets translated into provincial policy, and wouldn't that be grand. The member for Abbotsford has said that not only was he surprised and amazed at $170,000 being spent to get him elected to this chamber....

An Hon. Member: And more.

D. Mitchell: And more. That's only what we know was spent officially. That's almost four times what his closest rival in the Reform Party spent, and they just narrowly defeated the Reform Party in that by-election. But the interesting thing is that the member for Abbotsford said he thought that what is crucial in by-election campaigns is knocking on doors. His own constituency raised $32,000; almost $140,000 came from downtown Vancouver. It came from downtown Vancouver, and it went out to Abbotsford. It came from the big Liberal machine outside of the riding, and it went out -- $140,000 -- to pay for that by-election.

What was regarded as a political contribution in that $140,000? For instance, the day after the by-election, a Vancouver Sun political columnist known as Vaughan Palmer wrote a column indicating that the crucial assistance of a former prominent Social Crediter, Jacee Schaefer, played a decisive role in the by-election. I don't expect the members of the Liberal caucus in this assembly to try to defend this, because I know they did not play any role in that by-election campaign.

G. Wilson: What?

D. Mitchell: The members of the Liberal caucus did not play any role in that by-election campaign. The member for Powell River-Sunshine Coast may be surprised at that, but we know that there are different levels of Liberalism in the province today. The members of the Liberal caucus play a very little role in the machinery of the Vancouver Liberal machine.

Jacee Schaefer did play a key role, apparently, so much so that according to Vaughan Palmer, on victory night, at the Liberal campaign headquarters, the winning candidate -- who's now a member of this House, the member for Abbotsford -- paid special credit in his acceptance speech to Ms. Schaefer, because "she made it happen today." The leader of the Liberal Party also paid special tribute to her.

Were her services regarded as a political contribution? I think that's the key part that we need to understand. We know that the Liberal Party spent almost $140,000 from downtown Vancouver, outside of the riding, to win that by-election. That $170,000 is more than would be allowed under this Election Act for a constituency to spend, I think. Was Jacee Schaefer's salary, which is paid for by a casino company, included in that $140,000 or so? Were the other individuals who may have donated insurance company services or travel agency services, or all of the others included in political contributions? Why is it that the Liberal amendment seeks to say that the services of an individual who is self-employed should not be regarded as a political contribution? I don't think this is the amendment that this section requires.

It is important to try to balance it, which is something that the hon. Attorney General spoke to in this debate. How do you decide what a political contribution is? If someone is a trade union organizer or works for a real estate company or is a teacher or works for a travel agency, how do you decide? If they contributed to a campaign, and someone is continuing to pay their salary, or they're continuing to earn an income of some kind, how do you decide how to measure the value of their political contribution in dollars? It's not easy.

We all know that when it comes to a provincial election campaign -- not a by-election -- political parties will try to target swing ridings. There may be ten or 12 swing ridings in the province that a party will have to target in order to become government. We also know that if a political party had the resources to bring a handful of organizers into those swing ridings -- paid by somebody else, not by the party -- it could be decisive. We also know that when the limits are $50,000 per riding, if you bring in ten organizers, and they're all being paid well -- let's say that they're being paid up to $5,000 a month by somebody else -- that eats up the whole $50,000 limit under this act. So that would be a problem. That would be a problem for a well-paid trade union organizer; it would be a problem for somebody in the business world, or anybody else who's earning that money.

[7:30]

The hon. Attorney General has said that political contributions will not be counted under these circumstances. The amendment moved by the member for West Vancouver-Capilano seeks to change that by saying that if those services are truly volunteer, they're okay; they're not a political contribution unless the individual is self-employed or is an employee of another employer. I'm not sure why you need the two categories. If we're going to try to count all political contributions of all kinds, we should try to do that. It's not going to be easy. The Attorney General has pointed out the obstacles. It's not easy to quantify that, but we should either try to do it or we shouldn't.

This amendment is faulty, because it conflicts with the $50,000 limit that is proposed. Now, $50,000 is a lot of money, hon. Chair. I can tell you that in my campaign in 1991, I raised and spent over $40,000 in my constituency. When I looked at the list under the Election Act after the election, I was in the higher range of what was spent on a per riding basis. We're now talking about moving that up to $50,000, which is a lot of money. But if we were to value all political contributions, including the kinds contemplated by this amendment, we are going to have to boost up that $50,000 limit significantly, especially if individuals working on campaigns are going to be receiving income or working for somebody else for the 28 days of the election period -- roughly one month; we're going to have to count their monthly salary. So that's the problem I see here. I think the Attorney General has tried to address this. This is not an easy section to deal with, but this amendment doesn't do it, so I am speaking against the amendment.

G. Wilson: In listening to my colleague from West Vancouver-Garibaldi and looking at the amendment, I wonder whether any documented research has been done with respect to this section on political contributions that actually verifies or ties this notion of expenditures by various groups with electoral success. If we were to actually look at this business -- because there's a lot of fanfare around whether one group can work and the others can't, or should you be looking at a private business person's expenditures, and so on....

[ Page 16779 ]

One of the things I find quite interesting is that if we were to look at this notion of expenditures.... We just heard that in the most recent contest this current Liberal Party -- if we can use that term so loosely -- spent in excess of $170,000 that we know of getting their candidate 5,434 votes: $179,000. If we go back to 1991, the candidate who was running for the real Liberal Party, Cal Wickham, spent $1,188.88 and took 6,372 votes and lost -- lost narrowly, but was still in a losing cause. So the old Liberal Party -- the real Liberal Party -- was able to manage 6,372 votes for $1,188.88. This new and improved Liberal Party had to spent $179,000 to get roughly a thousand votes fewer and just sneak by.

I don't understand why there's such fanfare about this amendment, or trying to move this amendment into this section, because I'm not sure that the two are necessarily correlated. That's why I wonder if any research has been done, because it strikes me that the people aren't always going to buy big-dollar campaigns. I think there's another section that we need to look at, and that is making sure that all contestants in the election are properly represented and that they're not subjected to being totally ignored in the media coverage or to some really outrageous headlines, for example, being next to photographs which taint voters as they get close to the poll date. I wonder if the Attorney General has any of that research.

Hon. C. Gabelmann: If there has been much research on this -- and I doubt that there has been -- I haven't seen much of it. I guess my comment about that would be that the $170,000 expenditure, compared to the approximately $40,000 expenditure of the Reform Party, was sufficient to make the few dozen votes' difference. In effect, it meant that the Liberals bought that election by spending an additional $130,000 or thereabouts in order to gain a couple of dozen votes, which was sufficient for them to win the by-election. That's the kind of relevant information that members should have.

I don't know how much empirical data has been collected, frankly, but it's clear that there has been a historical pattern in the country prior to the introduction of spending limits a couple of decades ago in various jurisdictions -- a historical pattern which has indicated that moneyed candidates have been more successful than unmoneyed candidates. I think there are always exceptions to that, and 17 seconds on television sometimes can help to provide an exception to that. There will always be exceptions to it in the future. The number of votes one gets isn't directly related to the amount of money one spends, but if you can pour millions into it, you might be able to pick up a couple of dozen more votes. In some cases, it's all that's necessary to buy an election.

G. Wilson: Just a last comment on the amendment, and then I would reserve comments again for the main section.

What the Attorney General is saying is that the aggregate expenditure is what's at issue here, not whether that expenditure comes from somebody who is self-employed, released from other lines of work or whatever. What we ought to be doing, presumably, is simply to be putting a ceiling on expenditures from whatever contribution it is. If that ceiling was something that was acceptable.... I personally think they are way too high in this bill, and I've made that clear. I've just demonstrated that with what I might call sound leadership, you can command 6,372 votes for $1,188. When you don't have that, you have to spend $179,000 to get 1,000 fewer votes, but that's my biased view. Let me just ask this. If it's the aggregate amount, then in the Attorney General's opinion, this amendment would not change the aggregate amount that could be spent. Is that correct?

Hon. C. Gabelmann: I'm not sure I fully understand the member's question, and he may want to come back at me on it. The difficulty we have and that any parliament has, I think, on this particular issue, which is dealt with by section 180, by the amendment or by any other version that could be adopted, is the question of valuation.

How do you put a value on the various kinds of contributions that individuals make? It's very easy to put a value on if there is an hourly wage, a monthly wage or even an annual salary. It's very easy put a valuation on the amount of that contribution, but there are a whole range.... The member for West Vancouver-Garibaldi has made the argument very effectively, and I agree with much of what he said, that it is very difficult to put that same valuation on any number of people who may end up working full-time in the campaign but who don't get wages or salaries. That's the difficulty we faced.

The choices were to try to find a fair way of valuating everybody or to say nobody in that category is counted. I know of no way of providing fair valuation for everybody in that situation. We therefore opted for excluding everybody. That has the effect of driving the limits up -- no question. To the $50,000, one needs to add a plus because of that non-counting of that additional valuation. But there's a limit as well to how effective a campaign can be, with bodies tripping over each other, so one gets to a point in a campaign where it's counterproductive. There's a bit of a natural supply and demand that comes into play here.

In any event, come what may, with the arguments we made on both the amendment and on section 180, everybody knows what the issues are. They're not simple, not easy and not black and white. We've made a choice for fairness, in my view. That's the way it's going to be.

J. Dalton: There are a few points I wish to get back in the record. I might start by saying to my neighbouring MLA that he said he spent $40,000; I spent $15,000, and we had about the same vote count. So if you people want to be casting money and votes and things around....

Interjection.

J. Dalton: I made the point last Thursday, and I'm going to make it again. I'm looking at the Local Elections Reform Act, a government bill of two years ago. I direct the committee's attention to the Municipal Act, subsection 89(3), which is almost verbatim the wording in my amendment to subsection 180(5). I would be very interested to learn from the Attorney General or any member from the government side opposite: why is it that two years ago, when you were dealing with local election reform...? And that's fine; we supported that. I see no problem with getting right down to the local level.

The Attorney General, by the way, didn't seem to want the other day to talk about that bill. What did he say? Another member referred to it earlier tonight. "The digression about the Municipal Act is ridiculous." What the Attorney General is telling this House is that his bill -- a bill of two years ago, of this government -- is ridiculous. Well, maybe that is so.

[ Page 16780 ]

I do not see in any way how this Attorney General, if he wishes to be consistent, can defend his subsection 180(5), which as we know does not catch paid labour, whether that be trade unionists or people employed by MacMillan Bloedel or whatever. I don't care who they are. The fact is -- and I now come to section 10 of the Local Elections Reform Act of 1993, on subsection 89(3) of the Municipal Act: "A volunteer is an individual who provides services for no remuneration or material benefit, but does not include...(b) an individual if the employer of the individual makes the services available at the employer's expense." Why is it that this was good enough then, and suddenly, two years later, all bets are off?

I have one other point on this. Let me refer to Hansard of two years ago. It's interesting to see some of the comments. I'm going to read into the record the comments of a member who is not here to do so himself, the minister who presented this bill at the time.

Interjection.

J. Dalton: Fair enough. Very good point. The hon. member for Prince George-Omineca said: "I'm not clear on section 89(3), so I have a question for the minister." I was going to read that into the record, too.

The question was: "If an individual who happened to work for a union took time off -- and his pay continued -- to actively be part of a campaign, is that considered under the valuation of campaign contributions and election expenses?" I'm sure the member for Victoria-Hillside -- who is not here in this House, as I said -- would be very pleased to get to his feet and remind the Attorney General of his response of two years ago. In fact, that was on July 28. I'm wondering whether we'll still be here arguing this point on July 28 two years later. The member for Victoria-Hillside said in response: "If it's on their own time or their holiday time, whether they're union, non-union or whatever, the answer is no. But if they're being paid for it, or if the union or whatever organization is paying for it, it has to be indicated and it is a donation. That has to be declared." That is exactly on point. There is no valid distinction between the two points, even though the Attorney General will tell us that the bill of two years ago is ridiculous.

The wording of my amendment catches this. We're prepared to stand up and be counted on this issue, but the Attorney General is not prepared to stand up and be counted on this issue. His bill is inconsistent with the previous government bill that deals with the same general principle. The hon. member for Prince George-Omineca made a very good point earlier: "Let's have a level playing field." This playing field is not level. As a rugby player, I wouldn't want to go onto this pitch because it is totally unfair, and I'm just wondering who's the referee. Who's going to be blowing the whistle in the contest that's coming up?

I would be interested to see if the Attorney General is prepared to get to his feet and defend the inconsistency between a government bill of two years ago and the bill that he is presenting to this House tonight, and explain why my amendment should not be endorsed, because it is right on point and it covers the issue that we are debating.

[7:45]

Hon. C. Gabelmann: We had some choices. I think I've been through this before, so I'm not going to belabour it. One of the choices was to live in the past with a two-year-old -- within two weeks, I guess -- government position or live in the past with a 28-month-old Liberal Party position. We chose to live in the past with the Liberal Party position, because it actually made more sense from our perspective.

The member alluded to -- I don't think he meant to -- an issue that creates yet another problem for valuation: holiday time. Who determines whether this salaried employee is on holiday or not? How many weeks of holiday does an individual get? How much banked holiday time has been earned by an individual who...?

Interjection.

Hon. C. Gabelmann: If I had responsibility, I would.

How much banked holiday time can be considered? I suspect that every trade union staff rep I know could probably claim six months' worth of banked holiday time, given the hours they work at the weekends and in the evenings. I know from my own experience as a trade union rep that 16 hours a day were standard; therefore you could claim all those hours and call them holiday time. Under the Liberal amendment, you wouldn't have to declare them during the campaign. So if it's loopholes one's looking for, there are loopholes galore.

What we've decided to do -- rightly or wrongly, and the House will determine what's right or wrong -- is to say that we're not going to try and argue about loopholes or about whether that's a week's worth of banked overtime or about whether someone has leave that's been accumulated for years and is taking it for this purpose. We're not going to argue about whether the business that they've represented or the business that they own hasn't given them a holiday for ten years, so they're taking a month's holiday at this time; or if they're not, how much the business owes them.

The member for Fort Langley-Aldergrove talked the other day about how businesses couldn't operate if small business operators took a day off. I don't know how these same small business operators go to Hawaii for two or three weeks' holiday every year -- if they do -- or to Mexico or to Europe or to the Okanagan with their family.

Interjection.

Hon. C. Gabelmann: They do. They go for a holiday, and they leave their business to continue. If they did that during the election campaign, how do you value it? You can't, and that's the essential issue here.

What we're debating here is three choices: you try to figure out how to value everything, you value nothing, or you do what the Liberals want and say that some things get valued and other don't. We said that it's difficult to try to value everything; it's unfair to try to value some things and not others; it's even for everybody if you value none of it. That's the simple choice we made.

We've had an exhaustive debate on this, hon. Chair, and I think it will soon be time to conduct the vote.

J. Dalton: I have a question for the Attorney. In light of what he just said, why are we dealing with contribution limits and accounting for expenses when he's on his feet saying that we're not going to worry about valuation? The purpose of my 

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amendment is to say that there are certain things that can be valuated, and they fit the philosophy of the Attorney General's bill. I would like him to comment, if he cares to, on that point.

Hon. C. Gabelmann: Very briefly, it's individuals giving of their own time. That's a personal contribution in many ways, given the length of time that people work in election campaigns each day. The upper limits can be used to purchase television time or other advertising, which may have a fairly dramatic impact on a campaign.

G. Wilson: Before I vote on this amendment, I really want to make sure that I vote the right way. I wonder if the Attorney General could tell us, under this amendment, given his familiarity with this section of the act, how a volunteer -- if these are indeed volunteers -- such as Mr. Lyle, the former adviser to Premier Gary Filmon and former campaign manager for Rita Johnston, who worked on the Liberal campaign.... How would that be tied? I wonder about Stewart Braddick, who was the party director of operations, and John Aisenstat. The latter was Mr. Campbell's tour director; the former was a federal Tory organizer who worked on the Liberal campaign. How would they be classified in this? I also wonder about Mr. Kelly Rickart, a former assistant to Socred minister Bud Smith, who worked on the Liberal campaign in Abbotsford. How would he have been tied into this amendment? Jim Arthur is a federal Tory organizer; I wonder how he would fit. Another one is Sharon White, who was a 1991 Socred candidate and organizer, and was involved with the federal Tories. Mr. Jack Heinrich is another example. I wonder how that would fit into the Liberal amendment. Also, of course, there's Jacee Schaefer, a former Socred organizer who lobbies for the casino and gambling industry in B.C. How would these people be equated into this amendment? Would they be seen as donating time? These are people who are longstanding political organizers, longstanding Socred-Tory organizers, who have now come into the service of this so-called Liberal Party and are working in their back rooms. Maybe the minister could tell us how that would fit into this amendment.

Hon. C. Gabelmann: It almost sounds like a rhetorical question. Actually, I think it is a rhetorical question; however, it's a good rhetorical question.

It depends upon the way in which these people are being remunerated. If one or two of them -- and I not going to name names; the member has done that -- are on salary or wages from an employer of some kind, then under the Liberal amendment they would get counted. If, however, they are not, and they are under some other arrangement, they would not be counted. It's a question of how their employment was manipulated and masked.

D. Symons: I'd just like to point out that the question raised by the member for Powell River-Sunshine Coast is precisely the reason that we think such an amendment should be there. He was trying to point out that somehow the Liberals had an advantage in the by-election. We're simply saying that those advantages should be counted. Whether they be for the Liberal Party, the NDP or, heaven forbid, the PDA, we want them counted.

You have tried to make differentiations between types of donations of service, so that if somebody donates an office or material -- telephones, a telephone bank, whatever -- all of that counts. You're saying that you don't want valuation, but in other sections you have referred to those as things that do count as valuation. What we are saying, simply, is that if somebody is paid a salary by a third party, that salary should be counted as a contribution by that third party to the election campaign of whoever it is. That seems to be fair, and it would be fair for everybody.

Earlier there was mention of real estate salesmen and so forth. They are not paid a salary; they are not paid if they're not out there selling real estate, so it doesn't really matter, in that case. But if they are paid a salary by somebody to work on behalf of a political party, that is indeed a contribution by that employer to that political campaign. It should be counted as a contribution, and it should be counted as an election expense by that constituency, party or candidate.

It is very simple. If it's a contribution in kind or in labour, it should end up being counted. We're trying to say that, whereas the minister is saying that somehow we can't evaluate this. Yet you've evaluated for materials supplied and everything else; you're saying the value of that counts as a contribution. Well, the value of a labourer counts, and it's very easy to ask the employer: "How much was he paid over that period of time?" It's very easy to evaluate it.

G. Wilson: Hopefully, this is my last comment on this amendment, because I really want to try to understand it. I think that the member for Richmond Centre is wrong when he reads his own amendment, because (5)(a)(i) says: "The value of the following is not a political contribution...(i) an individual who is self-employed, if the services provided are normally sold or otherwise charged for by the individual...." Well, most of the people that I read out here are not going to be reported. In fact, this amendment would allow them to come in and work totally unreported. That was my question and why I read that into the record.

D. Mitchell: Just one further question on this amendment. I'm having trouble with the amendment too, obviously, based upon my previous comments. I'm trying to understand how it might be or could be an improvement over section 180. Could the hon. Attorney General tell us...? He's indicated that there is a problem with valuation. I think that what the Liberal amendment is trying to do is suggest that there might be a way to provide a valuation of political contributions during election campaigns to political parties, where an individual might be receiving remuneration from another source and at the same time working on a campaign for a candidate or a party. I think that that's the direction the amendment is going in. I'm not sure it does it very well, and I think it's drafted quite sloppily. But having said that, the Attorney General says that it is difficult, very challenging and maybe even impossible to provide that kind of evaluation.

Could the Attorney General tell the committee if it is possible to account for the contributions of individuals under these circumstances without providing evaluation in dollars but simply by accounting for individuals who are contributing to campaigns and receiving remuneration from another source? Would it be possible to simply have a list of those individuals: a list of individuals who are contributing to a campaign, either on a completely voluntary basis or on a 

[ Page 16782 ]

partially or completely paid basis? Could there be at least that kind of accounting? Would that be one way around it? We wouldn't get to a dollar value, but at least we'd be able to see disclosure.

Hon. C. Gabelmann: At first thought, it seems to me to be very difficult. If you have 1,000 volunteers in your campaign, you would have to make a determination as to which of those volunteers would be on that list. Is it those volunteers who give an evening a week? Is it those volunteers who give every evening a week? Is it those volunteers who give every afternoon, every day of the campaign? Is it those volunteers who have an independent source of income and give eight and a half hours? What about the ones who give seven and a half hours? I suspect that the member's attempt at finding other compromises here is probably as difficult as this question was in the first place.

L. Hanson: I have little difficulty supporting the motivation behind the amendment, but I have to vote against the amendment because it says, "The value of the following is not a political contribution..." and then it goes on to explain what isn't a political contribution -- except that the last paragraph would seem to argue with the first paragraph. I have to vote against the amendment for that reason. But I think the minister's protestations that the calculation of service provided in lieu -- or at least the reporting of services provided.... They are pretty weak, because this government has demonstrated in a number of cases that it can determine the value of contributions and the value of workers very quickly; I'd suggest the fixed-wage policy that we saw brought in earlier.

But I think the principle behind the intent of the motion is a very supportable one in the sense that what we are trying to do is declare to the public those people who have contributed and who may have some influence on the party's political policies and future. That's really all we're trying to determine, not the fact that somebody donated $50,000 or $55,000. We're trying to find out who donated what so that there is some public scrutiny of the motivation behind it. With those words, I understand the motivation behind the amendment. I can't support it, because I don't think it says what the member is trying to put forward.

[8:00]

C. Serwa: I'll speak briefly on the amendment and perhaps a bit more on the section, because they're basically intertwined. I remember in second reading when the hon. Attorney General spoke on the relationship of the Election Act to Ivory Snow -- 99 44/100 percent pure, I believe the Attorney General said. I think we in this Legislature recognize that the part that is really not very pure in the Election Act is the section we're discussing, and with the amendment that we're presently debating, fundamentally what we have to recognize.... The debate we have had with respect to the amendment is the debate that's going to continue on this particular section. What makes this part of the debate necessary is the limits on spending. The government of the day was left in a difficult position, with the question of how to accommodate historical practices they have utilized in elections and not be stuck with the accounting for it. That's where section 180 came in, and what we're trying to do is play with the symptoms.

The reality is that not one member in this House believes that you can buy an election in British Columbia or in Canada -- not one member. Is there evidence supporting the idea that you can buy an election? I think not. If we look at the referendum process, for example, and recognize that many millions of public taxpayer dollars were spent on supporting the Yes vote, and if we look at the referendum on the constitutional accord, or at the amendments to the constitution, and recognize that the Yes group included the government of Canada, ten provincial governments and two territorial governments.... It had the support of big business and the support of banks. It was well organized, well promoted, and it failed. It failed because of a small campaign conducted by people who did their research. It was a sincere effort on the part of a group of unorganized individuals, and that referendum was defeated.

Social Credit spent $6 million on the last provincial election. I represent a $6 million investment. I suspect that they may not have got their money's worth; nevertheless, I'm happy to be here. The reality is that in spite of that expenditure of funds, the election wasn't won on that basis. I guess the point I'm trying to make.... We can go back to Abbotsford. I listened to some of the debate on the amendment when the Attorney General tended to agree with members on this side of the House that, yes, indeed, the amount of money did buy that election. I called out that it was conjecture, and I really believe that, because the reality was that enough other parties were represented that they drew off some of the vote. The Reform Party was devastated by that election loss -- devastated because they had the right candidate in the right constituency. They should have won, but they didn't. Now, it's easy to cry foul and say somebody spent $170,000 and bought the election, but I suggest that's not the case. Enough votes were pulled off by the other parties that it resulted in that particular election loss. They were appealing to the same group of people. That has a higher probability. The Reform Party didn't get their voter turnout; with their phone banks, the Liberals did get their voter turnout.

Interjections.

C. Serwa: The $170,000 didn't get the voter turnout.

An Hon. Member: Sure it did.

C. Serwa: The phone banks weren't accounted for.

What this piece of legislation does -- and I know what the intent of the amendment is -- is try to overbalance the election process in favour of the government of the day, the New Democrats. What this particular section does -- and the amendment doesn't nullify the effect of this section -- is give the government of the day, the New Democratic Party, an advantage of 5 to 10 percent in the popularity polls, because of their support groups. Through this particular process, they can spend inordinate amounts of money through the labour unions that support them.

In by-elections in the south Okanagan, in Okanagan-Penticton, there were teachers from School District 23 who, I presume, booked off on sick leave. They got paid full wages and went to contest the by-election, which allowed the member for that constituency to be successful. At the same time, our taxpayers had to pay for substitutes. The B.C. Government Employees' Union basically does the same thing. They 

[ Page 16783 ]

call their members, and they work aggressively and ardently on their campaign. The unions themselves hire employees to work on the campaign.

I suggest that legislation which is not going to be enforceable has no business being placed on the books. The problem is the arbitrary decision on the maximum campaign expenditures of a member; that's where the problem lies. Most of us have not spent the kind of money that we're talking of here -- $50,000 -- and I suspect will not spend that. But because of that level, we're faced with section 180 and proposed amendments to section 180. I don't believe that any of this is necessary or that it is really enforceable. This thing will result in a comedy of errors. There are more escape clauses and opportunities here than Carter has pills. Even though the intent is probably good, I suspect the unbalancing factor and the loopholes in there will just make it a real charade.

I think that we would be better served -- rather than debating the amendment or even debating this section -- by removing the limits on election expenditures. There is no conclusive proof that spending inordinately large sums of money wins elections. It frees the government of the day to carry on with their traditional practices, and eliminates all of the second-guessing and sleuthing to try to discover who is what and how much has been spent. It doesn't make a lot of sense. It makes a great job opportunity, perhaps, for lawyers or for a large civil service to scrutinize this, but I'd suggest that you'll never get to the bottom of this. So the section doesn't make much sense, and I suppose, in saying that, I'm saying that the amendment doesn't make much sense, either.

The Chair: I want to thank the member for Okanagan West for his words, and I'm sure he wishes to continue being known as the member for Okanagan West, as opposed to being known as the $6 million member.

Amendment negatived on the following division:

[8:15]

D. Mitchell: I have a question for the Attorney General about section 180. Section 180 is trying to determine what is a political contribution, and subsection (5) says: "The value of the following is not a political contribution...(d) publishing without charge news, an editorial, an interview, a column, a letter or a commentary in a bona fide periodical publication or a radio or television program...." Why would that not be a political contribution under the terms of this act?

Hon. C. Gabelmann: We strongly believe in freedom of the press.

D. Mitchell: I'm just trying to understand this section and how it would relate to another section of the bill that prohibits third-party advertising, for instance. I'm just wondering if there's any conflict between this section, which says that publishing materials in a bona fide political publication is not a political contribution.... And yet there's another section of this bill that says that third-party advertising must be limited to $5,000.

Hon. C. Gabelmann: Let me try to deal with it by way of example. If Rafe Mair wants to go on the air during his editorial supporting the Reform Party -- which, no doubt, he will -- he is free to do so, and there's no problem with respect to limits. But if one of the CKNW advertisers wants to spend money to promote the Reform Party, then those expenditures have to be included within the Reform Party's limits. It's as simple as that.

D. Mitchell: I take it that the Attorney General is saying that Rafe Mair's opinion is worthless. That's an interesting opinion. Maybe we'll debate that under another section of the bill, although the Charlottetown accord may have proved otherwise. That's debatable, I suppose.

How does the Attorney General define a bona fide periodical or publication under this section? What is bona fide?

Hon. C. Gabelmann: Let me give the member an example of a bona fide publication and a publication which is not bona fide for the purposes of this section. The NDP publication The Democrat would have difficulty being a bona fide publication if it were turned into a campaign leaflet and distributed to every home in the province. On the other hand, the Vancouver Sun would be a bona fide publication. They may not believe me when I say this, but that's the fact.

D. Mitchell: I can understand when a bona fide publication is a print publication. Would that also relate to the other categories of media listed in this section: radio and television programs?

Hon. C. Gabelmann: The same principle applies. I want to hear where the member is going before I get myself any deeper into this one.

D. Mitchell: The Attorney General has told the committee that there are bona fide print periodicals or publications and there are some that are not bona fide for the purposes of this Election Act. We're not talking about the hon. Attorney General's own personal predilections for reading material. Would that same definition apply to radio or television programs? Would there be examples of radio or television programs which -- following from this section, for the purposes of this section of this act -- would not be bona fide? Cable 

[ Page 16784 ]

television shows might be one example, as opposed to network television shows. Would something that may have been recorded previously on a radio or television show but is circulated for campaign purposes be included?

Hon. C. Gabelmann: In the final analysis, if there are grey areas, the courts will end up determining what is bona fide and what isn't. But the Interpretation Act has a definition of newspaper, which in effect talks about bona fide publications. I think the term "publication" has to apply here, whether it's print or electronic, and I don't think a principled distinction occurs. I'm trying to think where the member is going with this. If a particular radio station determined that it was going to elect a certain party or candidate and used its airwaves to do so and it was clear and unmistakable, one would have to look at some of the questions about what is bona fide. But that's not something that I can answer here in the abstract, in the theoretical.

D. Mitchell: Let me get a little more specific and move on. Subsection 5(e) deals with matters that are not a political contribution if they are "broadcasting time provided, without charge, as part of a bona fide public affairs program." For the purpose of this act, how would one define a bona fide public affairs program?

Hon. C. Gabelmann: For those of us who aren't Latin scholars, bona fide means in good faith. I'm not the Latin scholar. First of all, a test comes with that that needs to be met. This is to ensure that free-time public affairs broadcasts on behalf of particular parties -- which historically have been done by CBC, anyway -- would not be caught by the limits. If there's a two-minute free-time spot but it's offered according to a formula which has been approved by the CEO and that whole process and is part of the election campaign, that wouldn't be counted. I think that's what is attempted to be caught here. But I go beyond that. If the host of a particular radio station has an opinion, that opinion isn't going to be considered advertising on behalf of a particular candidate.

D. Mitchell: I think I'm starting to understand what the Attorney General is saying on this. I'd like to give one example. Let's go back to the hon. Attorney General's favourite broadcaster, Rafe Mair, who he referred to earlier in debate. If Rafe Mair were to give time to candidates during an election campaign on his program, which could be categorized as a public affairs program.... I think he's done that in past elections, actually. He allows individual candidates to call into the program and speak on their own behalf. I take it that that would not be regarded as a political contribution under this act. I think that's what the Attorney General is saying.

Let me ask the Attorney General a question dealing with media with respect to the Internet. Would the Internet be regarded as a bona fide media -- periodical, publication, program -- under subsection (5)? Would someone who is advertising on the Internet, so to speak, or who is communicating on the Internet and advocating on behalf of a political party or an individual candidate be regarded somehow as making a political contribution? Would that be captured under this section of the act? If the Attorney General could express an opinion.... Would that be captured under any section of this act? Is the Internet off-grounds as far as the Election Act is concerned?

Hon. C. Gabelmann: My view of the Internet is that it is simply a replacement or an alternative communications means that is an equivalent to those of us who still write letters or make telephone calls. It is a personal communication from one individual that can be read by another. In the case of the Internet, it has the ability to be picked up by a whole bunch of people, but it's still one individual. It's not an advertisement. There's no cost involved. There's no payment for the "advertisement," and therefore it's not an advertisement; it is simply a communication.

It would be like an individual.... If I can take this off the top of my head -- and I might get in trouble for this, because somebody will no doubt tell me that I'm wrong.... It would be like the member for West Vancouver-Garibaldi having a supporter standing and talking at the corner of Clydesdale and Marine Drive -- if those two streets intersect, and if it's in his riding -- and having several dozen people listen. That would not be caught by this, nor would the Internet, where several dozen or more people may listen to a communication from one individual.

D. Mitchell: I'm not sure that the Attorney General's analogy to the Internet is exact, although it's approximate. When it comes to the Internet, there can be costs, I believe. There can be some limited costs associated with putting material onto the Internet, first of all. There can also be substantial costs associated with preparing the background materials that might be placed on the Internet, whether it be a legal opinion or something that's written by a professional communications firm or a public relations agency that has put forward some material in words, language or graphics. There can be costs associated with the preparation and production of materials prior to putting them onto the Internet.

What I'm asking is whether or not the Internet, as a form of media.... Maybe technically it's not a periodical or a publication or a radio or television program, but because it's not specifically referred to here in subsection (5) or anywhere else in the bill, are we really saying that even if there are significant expenses associated with preparing materials, if they're put on the Internet, they're fair game and are not included as political contributions that need to be disclosed under this act?

Hon. C. Gabelmann: If there were a cost involved in preparing material to go on the Internet -- and that's a big if -- then that would be an election expense, as it would be for the person at the corner of Marine Drive and Clydesdale who's handing out leaflets. The leaflets are an election expense; the words are not.

Beyond that, I think it's fair to say that the Internet is evolving. We're in the early days. There's not much law on this issue yet, so there's a lot yet to be determined. In terms of how this act is written, if the member were to think about two kinds of things that are now available on the Internet.... One is, for example, Votes and Proceedings of this House -- that's a publication. Frequently on the Internet one can pick up the musings of the member for North Vancouver-Lonsdale. That's not a publication; that's an opinion. So that would be my opinion.

It may well be that the courts in determining some specific cases as time goes on may evolve a law that is different from what I say, and what I say may be irrelevant in terms of what the courts might eventually determine. They'll base it on the words of the statute, not on the words of the minister. But I think that trying to find some way of making this distinction is 

[ Page 16785 ]

difficult at this stage. One needs to think about, on the one hand, a publication and, on the other hand, an opinion. I think you go from there.

[8:30]

C. Serwa: I have a few more questions on this particular section, because it raises a lot of interesting questions.

The current government has antagonized and infuriated a lot of businesses in the province. But let's start with a professional group -- let's say the doctors. They have a publication that comes out on a monthly basis. In that publication, without charge, they're conveying at the time of the election their views on the current government and probably their views on supporting other political parties. Is that publication a bona fide periodical?

Our large forest companies, for example, are not really very happy with the current government. They produce newsletters on a regular basis. If they choose to speak ill of the government and support other political parties, are they allowed to do that? Or is it considered an election expense? The political party would not be contributing anything toward it. What is the situation there?

Hon. C. Gabelmann: If the association -- let's say it's the BCMA; neither the member nor I are picking on them; it's just an example he's used -- were to say to the recipients of their regular publications, "Don't vote for the NDP because they've been a terrible government, blah blah blah," that might be picked up by the media and reported on, but that's not caught. But if they were to take out advertisements on BCTV or in a newspaper -- and we're getting now into another section of the act as well, the third-party stuff -- saying don't vote for the NDP, and they actually purchased advertising to that effect, then that would be caught.

So the regular publications are not caught; and -- again, I'm going to talk off the top of my head here -- if the regular publication schedule didn't meet the election campaign schedule and they decided to move up their publication in order to catch it, that would be fine, too, as long as it was their regular publication.

[H. Giesbrecht in the chair.]

C. Serwa: Just to confirm it in my mind, they may say, "Don't vote for the NDP," and they may also decide to say: "Vote for political party X." As long as it's not a paid advertisement, it's still all right, without having to be audited or to be considered part of the election costs.

Hon. C. Gabelmann: Yes, they can do that in their regular publication.

G. Wilson: I've got a couple of questions on the balance of this section. One has to do with subsection (3) that reads: "Without limiting subsection (1), fees paid for conferences and conventions of a political party, including leadership conventions, and membership fees for a political party or a constituency association are political contributions." I wonder if the Attorney General might indicate to us, if there is a convention on policy, whether it matters if you go as a registered delegate to this convention. Surely one doesn't want to necessarily record registration fees or services to a political party if you're there as a registered delegate from an association, unless that association is covering those fees or unless that is provided for by way of a tax-receiptable donation. I can think of many political conventions that I have attended where an individual will travel and pay their costs of registration and these fees. Surely to goodness that's not a contribution to the party, because, in effect, you're offsetting the cost of attendance as a regular attendance fee. So I wonder what the purpose of that subsection is. I can understand where you might want to include a leadership convention. I can understand where that could be directly a part of attending a convention for the purposes of electing a leader. That's quite different from a standard policy convention where people are attending for the purposes of passing party resolutions, and so on. I think there is a distinction -- at least there is in every political party I've ever been involved with -- and I wonder if that has been considered.

Hon. C. Gabelmann: It's not an easy issue. In the first place, political party conventions are political events and are presumably designed for promotion of the party, even though it may be simply a development of policy. Beyond that, there's a potential loophole that we want to be sure we capture. If we didn't do this, a party could theoretically hold a policy workshop and charge $50,000 per registrant, it may not need to be disclosed, and that would be a way around it. Therefore we have to make sure that we capture all the loopholes, and that's what this is designed to do.

G. Wilson: Following up from that, if this act seeks to be that specific with respect to those contributions, the people who are sponsored into these conventions.... For example, if you've got Young New Democrats.... They may have a sponsorship base where if Young New Democrats are students at a university and they can't afford to go, there is a pool of money that is used from the party to sponsor delegates. That isn't a net increase to the party. All that does is provide an opportunity for people to attend. Is that going to be listed as each of those individuals having made a contribution? By way of sponsorship, you really haven't increased the net to the party.

Hon. C. Gabelmann: If I understand the member correctly, that would not be counted. It's where the money comes from that gets counted. A transfer of that kind would have been counted in the first instance and would not be counted in the second instance.

G. Wilson: That's good, because I think that would be consistent with policy.

When we get to the business of fundraising generally and reporting of fundraising accounts, I'd like to talk a bit more about this notion of external sponsors purchasing spaces for people at fundraising events and then having those individuals recorded as contributors. As the Attorney General may well know, there's a very active laundry service going on in the province where large corporate businesses buy up tables at fundraising events. They give out tickets to people who then attend these fundraising events, then they list each of the ten people who are sitting at the table as a contributor. That is not only dishonest, especially if tax receipts are issued, it's probably illegal.

Having said that, under subsection (6) -- and there is another section where we can get at that issue -- I notice the 

[ Page 16786 ]

transfer of money must be reported but not recorded. I have two questions regarding that. If there's transfer of money -- and I would assume this is other than a candidate trust account where money is directly received on behalf of a candidate and then activated by that candidate.... If it's a candidate trust account held by the central office, that candidate is going to have to declare that money, because that money was raised on their behalf.

I see there are some puzzled looks over there. Let me back up. If the central party establishes a candidate trust where money is raised specifically for a candidate for an election, and it is held in trust and then released at the period of writ, that contribution would have to be declared and would be part of an election expense, as I understand it. Moneys that are transferred between central party headquarters and a constituency would have to be recorded but are not necessarily part of an election expense. Is that correct?

Hon. C. Gabelmann: I'm not sure I'm going to get to the member's question, and he can come back at me. The transfer is recorded as a transfer from the party to the association, and both are recorded: from the party as an outgoing transfer, and to the constituency as an incoming transfer. If it is then expended in the campaign, it is counted as part of the expenditures of that campaign and must be within those limits, and it has already been disclosed as a transfer.

G. Wilson: I'm with the Attorney General on this so far. A candidate trust account is money that's expressly raised on behalf of the candidate. I guess each political party does it differently. From our perspective, people want to contribute to candidates, so we have an opportunity for people to contribute directly to a candidate trust. That candidate trust is established, but it can be released only by the terms of the trust. It can be released only at the time of the writ to be spent on the election. That has to be both recorded and a part of election expenses.

There are other moneys transferred, however, that are part of a general share that the central party headquarters gives to the constituency -- i.e., they may have an agreement whereby 30 percent of every dollar raised will go to administration for the central party and 70 percent will go to the constituency. That money may well be held by the central party, and on a quarterly basis it may be transferred to the riding association. That money would be reported but would be part of the ongoing expenditures of the riding and would not necessarily be recorded as an election expense. Is that correct?

Hon. C. Gabelmann: In the annual reporting of the constituency association, that money would need to be recorded as a transfer in from the trust account, and if it's expended, it would have to be reported as having been expended.

G. Wilson: Okay. But would it have to be reported as being expended as a part of the candidate's overall election account? A riding association has ongoing costs. For example, the riding association may well have an office. Let's use an office. The riding association has an office with a one-year lease. That's going to run whether the election is called or not. The election is called, and the office is therefore maintained. There is a transfer of money from headquarters to the riding association to pay the landlord every month. For the 28-day period through the writ, that office is still open. The office is presumably being used for riding matters. It might even be a part of the election process. Does the riding association have to report one year's worth of rent if that office is used as a campaign office for the candidate, or do they report only the 28 days? That's the question.

Hon. C. Gabelmann: The equivalent of one month's rent would have to be declared by the candidate for the campaign expenditures, not the full year.

G. Wilson: Okay. I'll take that answer under advisement, because there's a section coming up a little later on that might complicate the answer, in the sense that any moneys expended leading up to the election have to be declared. But we will talk about that when we get there. My understanding is that a bona fide riding association is only going to have to declare the proportional amount of money they spend during the 28-day writ period, and that anything that they spend outside that 28-day writ period on the matters of the election would not be considered a part of the candidate's campaign. Is that right?

Hon. C. Gabelmann: Let me try this. If there's a June election, the June rent has to be declared in the campaign accounting and the April rent does not, but the April rent has to be recorded as part of the constituency association's declaration of expenditures during the year.

G. Wilson: What about May? May is also outside the writ period, so is it only after the writ period has been declared?

Hon. C. Gabelmann: I wonder if the confusion comes from this. If it's a June election, again, and we've got an April expenditure, the April expenditure for the office for the month of April isn't an election expense, because there is no benefit to the election in having the office open in April, theoretically. There may be, and I know the member's point on this, but that expenditure isn't being spent within the writ period. But if in April, for this same June election, leaflets were printed, which were then stockpiled and distributed in June for the June election, then that is an election expense.

G. Wilson: Okay. Let me ask you this: if this office happens to be a very high-profile corner office in which there is a big poster with a photograph and big names and "When the next election comes, vote for Joe" in the front.... Clearly, in April that is campaigning for an election in June. Do they then have to declare the office?

[8:45]

Hon. C. Gabelmann: No, the rule here is that the expense or expenditure has to be used during the writ period. Those posters in April are not used in April for the election period. If they are still up during June, then they have to be declared in June for the election period.

C. Serwa: Again, still on subsection (5)(a)(ii), would the minister please explain that section to me? It's really as clear as mud, and I really don't understand it.

Hon. C. Gabelmann: May I wallow in the mud with the member? I agree that it's hard to follow. I think that what it is 

[ Page 16787 ]

basically designed to do is make sure that one candidate can't assist another by having a contribution that is designed for candidate A be given to candidate B, and then switch it. Has the mud settled?

C. Serwa: Okay, that's very illuminating. I wouldn't have gathered that from the statement there, but if that's what it's supposed to mean, and what it means, then I'm prepared to accept that. It seemed to me that we were perhaps looking at professional services from a lawyer or an accountant, for example, that would be donated into the campaign, and I didn't understand, if that were so, why it wouldn't be covered under subsection (5)(a)(i), with respect to "voluntarily performs the services."

Hon. C. Gabelmann: I hope I've got this right. It's clearly a campaign expenditure if a candidate pays for an organizer. Right?

Interjection.

Hon. C. Gabelmann: This section is designed to make sure that if the party or another organization pays for that organizer, it is also counted as an expenditure. So in the case of the Social Credit Party, if the central office hires an organizer, sends that person to Kelowna -- to Okanagan West -- and pays that person out of the central campaign funds, that contribution has to be counted as if it were a contribution made by the Okanagan West Social Credit Party constituency association. And expenses would report it as such.

C. Serwa: Following that, in subsection (5)(a)(iii), just underneath that, what is the definition of an employee? The reason I ask this particular question is that, obviously, employees are accommodated and not considered as a cost to the campaign -- I understand the purpose of that -- but it seems to me that there has to be some control. For example, if the union hires a large number of people to work in a member's political campaign, are they considered employees in the traditional sense even though they're newly hired and not normal employees of the organization?

Hon. C. Gabelmann: If a union -- or anybody else, for that matter -- hired somebody to work in a campaign, that must be declared.

L. Hanson: I guess I need some assistance from the minister. Let me paint a picture that suggests that the member for Powell River-Sunshine Coast would send a donation of $10,000, the member for West Vancouver-Garibaldi would send $10,000 and the member for Okanagan West would send a $10,000 contribution to the NDP party at the federal level, with instructions that it should be donated back to the provincial party in anticipation of an election campaign. How would that be revealed? Under what section would that be caught in this act? We may not have come to it. If we haven't and if the minister tells me which section, he can answer when we do get to that section.

Hon. C. Gabelmann: The first thing that would happen in that example is that we would say thank you. The second thing that would happen is that, under section 186(1)(e), we wouldn't be allowed to accept it. Section 186 is entitled "Restrictions on making political contributions." Then you go to sub-subsection 186(1)(e), which is on page 135. It says: "An individual or organization must not do any of the following...(e) make a political contribution indirectly by giving money, other property or services to an individual or organization...." So this is giving it to a third party to hide it, in effect. I would say: "Thank you. Here's your $10,000 back, each of you."

L. Hanson: I can assure the minister that his concern for sending a thankyou probably isn't a real concern, because it's not likely to happen.

In any case -- and I don't want to belabour it, because we'll talk about it under 186(1)(e) -- is the minister, then, suggesting that a contribution from a federal party to a provincial party is illegal?

Hon. C. Gabelmann: In order to answer, I will ask a question here. What would have happened if the federal party had had $1 million in the bank -- I don't know a federal party that does, but let's just assume that -- and it had no connection with the provincial campaign; then the provincial campaign was called and they made a transfer to the provincial party of some of that money or all of it? It would then have to be declared as a contribution from the federal party.

But let me just say that for all parties the practical reality is the opposite. For political parties in this country, the money flows the other way. I know that in our party, for example, all of the money comes at the local level; then we have to fork out too much to the provincial party and we have to fork out yet again too much to the federal party. It doesn't work the other way around.

L. Hanson: I appreciate what the minister is saying, but if the money were to flow that way, there would be no way of telling where that contribution came from -- other than as an organization, which would in itself be effectively an anonymous donation, because you wouldn't know where those contributions came from.

Hon. C. Gabelmann: Because the federal law requires disclosure, one would be able to backtrack to find out where the federal party got its donations, if in fact they were moneys that didn't come from the provincial party or the constituency association in the first place. So if a donation is made....

Let me just see if I'm in the same head space as the member. The member is worried that an individual might make a contribution to a federal party in advance of an election campaign provincially in order to ensure that that money could come back provincially and be hidden from the disclosure rules. I think the answer is that the federal election rules require disclosure of that federal money, so one could track that contribution. The member is shaking his head. I'll want to take some advice on that just to be absolutely sure that I'm right, but that's my understanding. If it's tax-receiptable, there's no question.

Interjection.

Hon. C. Gabelmann: The member is saying that if it's not tax-receiptable, there is another question. I want to come back and make sure I get this right before I'm definitive about it.

[ Page 16788 ]

So how do you prevent laundering of donations? That's the question, and I can assure members that this bill, as thick as it is.... We have tried to make sure we don't allow loopholes. This wouldn't be a loophole that I would be interested in allowing, and I want to make sure, and get some advice on this. I want to make sure we have caught that, because that's part of the principle of this bill.

L. Hanson: I think the minister has a pretty good feeling of where the question is coming from. I think there has been some talk over the years of the issue of the Lottery Fund. The Lottery Fund, as I understand it, now goes into that huge pot called general revenue, and then is allocated out from there in terms of the total general revenue fund. When a question is asked, quite often the answer is that a certain part of that already goes to health care; but in fact, it comes from the general revenue fund that everything goes into.

The question that I'm trying to make that example fit is that obviously a federal party raises funds annually -- continually, I would suspect -- and through that process you would never be able to identify any donation that came from the federal party to the provincial party as coming from a specific source, because it's put into that huge pot. The federal party would, of course, be required to receipt the donation for tax purposes but would not provide specific information about where that money came from in a contribution to a provincial party. So in fact the funds would be laundered.

Hon. C. Gabelmann: Section 205(2), on page 146, is designed to capture the issue that we're talking about here at this point. If the chief electoral officer requests it, "a contributor" -- and in this case that would be the federal party; let's say it's the federal NDP -- "must file with the chief electoral officer a solemn declaration that the contributor has not contravened this Part." And "this Part" is not this section; it's the whole part, which has to do with -- let's see what it's entitled -- election financing. So it covers the entire gamut of election financing rules. While we haven't been able -- and I don't think it would be possible -- to capture every Machiavellian scheme that could be designed to get around the limits, what we've done to capture this idea is say that a solemn declaration would need to be sworn by the contributor saying that that part of the act is not being contravened.

[9:00]

D. Symons: Just to carry on with that thought, let's suppose that a political party -- and for the sake of argument, let's suppose it's an NDP riding association -- has an integrated provincial, federal and municipal arrangement. They've made a pact, if you like, that donations will be divided and go to any of the three. It will be divided up on a formula: 20 percent of it will go municipally, 30 percent will go provincially and 50 percent federally, or some such arrangement. If the federal party donates some of that back to a provincial campaign, as the member for Okanagan-Vernon was suggesting, that money has been effectively laundered. Even after signing a solemn declaration, there's no way that the person donating it could indicate from whom that money came, unless you're going to insist that all the money that's given to a federal party is also then prorated in that way, and they're given tax donation receipts for each portion of that donation: 50 percent of it will be a federal receipt, 30 percent will be a provincial receipt and 20 percent will be a non-deductible one for a municipal receipt. It seems that this is setting up that sort of arrangement very nicely. I only know of one party that has that integration municipally, federally and provincially, and I will leave it up to the imagination of listeners out there as to which party that is.

Hon. C. Gabelmann: Assuming this theoretical notion that the member portrays, the 50 percent that has gone to the federal party would have come from the provincial constituency association, and amounts over $250 would have been declared. So the declaration occurs. If the money comes back, it's a transfer; but the declaration has already been made in the first instance.

D. Symons: I was not talking about the 30 percent that they might have allocated; it's the 50 percent that went to the federal party, some of which came back. That's a transfer. But who the donor was will not be identifiable, will it? How are you going to manage to do that?

Hon. C. Gabelmann: It will have been identified when it was given in the first place. Every party operates differently, and I guess we're all conditioned by how our own organizations operate. In our party the provincial constituency association is the active component, for the most part. There are some exceptions with federal riding associations, but they are exceptions. They get a donation from someone. If it's more than $250, they have to declare it. If the formula required -- it doesn't -- that of that $250, $125 had to go the federal party, it would. If the federal party decided to give the $125 back to the provincial constituency association for its expenditure, that money would already have been disclosed as being part of the $250 donation given to the constituency association in the first place.

D. Mitchell: The obvious solution is to outlaw any connections between federal and provincial parties in our province, and....

Interjection.

D. Mitchell: But we're all the same. I'm not sure what the hon. Attorney General means when he says....

Interjection.

D. Mitchell: That's right. The Attorney General is right. The NDP and the Liberals are really the same in this regard. There are federal and provincial parties that commingle funds, and it's not easy. The Attorney General has shown how it's really not easy. There are loopholes. I mean, this act will not be able to close every possible loophole. But when there are federal parties that have provincial counterparts, and when there are fundraising efforts that are geared toward both, the commingling of those funds is always going to be an issue.

I suppose the best we can hope for is full disclosure. But when the hon. Attorney General refers to section 205(2), where the chief electoral officer can on request require "a solemn declaration that the contributor has not contravened this Part" of the act, that's really only going to be triggered by a complaint. I can't imagine this section being triggered by anything other than a complaint. The chief electoral officer 

[ Page 16789 ]

isn't going to be able to go out there unilaterally and investigate every possible situation where there is either laundering or commingling of funds. When we get to that section, maybe we can discuss this at greater length.

While we're on section 180, I would like to ask the hon. Attorney General about another one of the loopholes that I think was identified a little earlier by the member for Powell River-Sunshine Coast. It is one of the weaknesses of this piece of legislation that it applies in so many crucial areas only to the writ period, so a lot of manoeuvring, manipulation, fundraising and transferring of funds and assets can take place prior to the writ period in anticipation of an election. I wonder if we're really capturing the spirit and the principle of disclosure and the limitations that are provided by this act.

When it comes to section 180(6), for instance, we are dealing with some matters that are not political contributions but must be reported under a following section of this act -- matters such as transfers of money or other property between either parties and constituency associations, constituency associations and parties or candidates, or candidates and parties or constituency associations. We've covered every possible angle, but I suppose we're only really talking here about transfers that take place during the writ period. Is that correct? Because if we're not, then we're making progress.

Hon. C. Gabelmann: This applies any time. Transfers are any time; contributions are any time. Limits are for the writ period, and that limit is if the money is being used or employed during that writ time; but the rest of it is year-round.

D. Mitchell: I appreciate that clarification. Let me ask a question with respect to subsection (6) of section 180, and let's use the example of the most recent by-election in the province, which took place in Abbotsford. We have seen that the Liberal Party, which won that by-election, spent $170,000. Now, under subsection (6)....

An Hon. Member: A hundred and seventy thousand dollars?

D. Mitchell: A hundred and seventy thousand dollars is what has been declared. We don't know what they actually spent, but they spent a lot of money. They spent so much money that when the candidate who was elected to become a member of this House protested that it was excessive, he was quickly cautioned by party officials for questioning it, according to a report in the Times Colonist. Well, I should say so. It's embarrassing.

I would like to know what would be reported, for instance, under this section of the act. According to media reports, the constituency association raised about $32,000, and I would imagine that it would have to be reported under this section. The head office, or the downtown Vancouver machine, raised another $136,000 and transferred that to the constituency in Abbotsford for this by-election. Now, those moneys were raised either within the writ period or outside the writ period. I'm not sure, but I think they were all spent during the writ period. What was spent in anticipation of the by-election, I suppose we'll never know. Could the Attorney General tell us if there were additional moneys over and above this $170,000 that were spent in the lead-up to the by-election? We all knew that a by-election was coming. We didn't know when it was going to be called, but it was anticipated for months. The government had up to six months to call that by-election, and it almost took the full six-month period to call it. So not only the Liberal Party but the other parties involved could easily have been spending money, raising money or transferring money or other properties under this section of the act during the lead-up to the writ period.

Under this section of the act, would those moneys have to be reported as well? Would anything that the Liberals spent prior to the $170,000 -- if that's what was spent during the writ period -- also have to be reported in accordance with division 6 of the act? I just wonder, using that as an example, how this section would work.

Hon. C. Gabelmann: In this case the moneys raised by the Liberal Party centrally -- the amounts that were over $250 -- would have to be disclosed, as would the moneys raised by the candidate or the campaign. All of that would be disclosed. The $136,000 -- to use the member's figure -- that was transferred from the provincial party to the constituency association for the campaign would have to be disclosed as a transfer. Then if that money was in fact expended in the campaign, as it appears it was, it would have to be shown as a campaign expenditure. So they would have been outside the limits by some $120,000, theoretically.

G. Wilson: The more answers we get, the more complicated it seems to become. I think we in this section of the opposition have finally figured out the government's strategy. They have made this so complex and unworkable that there will never be a bona fide election held again in the province of British Columbia, and then by default they will have to stay in government. It's a sort of mis-election; it's the O.J. defence strategy here applied to the.... We'll never be able to have another bona fide election, because we'll all break the rules.

But my understanding is.... Let me use a real example. We have, within the Alliance now, roughly 54 out of the 75 ridings with candidates identified. We're moving into a nomination process; we expect to have a full 75. Once those candidates are nominated, we will actively and almost immediately prepare their signs, because we have a central agency that is making them; there is a generic that they then add their name to. All of the money that we're spending is being spent out of a central campaign fund that is held centrally. Those signs are going to be sent out to each of the 75 ridings with the names of the candidates on them. My guess is that it will be done in advance of the writ, because we expect to have our candidates in place by the end of October in preparation for a potential election next spring.

That is the strategy, and I don't think it's a big secret for me to disclose that. Having said that, does that mean that any of the moneys expended on those signs, which will all be stuck in the ground and used in the next writ period...? Is each candidate going to have to declare the cost of those signs, even though the money is all spent by a central fund, it is then transferred free of charge to the riding associations, and the riding associations pick up and use those signs? Is that going to be part of their election expenses? And why is that not covered under subsection (6)?

Hon. C. Gabelmann: The used signs, not the unused ones. The provincial party, in producing the signs, has to 

[ Page 16790 ]

declare as part of their annual report that they expended $50,000 on producing these signs. They ship them out to the 75 ridings. At that point each riding has $666 worth of signs, if I've done the arithmetic correctly. If they use all of the signs in the campaign, they have to declare $666 as a campaign expenditure. If they only use two-thirds of the signs, they only have to declare two-thirds of that amount. I don't know whether that.... And where is it caught? It's caught by the definition of "incur" at the top of page 13 in section 1: "...'incur' means, (a) in relation to an election expense...using property or services in such a manner that the value of the property or services is an election expense...." So that's how it's caught.

Just to back up and try to make it simple, the principle is that moneys, goods or services expended or used in the election campaign are to be declared. If they're not expended or used, even though they may have been prepared prior to the writ -- in other words you might prepare 10,000 leaflets and only distribute 7,500 -- you then only have to declare as an expenditure 75 percent of that cost.

[9:15]

G. Wilson: Basically, we are saying that subsection (6) does not provide for the transfer of any property, real or otherwise, into a campaign that's been expended in advance of a writ, that does not have to be declared if it's used in the writ. So there is no way that advanced spending can be used in a writ period without that advanced spending being declared as a part of the limit that's set for the writ period, and that's what we're saying here.

R. Chisholm: I have just one more question. How would equipment, signs -- whatever it may be from previous elections -- be covered under this bill? Or is it covered at all? An awful lot of commodities are held from election to election. Would that have to be declared, too? Do we actually go that far back?

Hon. C. Gabelmann: A value will have to be attached to those old signs. Perhaps it would be a depreciated value, but that's an issue that the CEO and the advisory committee will have to deal with to develop a way of finding a fair evaluation of those. Most campaigns have leftover signs they end up using in the next election campaign, so a value has to be determined. The value may not be precisely what the cost was originally, because the value may not be as much. You might have used red and black in the last sign and the provincial colours this time are green and orange, so it doesn't have as much value to your campaign, etc. There are a thousand combinations of that. That's something the CEO and the advisory committee would have to grapple with.

D. Symons: I'm enjoying this bit on the valuation of signs, because during the last election campaign I made my own signs out of recycled cardboard, and pallets gave the stakes for them, and I wonder how you might evaluate these signs. They were very professional because I happen to know a little bit about silkscreening. So they lasted better than my competition in the NDP who had bought signs. Mine stayed up during the rainstorms; his blew apart. We also beat him in the process, at very low cost.

If you do that sort of thing.... It was my labour and the labour of two or three other volunteers making these signs in my carport and driveway, and we produced a few hundred of them. I'm wondering how you're going to evaluate something that basically had the value of the paint? The silkscreening materials were quite inexpensive, because I cut my own silkscreen. Therefore our expenses were very little. But if you went out to buy them, the value would be considerably more than I had paid. Since we did it that way, are you going to evaluate it at the expense to us, or do you evaluate it at the expense if you'd gone out and had it commercially done?

Hon. C. Gabelmann: The point the member is discussing is covered in section 180(5). It's not the value of any property or services provided by an individual who is or intends to become a candidate. Let me just leave the words alone. The member's time, effort and experience doing the silkscreening doesn't count, but the ink, the profilm, the squeegees and the framing that he has to purchase are all an expense.

D. Symons: I happen to have made most of those things, except the screen.

I'm wondering if we can just go back to subsection (5)(d) again and the bona fide publications. If you take something like the Royal Bank, which puts out a newsletter regularly, and if, one way or another, they favour a candidate with an editorial or an article, then I gather from what you were saying earlier that that would be satisfactory. It would fit under here, and it would not be a contribution. There's no requirement, such as free political air time, that they must give time to somebody else.

Suppose we take the union movement. A good number of unions also put out periodicals. Let's say that they have a run of 2,000 for their membership. They might have a particular preference for a candidate in their area, and besides the usual amount that they produce, that organization decides to make a run of 10,000 instead of 2,000 at the time of an election campaign. They have it loaded with articles by the various candidates in that area from one particular party. It's not paid advertising. It's simply donating the use of their magazine to assist candidates of a particular choice. Is that still a bona fide periodical, if it's something different from the normal run and the normal content of that magazine?

Hon. C. Gabelmann: The first 2,000 are a bona fide publication, because that's what they always do; the subsequent 8,000 are not. Let me use an experience closer to home. It would be like The Democrat, which is the NDP Party newspaper. I don't know how many are produced; it's 30,000 or 40,000 copies. If it were to produce and distribute two million copies in an election campaign, it would be a campaign expense for everything beyond the 30,000 that went to those on the regular mailing list.

J. Dalton: I just need clarification, and then I have a comment if I'm allowed.

It shows on the order paper that I moved subsection (7), which would be a new section. I actually did not move this when I presented my amendment to subsection (5) the other day, hon. Chair, so I'm wondering if I will be allowed to move subsection (7) now. Even if I'm not, I would like to comment on why it's there. There was some discussion earlier this evening about federal parties and cross-pollination and things of that nature. Perhaps I could ask for your ruling on whether I am now allowed to move subsection (7) as an amendment.

The Chair: Hon. member, the Chair would rule that it has been moved, but would offer some latitude if the member wishes to comment on it.

[ Page 16791 ]

J. Dalton: I guess the other clarification I need, hon. Chair, is this: if I'm allowed to comment on it, is it then on the floor? We would have to vote on it before we vote on the section itself. Is that not true?

The Chair: Just a brief comment, hon. member. The amendment to section 180 has been moved and that includes the subsection (7) that you referred to.

J. Dalton: That is correct, hon. Chair, but we divided on subsection (5).

The Chair: No, my information is that it has been moved and voted upon.

Interjection.

The Chair: No, it was defeated, hon. member.

J. Dalton: If I could make comment on this, the purpose of this amendment, whether it's actually in order or not, was to take care of some of the problems that members raised earlier -- and very valid concerns -- about what I would describe as cross-pollination between federal and provincial parties and even municipal movements. With all respect to some of the people who are saying that we're tied to the federal Liberals, that is not true. We are a separate entity; we are a separate political party, as all members in this House know. So I don't think that point has any relevance whatsoever.

The only point I want to have on the record, hon. Chair, is that we're presenting subsection (7) to tidy up something that we think is missing from this act. If you're going to make contributions or accept money, it should be strictly for a provincial election, which is what this bill is dealing with -- the B.C. Election Act; not the B.C. NDP municipal election act or the federal act....

The Chair: Order, please, hon. member. Please take your seat. I recognize the member for West Vancouver-Garibaldi on a point of order.

D. Mitchell: Point of order. I'm sorry to interrupt my friend the member for West Vancouver-Capilano, but just for clarification from the Chair, I wonder if the Chair could clarify what it is that we're debating right now. Is there an amendment on the floor? If there is an amendment on the floor, could the Chair read it to the other members of the committee so we could understand what it is that we're dealing with here? The member for West Vancouver-Capilano was referring to a new subsection (7). If we're dealing with that now, I think it would be useful for members of the committee to understand where we are procedurally.

The Chair: There is no amendment on the floor. The member for West Vancouver-Capilano was not sure whether or not the amendment was moved in its entirety, so the Chair offered him some latitude in terms of getting his comments on the record on the subsection (7) portion of the amendment. Once he has his comments on the record, then we are prepared to go back to section 180, which is what we are on. I'm offering some latitude to the member. Shall section 180 pass?

Interjection.

The Chair: The member for Okanagan West on section 180.

C. Serwa: You're not going to sneak this section through that quickly.

I guess this is a very interesting section. One of a couple of straightforward rules, I think, in legislation is: if it isn't broke, it shouldn't be fixed. The other one is the KISS principle. Neither seems to have been adhered to in this particular section. When I go through section 180, it is similar to the Election Act that we're looking at, but section 180 is an indication of the complexity that will be facing candidates, constituency associations and party organizations in the next provincial election. Really, it effectively eliminates small parties from contesting the next election, because they simply will not have the resources to access the staff that is going to be required to fill out the appropriate forms. If I may digress just a little on the disclosure forms that all members are required to fill out. In the first year there were perhaps no more than half a dozen sheets. The next year they grew to perhaps a dozen sheets, and they've doubled and trebled on an annual basis, so now when we have to fill out our disclosure forms, we get a large number of sheets. I imagine that the bureaucracy will see them grow.

I'm really concerned about what we're doing here. The Attorney General talked about accessibility as being really important. It seems to me that this particular process, and certainly section 180, eliminates the accessibility, certainly, of candidates to run in a forthcoming provincial election, and I'm very concerned about that. Does it answer the other points that the Attorney General talked about -- the fairness and accountability? Well, I wonder about that. I just wonder what we're trying to fix here, and it goes back to my earlier questions on section 180 and the imposed limits that require all this complexity.

Are we trying to fix a problem that doesn't exist? I really don't understand it. All I know is that I have become more and more concerned. When I look at some of the things that face candidates -- the disclosure forms and declarations, the challenges with respect to conflict of interest, and the enormous amount of red tape that this Election Act is going to impose on constituency associations and candidates -- I wonder if, in an honest attempt to improve the Election Act, we're not doing the whole process a grand disservice by going into this type of detailed bureaucracy.

Hon. C. Gabelmann: The member's comments are fair comment. They're actually more on the principle of the bill: should we or shouldn't we have disclosure and limits? There's no question that it's easier the old way. It's more complex this way, but the complexity is no more than exists now federally or in almost every other province, if that's any consolation. But it may not be. The member may not like the complexity that exists elsewhere, and that's a fair point. But I honestly believe that's an in-principle debate as opposed to a commentary on section 180 particularly.

Section 180 approved.

On section 181.

D. Mitchell: Section 181 deals with political contributions through loans and debts. I wonder if I could ask the Attorney 

[ Page 16792 ]

General for an example of what is contemplated by this section. For instance, I was formerly a member of the Liberal caucus when the member for Powell River-Sunshine Coast was the leader of that caucus. I recall very distinctly that the leader was financing the last provincial election campaign effectively through personal loans to the party. I also understand that there is a controversy about when those loans are going to be repaid, because he's no longer a member of the party.

If this section came into effect, would the Liberal Party, provincially, today be required to disclose those loans made to the party by the previous leader? Is that an example of what would be captured by section 181 dealing with political contributions through loans and debts? Of course, I would be interested in knowing if this section is going to be in place before the next election. When would this section come into effect?

[9:30]

Hon. C. Gabelmann: As I understand the situation, while the Liberal Party may have a moral obligation, they have no legal obligation as a result of this legislation. This is retroactive to June 1.

D. Mitchell: What kinds of loans and debts would be captured by section 181? Would it be loans for individuals, as well as corporate or organizational loans? We're talking about disclosure here in a broad way, I think, and I note that subsection (4) says that the rights of a creditor to pursue payment of any loans are not affected by this particular subsection. I think that's good.

I hesitate to get into this issue, but using it as an example, the Nanaimo Commonwealth Holding Society was involved in loans and transfers of assets, and some of those assets presumably may have been transferred to the governing party of our province. Would those kinds of things be captured by this section of the act?

Hon. C. Gabelmann: What's intended here is that someone -- whoever it is -- cannot evade disclosing their donation to a campaign by calling it a loan and then never expecting it to be paid back. That's what this is designed to accomplish.

Section 181 approved.

On section 182.

J. Dalton: I'm wondering whether, for example, the cost of a dinner would be caught by this section. Would the cost of renting a hall also be included as expenses? Of course, under subsection (2), we're dealing with payment of a charge by an organization and things of that nature. I think the comments made by the member for Okanagan West are certainly valid. We're getting so cumbersome here that even though this act is very well intended, I think we've tried to cover far too much and there are too many unanswered questions. This act is not going to accomplish its well-intended purpose, because of the very cumbersome detail. I must return to those questions. Can we have some comment about costs of dinners and halls and things like that? Are those caught by section 182?

Hon. C. Gabelmann: The first three sections -- 180, 181 and 182 -- of this division of part 10 deal with contributions, not with expenses. This section is providing some exceptions to the general rule, if I understand it correctly, in order to not interfere with traditional bake sales and ordinary kinds of fundraising events of that nature -- somebody's garage sale, you know, where an item is $5 and another item is $15. You don't want to create a bureaucracy around that kind of contribution. But at the same time, you want to make sure that it can't be used as a loophole by having $10,000-a-plate dinners or whatever.

D. Mitchell: On this section dealing with political contributions through fundraising functions, what if a political party held a massive fundraising dinner -- let's say in the city of Vancouver, for argument's sake -- and the charge for the dinner was more than the $50 limit stated in subsection (2)(b)? Let's say the limit was advertised as being $100, $150, $250 or what have you -- a very expensive fundraising dinner. This is an issue that came up under section 180; it was touched on briefly.

What if corporate donors to a party purchased tables at that dinner -- tables of ten -- for a few thousand dollars? The party may advertise this as a fundraising dinner for so much per ticket, but in fact individuals might not actually end up purchasing tickets. In fact, individuals may be lured to the dinner to sit at a corporate table paid for by one organization, whether that organization be a large business, a trade union or some large organization of some kind. How would that kind of political contribution through a fundraising function be handled?

We were talking earlier about money laundering. There is a concern that large fundraising dinners are effectively laundering money into political parties, legitimizing large corporate donations and making it seem as if individuals are contributing when in fact they are not. Would this section eliminate that possibility?

Hon. C. Gabelmann: Yes, it would, under subsection (2)(a): "...the payment of such a charge by an organization is a political contribution...." In other words, if a corporation bought a table with six plates, that would be a political contribution.

G. Wilson: The difficulty that we have here is the difficulty of knowing what's happened, because when these kinds of laundry affairs go on, what happens is that you'll get a list of contributors. You'll have a long list of people, broken down by tables -- sections of ten -- that have each contributed $175 a plate. That's what you get: this list of donors. As a result, when....

For example, in a recent leadership contest or by-election -- I can't quite recall which one it was -- there was a list of donors required. You looked at them, and there was a whole long list of people who were listed as donating $175 per plate, even though they had the ticket given to them. They didn't spend $175. In fact, I don't think they spent a dime -- well, they might have bought a beer; who knows?

What's interesting about that is that this section also limits, under the Income Tax Act, the proportional amount of the contribution to the amount above what could ordinarily be expected to be paid for the dinner.

So we've got two problems here. One is the reporting of the cost of the dinner. If you've got an organization that's prepared to make you a deal and you've got a supporting 

[ Page 16793 ]

contribution, you might find that the reported amount of the dinner would be very low, which would give you great sums of money. Or they would report higher, in order to make that a part of their own contribution, because there will be a tax receipt issued. Or you get a situation where an individual is given a credit for giving $175 to attend this dinner, which they never attend. There is absolutely no way of knowing whether that's accurate or not, because nowhere in this or any other act is there a requirement for an independent audit to verify that the individuals credited for that $175 actually spent it. That's a huge loophole; it's a massive laundry service. I think it's absolutely fraudulent. It should send a really clear signal to the people of British Columbia that political parties that use that method to raise money are likely to use similar kinds of practices with the public trust, which should cause them some concern.

Hon. C. Gabelmann: The kind of scenario described by the member would be a violation of the act, because.... Let's make sure we're talking about the same thing. If the member is saying that an individual might be credited with having contributed when in fact that individual has not -- the ticket was purchased by a corporation or whatever -- that would be a violation. Under this legislation you cannot.... What's the wording I want? I'll find the exact wording, so that we're really clear. On page 135, section 186(1)(d), you must not "make a political contribution with the money, other property or services of another." Therefore the scenario is in violation of the legislation.

The member asks: "What happens if they do it anyway?" Well, they're in violation of the act. They're cheating; they're scoundrels and it should be exposed. How does it get exposed? Someone can make a complaint. The CEO can require that the financial agent swear a solemn declaration that it didn't happen as was alleged. If someone swears a solemn declaration, and it's proven that the declaration was invalid, then the penalty section.... It's the most severe penalty section in the bill.

[M. Farnworth in the chair.]

G. Wilson: We'll talk a little bit more about this under section 186(1)(d). I hadn't read the act the way the minister has. It struck me that it meant that you couldn't take somebody else's money and contribute it on their behalf. That is what I think that says.

What I'm dealing with here.... First of all, there is absolutely no way for anybody to know, because the list of donors is the list of the people sitting at the table. The fact that somebody else bought ten tickets and has given these ten tickets to ten people, who now get themselves on a list for $175.... The worst case, as the Attorney General well knows, was when we had a situation where partners in a law firm asked to make a political contribution on behalf of their employees -- the lawyers -- who would then be given a tax receipt for that contribution. In fact, they had effectively never made the contribution, because it had been made by their partners. I believe that to be a fraudulent and terrible practice. If you've got a list of people that have given $175, and it's right next to their name, there's no way you know whether that list is accurate unless you go and actually physically communicate with each of those people.

Let me also point this out: in the event that those people are listed with a $175 contribution, it may well be that their bonus for keeping their mouth shut is a nice tax credit for $175 -- thank you very much -- which they get a receipt for. There's a maximum contribution by any one corporation; therefore they get a tax credit for money they never even donated. That is absolutely fraudulent. I believe it to be a contravention of the Income Tax Act. I raised it in the estimates of the Minister of Finance. It seems to me that we ought to be auditing these accounts, because I believe that practice is going on in British Columbia.

Hon. C. Gabelmann: The CEO can order an audit if any of these allegations are made. Previous experience is that somebody's going to talk, and people will find out that these fraudulent activities are being undertaken.

D. Symons: I just have a question on that item raised by the member for Powell River-Sunshine Coast. Indeed, the minister said that the CEO could demand an audit. I'm just curious. You could bring any political party to their knees simply by having some person from another party claim that there was some cheating going on in everything and demand an audit. If that was the case, you would just tie up the whole process and cost an unsightly amount of money. I'm wondering if the minister might say who pays for the audit if an audit is required, when there is a possibility of these shenanigans going on with money being given and credited to a different person.

Hon. C. Gabelmann: A good way to approach life is to assume that everybody's going to be honest and that you're going to get good compliance and appropriate response. You're going to have occasional attempts at cheating, and you're going to have to have a response. It applies equally across the board. The CEO is going to use discretion, and I think that if anybody wants to put their mind to how they can cheat, connive, act as scoundrels and get around any provision in this bill -- or any other bill, for that matter -- they will be able to do it. We could spend from here till kingdom come contriving examples of how to violate the intent. The fact is that there are checks and balances. The fact is that it's balanced, and it applies to everybody equally.

[9:45]

D. Mitchell: I have one small technical question. On subsection (3) of section 182, I must apologize to the Attorney General. I'm not sure I understand this section. If he could explain it, I'd appreciate it.

Hon. C. Gabelmann: The member is selling an old couch of his at a garage sale. It has a value of $50, and he gets $10,000 for it. We assume there's a political contribution there.

Section 182 approved.

On section 183.

J. Dalton: I have just a point about this section. We've got an interesting provision in this and other sections dealing with nominees who have not yet been nominated to run for a political party, or with an independent -- although I guess you can't have more than one nominee for an independent movement. Could the Attorney General explain this for us? We've already alerted the ridings as best we can that they had 

[ Page 16794 ]

better be well aware of the implications built into this part of the act. The way I understand it is that anyone who is seeking nomination and then becomes the successful candidate.... That person is not only a candidate for all purposes of the act but also has to take care of all the expenses and things that the person has incurred leading up to his or her successful nomination. Is that the correct interpretation of this?

Hon. C. Gabelmann: Only if it's during the writ period, so as not to use the nomination campaign during the writ period as a way to hide campaign expenses.

J. Dalton: Do I understand the Attorney General correctly: those people who we and other parties are now in the process of nominating -- I see that the Reform Party has three candidates in the Penticton riding, I believe -- are not caught by the accounting and disclosure provisions? I'm thinking in particular of the successful nominee out of a riding contest -- not the others, but the person who successfully contests a nomination. We should also draw attention to the definition of "nomination contestant" in the "Interpretation" section. That person is caught by parts 10 and 11, which, of course, we're into now. That's the concern I have.

Hon. C. Gabelmann: This is disclosure of contributions but not of expenses, except in the writ period.

D. Mitchell: Under section 183(4), we say: "The following...are personal election expenses of the candidate ...(d) "the cost of renting a temporary residence if it is necessary for the election...." I imagine that what is being contemplated here is that where a candidate is not a permanent resident in a constituency, the cost of renting a temporary residence might be required, and it may therefore be a necessary election expense. I wonder if the hon. Attorney General can tell us whether it was ever contemplated in the drafting of this legislation that to be a candidate in a constituency, one required a full-time residence in that constituency.

Hon. C. Gabelmann: No, and nobody else does, either.

Sections 183 to 185 inclusive approved.

On section 186.

G. Wilson: I just want to flag section 186(1)(d). Notwithstanding that the Attorney General says that we're all sort of subject to the same rules, to let honour apply and all the rest of that, when a political party raises $4 million, $5 million or $6 million, the raising of those dollars, as has been demonstrated, can be done through a whole variety of sources. I don't know of any provision in this act -- and I've tried to read it as carefully as I can -- that will require that political parties be audited through an independent audit service that would allow us an opportunity to check where in fact their money is coming from and whether or not their reporting is indeed accurate. We're effectively relying on political parties to be honest in their recording or reporting. Clearly, it strikes me that there is no provision within the income tax provisions, either federal or provincial, in terms of tax credits; neither is there a provision with respect to restrictions on making political contributions that would require a formal or proper audit of the manner in which these contributions are either received or given. If the Attorney General could point me to that section, that would be useful.

Hon. C. Gabelmann: Two comments. One is that each financial statement has to be audited, but that's not, obviously, a forensic audit. So then you go to section 260: "(1) The chief electoral officer (a) must conduct periodic investigations of the financial affairs...(b) may conduct audits of the accounts of individuals and organizations..." -- and, of course, investigations into potential contraventions.

G. Wilson: I appreciate that response. In light of the fact that we're going to have this new committee struck, let me just go on record tonight as saying that it be advanced to this new committee that one of the very first things that ought to be looked at, I think, are these $175-a-plate laundry facilities, because to me they clearly violate a number of acts....

Interjection.

G. Wilson: Well, there is a series of ways in which these funds have been raised that I think we ought to be looking at a little more carefully.

D. Mitchell: Just a quick couple of questions on section 186. Under subsection (1)(c), I note that an individual must not make a contribution over $100 with anything other than a cheque, money order or credit card. Cash contributions over $100 are forbidden under this act. Maybe the Attorney General can tell us why. Obviously there are concerns about money being unaccounted for, in passing, but is $100 the right limit? Why is that limit in there?

Hon. C. Gabelmann: This section was in anticipation of the question from the member for Powell River-Sunshine Coast. It provides an audit trail.

D. Mitchell: Subsection (1)(f) of this section says that anonymous political contributions cannot be made. There are two exceptions, I suppose, and one of them is if they have a value of less than $50 or a higher amount established by regulation. This section references section 188, which says that a registered political party or constituency association must not accept more than $10,000 in anonymous political contributions in any calendar year. Knowing how the maximum always becomes the minimum, what are we really saying here -- that every political party and every constituency association within some parties are going to have $10,000 in anonymous donations, perhaps? I'm worried that the maximum becomes the minimum for some political parties when it comes to potential abuses. Why does there need to be a provision for anonymous contributions, generally speaking?

Hon. C. Gabelmann: Again, on one side of it there is an audit trail, and on the other side of it you have to think about passing a hat at a meeting. Somebody will have a meeting, and a hat will go around to raise money to pay for the cost of the hall. It's a standard kind of thing where everybody puts a couple of bucks in, but we've got to make sure that people don't put $10,000 in and then later on say: "Ha-ha, I gave you an anonymous contribution."

Sections 186 and 187 approved.

On section 188.

G. Wilson: I just have a very quick question on this with respect to the contributions being recorded. That's a $250 minimum, right? So that you....

[ Page 16795 ]

Interjection.

G. Wilson: Section 188. It says that in one calendar year you can't give more than $10,000 to a constituency association, in terms of limits of anonymous contributions. But in terms of declaring contributions, we have already got an established minimum, right? The act provides for contributions up to a minimum amount that can be given without being recorded, so you're recording everything over a minimum. We're talking about those contributions that are larger than $250. There's a minimum of those contributions above that, because you could have well over $10,000 at $20 a month.

Hon. C. Gabelmann: If I say to the member that every donation, even $5, has to be recorded, but any amount over $250 has to be declared, so....

G. Wilson: But I'm suggesting that if you can have a recorded.... What I'm getting at is PACs, pre-authorized cheques. So if you're moving to a pre-authorized cheque system, the party will have recorded each of those people who are contributing.

There may be some people who do not wish to have their names published. Therefore, even though there is record of it, because you have to have their cheque to get it, they'll give you the pre-authorized cheque under a number. You'll just get it under a series of numbers.

We don't have to report that if it's under $250. But if you've got, let's say, a thousand people in your constituency association giving you $20 a month, that's a substantial chunk of change which you don't have to report at all. Correct?

Hon. C. Gabelmann: Anonymous contributions cannot be made by way of a pre-authorized cheque deduction. They have to be made at a meeting or by way of a general solicitation. And they have to be under $50 annually.

J. Dalton: Just a question.... I don't know if this is going to fit in here. But at a lot of events I go to these days -- and they aren't political events; they're rugby events and other things -- a 50-50 draw is a very common way to raise some money. Would somebody going around selling 50-50 tickets at a political event have to record every $5 donation, contribution or whatever? If that is so, number one, it won't work; it's impossible. Secondly, I don't think that's the intent of this section -- at least, I hope it isn't.

Hon. C. Gabelmann: Those contributions do not need to be declared.

Sections 188 and 189 approved.

On section 190.

J. Dalton: I move the amendment to subsection (2) that stands in my name on the order paper, in which we would delete and make a substitution. The basics of the substitution are that we delete from subsection (2) the unincorporated organizations, non-profit organizations and other contributors -- whoever or whatever those may be.

[SECTION 190, by deleting subsection (2) and substituting the following:

(2) Contributions to political parties, constituency associations and candidates registered under this Act may only be made by individuals, corporations and trade unions.]

Now, I've heard the Attorney several times get to his feet and applaud my private member's bill of two years ago. I draw the committee's attention to section 12 of my bill. Section 12 refers to contributions made only by persons individually, corporations and trade unions, so my bill restricted it to those three items.

I'm hoping the Attorney General will see the wisdom in my argument -- which, of course, is very wise -- and realize that he was defending my bill earlier tonight and did so last Thursday. I'm inviting the Attorney to be consistent on that and accept my amendment, which is not gutting his bill. It's simply saying we have something in our bill that we like, he likes our bill, and he must like my amendment.

On the amendment.

Hon. C. Gabelmann: A non-profit society could be incorporated and therefore would be able to make donations under the Liberal amendment.

G. Wilson: I'm not sure I understand why, with this amendment, you would get rid of "unincorporated organizations engaged in business or commercial activity." I don't understand why you would want to do this. I think I understand the amendment clearly enough; I just don't understand why we'd want to do this. Just because you're an unincorporated organization or you're engaged in various activities, or you're a non-profit organization.... In fact, I would say that non-profits definitely should be reporting for a whole series of other reasons -- tax reasons included -- particularly if they're non-profits that have their own tax status and are then donating to political parties. I think that there's a number of issues around that.

I just don't.... It's difficult with another party's amendment. The way that it reads right now, I don't think I could support it. It doesn't make any sense to me to have it in there.

[10:00]

Amendment negatived.

D. Mitchell: Section 190 deals with the financial agent: "Financial agent must record each political contribution." I just want to see if I'm understanding the role of financial agents under this bill correctly. My understanding is that the bill requires financial agents for four different functions: for political parties, for constituency associations, for candidates during elections and for contestants in leadership races. Those would be the four categories of financial agents. My understanding as well -- and if I could address it under this section, maybe it would be just as convenient as any other section -- is that the limit on contributions is $250. Anything $250 and over has to be disclosed under this act.

Could the Attorney General tell the committee if it's conceivable that in one fiscal year an individual could make a contribution for, say, $249 to four different financial agents -- one to a political party, one to a constituency association, one to a candidate and, if it happened to be a year when there was a leadership race, one to a contestant as well? They could end up contributing almost $1,000 -- $996 -- to a political party without any disclosure whatsoever under this act. Is that correct?

Hon. C. Gabelmann: It would be if I don't move the amendment standing in my name on the order paper as soon as we complete this section.

[ Page 16796 ]

Section 190 approved.

Hon. C. Gabelmann: I move the amendment adding section 190.1, standing in my name on the order paper, which is designed to meet the problem so aptly described by the member for West Vancouver-Garibaldi.

[SECTION 190.1, by adding the following section:

Candidate and constituency association records must be provided to political party

190.1 For the purposes of reporting by a registered political party as required by section 206 (3.1), a copy of all information required to be recorded under section 190 (1) for a candidate or registered constituency association of the political party must be provided to the financial agent of the political party as follows:

(a) in the case of a candidate representing the political party, the financial agent of the candidate must provide the information within 60 days after general voting day for an election;

(b) in the case of a constituency association for the political party, the financial agent of the constituency association must provide the information for each year by February 15 of the following year.]

Section 190.1 approved.

On section 191.

D. Mitchell: For confirmation, am I correct in interpreting that under section 191, "Income tax receipts for political contributions," even independent candidates during election campaigns would be allowed to issue tax receipts through their independent constituency association? I think that would be a first.

Hon. C. Gabelmann: Yes.

Sections 191 and 192 approved.

On section 193.

J. Dalton: This is an interesting section, because it's dealing with issues of public policy. Firstly, I would like to know what sort of examples we are getting into with regard to public policy. As the Attorney General knows, there will be some controversy later on about third-party advertising. There are specific restrictions on the expenditures that one can undertake on behalf of a third-party cause. Are we doing something here that's going to get around that third-party problem? Are we inviting other issues that aren't contemplated by those other provisions?

Hon. C. Gabelmann: This provision is copied from Saskatchewan and perhaps others. Let me just give you an example. It's designed to prevent someone setting up, let's say, a phone bank for a campaign, independent of the campaign, without having it valued.

J. Dalton: Let me try this example. This was suggested to me by somebody during the 1988 federal campaign on the free trade issue, which sort of became the touchstone of the Mulroney re-election endeavour, which, unfortunately, was successful. I think we can all recall that free trade was really the issue in that campaign, and a tremendous amount of money was thrown at it. I recall ads in magazines, billboards, radio and television paid for by Peter Loughheed and people of that nature to promote the issue. First, would that qualify as a public policy matter under our act as something worthy of dealing with under section 193?

Hon. C. Gabelmann: That campaign can be conducted if the expense is incurred for the purpose of gaining support for views held by the individual on an issue of public policy. Those individuals who wish to genuinely gain support for their perspective on that issue can do so.

J. Dalton: We must not omit going into the second part of that and making sure that it is not for anyone other than a political party or organization.

Coming back to the free trade example, the supporters of free trade.... If I recall, all the advertising supported it; at least the big money did. All of that advertising was geared at the issue, but we all know that there was only one federal party promoting the cause, and that was the Tories -- the almost defunct Tories. Would that be a contravention of section 193? Even though they're not doing it directly, would it not be arguable that that's actually a political cause and not a public policy issue, given that only one party was identified with the issue?

Hon. C. Gabelmann: One would get into grey areas in respect of this, but if you go to subsection 2(b), "the expense must be incurred in good faith and not for any purpose related to the provisions of this Act...." In other words, it's good faith; it's because you're promoting the views you honestly hold about free trade, and it's not designed to subvert the election limits provisions that are in the act. Perhaps the '88 federal free trade issue is the classic question in respect of this, and I think some of that campaign would be covered by this; a lot of it would not. That's just my guess. In the final analysis, the courts will decide.

J. Dalton: Just one other point. Given that we're trying to establish some guidelines, whether they be good, bad or indifferent, for all candidates of all political stripes -- independents, Alliance, Socred; even a Tory or two might surface in this next provincial election, you never know.... Maybe Peter Macdonald will become a candidate.

Interjection.

J. Dalton: That's quite true, hon. member. I just want to be clear, and when we get to section 234 -- that very controversial aspect about putting a ceiling on third parties -- we will come to this. Are we not going to get into a conflict? I think the Attorney has already alluded to the fact that we may end up in court. I don't think we want to pass legislation that invites lawsuits; we want to pass good laws that will ideally prevent lawsuits. But are we not going to potentially get into a classic conflict between one side arguing that this is a public policy issue and we should not be fettered in any way, other than the other provisions of the act, on what we can spend and what causes we advance? The counterargument will be: "Well, I'm sorry, but you're a third-party interest and you can only spend $5,000." Is that not true, and is that not really where we're going to end up if we pass this into law?

Hon. C. Gabelmann: The simple rule is that you can advertise in good faith about a public policy issue that you 

[ Page 16797 ]

care about. You cannot use that expenditure to assist or defeat a political party by expending it in an attempt to get around the campaign limits.

J. Dalton: I'll just make one other point, because my colleague has very aptly reminded me that there are other very important provincial issues that we know will be on the agenda in the next election: pro-life; the gun lobby. There is no question. I'm sure the Attorney General will agree with me on this: there will be a gun lobby. Even though it's a federal law, we know as a fact that it's going.... Is that a public policy issue, and therefore there will basically be an unfettered approach taken to it? Or is the Attorney General perhaps going to say: "Well, wait a minute, that's a third-party advertising scheme"? Will those people -- and there is a very well organized and vocal coalition of gun owners -- be restricted to $5,000 in their expenditures?

Hon. C. Gabelmann: The member is wondering what the Attorney will say; the Attorney will say nothing. It will be the CEO, guided and helped by his advisers, who will have something to say about this issue, and it will depend on the specifics of the case.

G. Wilson: Section 193 is a very important section, for the reasons that the member for West Vancouver-Capilano has raised. He talks about a federal campaign that we all remember, where there was an enormous amount of third-party advertising and expenditures. This was masterminded by a group of people who are now defunct Tories, and we have reason to be concerned. We have real reason to be concerned, because where are these defunct Tories today? Well, there is Mr. Lyle, who is the former campaign manager for Premier Gary Filmon and who is now in the Liberal camp. And then there's Stewart Braddick, a former Tory organizer who is the party's director of operations. There is John Aisenstat, who was the former organizer for Kim Campbell. Then, of course, let's not forget Kelly Rickart, who is the former assistant to Socred Bud Smith; Jim Arthur, a former Tory organizer; and Sharon White, again somebody who is a revived federal Tory organizer. These people, who the member for West Vancouver-Capilano quite correctly said were defunct Tories, clearly are now in the back rooms of the Liberal Party of the province of British Columbia, and they are the ones who masterminded that.

Interjection.

G. Wilson: I see that the Chair is asking how this relates to the amendment. Well, that's a good question. Since the Chair has asked, I will tell you how it relates. It relates because we have in the past experienced very skilful, very clever political masterminds who will find their way to getting third-party involvement, which essentially provides an opportunity for political parties to springboard off expenses that are run concurrently or parallel to campaigns. That is something that was well advocated by....

I shudder to go back to read them all, because they were involved in the dirty tricks campaign. The dirty tricks campaign, you'll remember, was with the former Social Credit Party, and where are those dirty tricksters? Well, my goodness me, if they're not all in the back rooms of the Liberal Party of British Columbia.

However, for those reasons.... And I won't read them all into the record now, because there's a much more appropriate section later on. But let me say that for those reasons alone we should all be concerned that we have a fair and equitable process. Therefore I would suggest that this section really is an important section, and for that reason we should look at it considerably seriously.

L. Fox: I don't want to belabour the point, but there is some possibility that we could see a federal campaign with respect to gun legislation that may indeed be headquartered in Alberta during a provincial campaign. As we know, there is no arbitrary wall at the Alberta-B.C. border, and the radio waves go beyond it. Where there may be a conflict or an interest from a federal campaign which is waged or directed from a neighbouring province, would this legislation have the opportunity to capture that kind of initiative?

Hon. C. Gabelmann: The member raises a pretty theoretical kind of example, and it would be foolhardy to say how it would be judged. I think you have to go back to the basic premise -- that is, as long as the moneys expended are not designed to subvert the limits that are imposed by the legislation, they are not designed to be a way around them, and they are being expended as part of a legitimate activity which is not intended for that subversion purpose.... That's the sort of rule of thumb. As I said earlier, there are going to be some grey areas that are going to require assessment and perhaps decision. The CEO will be involved in that, and presumably, following that decision, there's still a remedy to the courts.

D. Mitchell: Section 193 seems to me to strike at the issue of advertising, which we deal with in another section of the bill under third-party limits. Just so I understand this, could the Attorney General tell us if a non-partisan group in an election campaign, the Canadian Taxpayers' Federation, for instance...?

Interjection.

D. Mitchell: I think they are non-partisan. I don't think they're associated with any individual parties. They may be critical of the government to some extent. I don't think they're Liberals -- I'm not sure, but I don't think so. Well, let's use them as an example. I'm sure they're not, in fact, associated with any particular political party.

[10:15]

Let's say they wanted to advocate in favour of balanced-budget legislation during the next election campaign. I understand they've done some work in that area. Would that be the kind of public policy contemplated under this section? Would that meet the requirement for issue advertising that would be allowed? Could expenses be incurred for that purpose under this act without any restrictions? They wouldn't be advocating on behalf of any political party. Perhaps all parties might be advocating different forms of balanced-budget legislation, but the Canadian Taxpayers' Federation or the B.C. Taxpayers' Association might have its own views. Could they advocate on that without any restriction?

[ Page 16798 ]

Hon. C. Gabelmann: Again, without knowing the specifics and the dynamics and the events of the time when this is occurring, and without making a decision in advance for anybody, that campaign, which is part of something they have advocated for some time, would be part of a public policy discussion under this section and would not be restricted.

Sections 193 to 197 inclusive approved.

On section 198.

D. Mitchell: Section 198 deals with election expense limits for candidates. Under subsection (3), there's a requirement that if an electoral district has an average of fewer than two registered voters for each square kilometre, the limit on election expenses under this section is increased. Could the Attorney General tell the committee how many provincial constituencies would qualify under that formula today? Are there very many ridings that actually have an average of less than two registered voters for each square kilometre?

Hon. C. Gabelmann: When the calculation was last done, which was last year, it was 18 out of the 75.

Sections 198 to 202 inclusive approved.

On section 203.

D. Mitchell: Section 203 deals with limits and adjustments to spending, to reflect changes in the consumer price index. Subsection (1)(b) refers to "election expenses incurred by a candidate" over $50,000, which is the limit prescribed in this act. I wonder if the Attorney General can tell the committee: in the last provincial election campaign in 1991, how many of the 75 candidates who became MLAs actually spent in excess of that $50,000 limit?

Hon. C. Gabelmann: The first thing the member needs to know is that under the old rules, the ones that applied in the Abbotsford by-election and before.... It is not a question of expenses incurred; it's a question of expenses spent. The count is being done as I talk, in answer to the question. Whatever that number is, one needs to recognize that under the rules of this bill, the number would no doubt be higher, because all of us in the past have only reported what we spent, not what we incurred.

As I do this, I'm trying to.... Quite a number, at least 13 constituency associations, were over $50,000. That's on page 1; that's only Abbotsford through Parksville. Let me very quickly, just at random, give a couple just for edification: North Island -- Social Credit, $30,000, and NDP, $40,000. So we're both under. But I suspect that my $40,000, under this bill, would have been more like $50,000, frankly. Incurred is larger than spent. It was $72,000 for Social Credit in Kamloops and $60,000 for the NDP in Burnaby-Willingdon. So there were a fair number. I'm just looking for a really high one; here's a really high one. I don't even know who it is. I'm just going to read it. It's $126,919, and it's Social Credit in Surrey-Newton. They spent two-thirds of what Abbotsford spent the other day. The answer is that it's 28 in total.

Section 203 approved.

On section 204.

G. Wilson: My question deals with ownership of surplus. Section 204 talks about the transfer of a candidate's surplus election funds, then it deals with the issue of a constituency association being the recipient of surplus.

I wonder if there was any discussion in the drafting of this legislation with respect to the provisions of surplus funds that a candidate on their own merit or through their own goodwill may have developed. I ask this question because it's not uncommon -- at least, it has not appeared to be uncommon -- that candidates will run for a particular political party and some political parties go out and try to recruit candidates who obviously can raise money. They try to get somebody who's going to bring in cash. The individual has all kinds of markers out there, which they call in for donation. They do all the reporting, and everything is done according to this regulation.

But at the end of the election writ period there is a surplus sitting in account. This says that the individual candidate has no claim to those funds. Yet that individual candidate may have personally been responsible for the raising of funds. It may not be a conflict if the candidate remains in the political party. But if that candidate does not, or for whatever reason they've said: "Well, that's it. I've done my shtick. I came here, ran for you guys and couldn't run a half-decent campaign. I'm out of here. I've got personal expenses that have to be considered. I want to have those surplus funds...."

The second thing that happens is that guarantees are put up. Individuals who run for office will have a pool of dollars set aside, in the event that they're not elected. That will give them cash dollars back to offset lost income they may have had, through giving up whatever employment they had -- especially if they're in private business -- during the 28-day writ period. Now, that can't be seen as an election expense, because you can't pay a candidate to run. But if you're prohibiting the candidate from receiving surplus moneys, you're locking that up and saying no, that can't happen.

I just wonder about that, because I know of at least two instances. The first case occurred where the person wanted to walk away and wanted the surplus dollars back because he had individually raised them. In the second case, where a candidate had been promised income, she demanded that this money be paid, because that was money promised to her to offset her lost income because she was unable to sell real estate at the time.

Hon. C. Gabelmann: Let me see if this answers the question. If a candidate volunteered their time during the campaign, and everything went perfectly, except they didn't -- well, whatever happened.... At the end of the campaign, the candidate had volunteered their time, and there was $5,000 left over, which had been declared. The moneys had been reported as having been received, and all that was done, but there's a surplus. All the bills are paid. So the campaign committee says, "We have $5,000 left over; we are now going to make a decision that we are going to pay the candidate a salary for the campaign," and they pay the candidate. We're doing this quickly; there needs to be a fair amount of cross-referencing here. I think that would be acceptable. There's nothing wrong with having the candidate receive a salary in the campaign.

[ Page 16799 ]

No, I'm getting conflicting advice here. This is not a question that has occurred before, and I haven't dealt with it directly. I'm going to have a section of the bill pointed out to me which I can then point out to members.

I'm not going to be as categorical as I was being, but my own view is that in section 204(1) a reasonable expense incidental to the candidacy is provision of a living wage. I think you could argue that that's a reasonable expense. If that reasonable expense wasn't provided during the campaign and moneys were left over, it could then be included as a reasonable expense. It would have to be declared as such, but I would think that it could -- as long as it was reasonable and the CEO agreed.

L. Fox: I am hesitant to allow this section to go with that kind of interpretation. I have a real concern around the idea that these donations have received income-tax-deductible receipts. They are now going to be paid out by way of wages back to an unsuccessful candidate, or maybe even a successful candidate. I don't think you could distinguish the difference of that principle between a successful candidate or an unsuccessful candidate. Before the Attorney General leaves that kind of interpretation there, I would suggest that perhaps he might want to stand down this section or at least hold comment in reserve, pending discussions with legal counsel and referring to the Income Tax Act. I think there are a lot of ramifications to that statement.

Hon. C. Gabelmann: The first thing I want to say is that the act is not going to be interpreted by what I say in this debate; it's going to be interpreted by the chief electoral officer. If it has to go....

Interjection.

Hon. C. Gabelmann: I never waste my time answering questions from hon. members.

Let's go back to this section to deal with the point raised by the member for Prince George-Omineca. This section is designed to ensure that moneys that are left over are transferred back, in fact, to the registered constituency association or the registered political party, and are not left in a campaign fund. It becomes defunct. That's what this section is about. The member for Powell River-Sunshine Coast was asking a more theoretical question that was more tangential to this section.

[10:30]

D. Mitchell: The hon. Attorney General said that his comments of clarification and information for members are not going to have any import if it ever comes to a judicial review of this act. I would hope that they might, and that a minister responsible for any legislation that comes before this assembly, and who answers questions from members of this House seeking clarification or interpretation, might have some weight should the courts ever review this matter. Of course, this is a massive new Election Act. There is some ambiguity in it; it's not airtight. The hon. Attorney General has told us that there may be loopholes, so his comments, I think, are quite germane, and that's one of the reasons why we as members of this committee actually seek information from the minister.

In section 204, can the hon. Attorney General tell us whether or not these transfers of a candidate's surplus election funds would relate to contestants in leadership races within political parties as well?

Hon. C. Gabelmann: I'm sorry to disappoint the member, but no, not in this section.

G. Wilson: My last comment on that is about a real situation where a particular candidate had a surplus and that surplus was transferred into a riding association's account. That riding association then had a demand made against it, basically, based on a written agreement that said that the candidate, if there was surplus in the account, would be paid for time lost from their employment. That was part of a condition for that candidate to run. That was between the riding association and the candidate of a political party that I'm not a member of nor have I ever been a member of. However, saying that, what happened in that particular case is that the riding association was restricted from paying out that money because it was receipted moneys for a political donation to the party, even though the individual raised the money. The contention was that if there was surplus, the candidate owned the surplus account because that candidate had raised the money. That's the only reason I ask that question.

[N. Lortie in the chair.]

Now I hear the Attorney General saying that notwithstanding how it is tax-receipted, if that's part of the election expenses, then such an agreement could be valid as long as the amount paid to the candidate was part of the cumulative amount that was allowed to be spent. If I've got that right, then that's a brand-new interpretation of the Election Act in British Columbia, and it puts an entirely different complexion on candidates, who we can select and what they can demand.

Hon. C. Gabelmann: If there had been an agreement that if there was money left over, the candidate would get it as part of their reasonable expenses for the campaign, then that would become part of the campaign expenditure. Even though it happened after the election, it would be. When you total up all the bills and expenditures, that would be part of it.

J. Dalton: Again, it's difficult being stuck in the corner, but still we keep fighting.

I have a question, under subsection 204(1). This may be more theoretical than actual, but I did write it out when I was reading it, so I want it on the record. If a party under this provision is no longer registered -- and that's section 204(1)(a)(iii) -- so we have a political party no longer registered, then we know that the money is paid to the CEO. What happens if the party then re-registers? Is that money returned to the party? Or does that money go into the consolidated revenue fund, which is provided later in this section?

Hon. C. Gabelmann: The party does not get the money back if they re-register. If they choose to deregister or if they are deregistered, that's it. But the money would go to the candidate in the next election or in a by-election. So that's clear, I think, to the member. I'm not quite sure what question remains, if any.

J. Dalton: I guess, then, perhaps we may be more speculative than actual. But what happens if the party has lapsed 

[ Page 16800 ]

and then revives itself, or perhaps it's changed its name, or its principles or philosophy are somewhat different? How do we know whether the new replacement party is in fact the same party? The Attorney has correctly directed us to subsection (2)(a), whereby the money will go to the candidate, if there's a subsequent candidate. But we might get into some interpretation problems as to whether in fact that candidate is representing the revived party.

Hon. C. Gabelmann: The candidate is the person. It doesn't matter what the name of the party is or if it's revived, has a new name, or whatever. It's the candidate as a person, not as a part of a party.

C. Serwa: I have a couple of questions on section 204. How does it differ from the previous Election Act? It was my understanding that the previous Election Act was very similar with respect to surplus funds having to go to a constituency association.

Hon. C. Gabelmann: That may have been a practice in political parties, but it was not part of the Election Act.

C. Serwa: The minister recognizes that probably 85 to 90 percent of the vote that a member gets is related to the party that that individual represents and only 10 percent or at the most 15 percent to the individuals themselves. It's hard to take, it's hard on the ego, but it seems to be a relevant fact. And obviously the ability to raise funding is based on the party structure as well. There are tax receipts given for contributions.

Now, in this particular section we find that the funds follow the candidate. I'm really interested in that aspect, because in this parliament we have people for whom the kindest word I can use is "chameleons" -- perhaps the real term is "political mercenaries" -- who move and flow where fortune is to be found. I have a great deal of concern with that, because they fail to partake of the responsibility that was vested in them by their constituents, and also with respect to the funding from those who supported the political party.

I find in this section that the chameleon candidate, or the political mercenary, comes out a winner, because the funding actually can follow the candidate rather than the political party. I have a great deal of concern with that. Perhaps the minister can explain to me why he has decided that this would be the appropriate tack to take and reward those who stand for whatever is the best possible chance of success in a re-election process.

Hon. C. Gabelmann: If there are surplus funds, the money in surplus goes to the registered party -- the constituency association or provincial association. The only instance in which the money follows the candidate in this case is if that party is deregistered or is no longer registered. Almost without exception the money is going to go to the registered party, because the parties are still going to be registered.

C. Serwa: How is that going to be ascertained? My concern is that tax receipts have been issued for those funds from a registered political party. If the party is deregistered, why should those funds be able to be transferred to a candidate who may run as an independent or as a member of some other party? That's what I fail to understand.

Hon. C. Gabelmann: The member needs to carefully read the section. The part that we're talking about now is only for candidates who represent a registered political party. So if you're a candidate representing a registered political party and there's a surplus, the money goes back to the party at one level or the other. If that party is deregistered or not registered, then and only then does a registered party's candidate have the money follow him or her to the next election. There are different rules for independents. That's the next subsection.

C. Serwa: It's related to this section, but probably to the previous act. What I fail to understand is.... The minister has indicated -- and perhaps that's why the act needed a rewrite -- that under the previous act, even though it was party policy, for example, the funds would be transferred to the constituency association. Now the minister is saying that there was nothing to prevent the funds from going to the candidate, even though tax receipts had been issued by the constituency association. I fail to understand the legality, but it's just an aside.

Hon. C. Gabelmann: There were no rules under the old act.

L. Fox: I'm still bothered by this. It seems that there could be a business opportunity here, and it may overshadow the political opportunity. Take a fringe party that's registered....

Interjection.

L. Fox: And I'm not talking about the PDA. But let's say -- and I hate to name a party, but for the sake of making my point I pretty well have to -- the Conservative Party provincially, because most of their aides are with the Liberals, anyway. I could choose to register as a candidate for the provincial Conservative Party, knowing that there's an opportunity to generate sufficient revenues for my campaign, not wanting to win and, indeed, not spending any money through the campaign, but showing up at the odd all-candidates' forum and so on. Knowing full well that I have a very small executive, I'll be able to then make a deal that I want a salary for that 28 days at the expense of the donor.

I'm really concerned that this interpretation the Attorney General gave us earlier will open up the process for misuse. When I speak on this, I don't mean any disrespect to the provincial Conservative Party. I only used them as a way of articulating my concern. This is something I had never heard of before this evening -- in fact, before a few minutes ago, when the Attorney General suggested that the leftovers could be made payable by the local party to the candidate. I think that's a very....

Hon. C. Gabelmann: In the first instance, let's not think about leftover funds, surpluses. Let's just talk about the campaign budget that a constituency might develop. They might decide that it's an appropriate campaign expenditure to provide moneys to the candidate so he or she can put milk on the table for his or her kids, that it's appropriate to provide an income so they can pay their mortgage and any other living costs they might have. If the party has struck a budget which has payment to a candidate so they can meet their living expenses as part of it, if they choose to do that rather than buy ads on the radio station with that money, that's a choice they 

[ Page 16801 ]

make. And when they're fundraising, anybody who wants to know what the budget looks like can talk to the campaign committee and ask to look at the budget before making a contribution -- in case they don't want to put milk on the baby's table.

[10:45]

J. Dalton: I was interested. Does the Attorney know whether there are any other jurisdictions that have a provision whereby a candidate could be paid a wage or something of that nature during a campaign?

Hon. C. Gabelmann: There is no provision; it's silent on that matter, in the same way that the existing Election Act and other election acts are silent on the matter.

The Chair: Shall section 204 pass?

Some Hon. Members: Aye.

The Chair: I recognize the member for Okanagan West -- on section 204?

C. Serwa: I'm just not too quick on my feet at 10:45. Yes, it's on section 204.

I have a great deal of concern with the potential for abuse. I listened to the hon. Attorney General on that, and I'm convinced that it must be something that the New Democratic Party has done in the past.

One of the major challenges that we face in politics -- and politicians all face this -- is the mounting cynicism out there with respect to benefits to elected politicians, let alone unelected politicians. I'm particularly concerned with this interpretation and its latitude that would enable paying a candidate for the writ period out of these funds. It doesn't seem to be responsible or reasonable or desirable that that should occur. I have a great deal of difficulty with that interpretation. Yet the Attorney General, in enunciating a response to the member for Prince George-Omineca, has indicated that it is quite in order to take donated campaign funds, with tax receipts having been given, and provide an honorarium or perhaps a wage to a candidate who is working.

Hon. C. Gabelmann: The moneys that would be paid, if they were -- and as I said, the act is silent in that respect -- would be publicly identified. Everybody would know that happened.

Let me give an example to the member. If someone who was in receipt of social assistance decided to be a candidate in an election campaign, should they continue to be on social assistance during the writ period, or should the campaign provide income to that individual? If it were me, I would prefer that the campaign pay my living expenses during the campaign rather than have the taxpayer pay that particular income. That would be a personal choice that I would make. The act is silent; the individual and/or the campaign can make that choice. I don't see why candidates and campaigns shouldn't be allowed to make that choice. It will be publicly disclosed, it will not be a secret, and if they've done so, as I say, it will be in the public domain. That's an example where I think the member might even agree that it's better to be on the party payroll than on the social assistance budget payroll during the course of the campaign if you're a candidate.

C. Serwa: I understand that some individuals on social assistance may be handicapped, for example, and are really quite competent and capable in other fields. As the Attorney General has used that as an example, I think that I and perhaps the public at large would wonder, if the person was not there for some peculiar reason such as a physical disability, how a person on income assistance could sit in the Legislature, for example, and be responsible to the citizens at large. Perhaps the minister would care to answer that.

I'm not downplaying it, but I say that it requires a great deal of capacity and experience to maintain this role. The minister is indicating that in all fairness, obviously, the individuals can run, but I wonder about the degree of contribution that the member could make if they were successful. Obviously the constituents would determine the desirability of that, so perhaps that answers my question.

Hon. C. Gabelmann: Yes, I think it does answer the question. Beyond that, of course, it might be really useful for this assembly to have some people who were so poor that they had to rely on social assistance prior to their coming to this assembly. It might be that the experiences they have in their day-to-day life would be really very useful and would make a major contribution to this place, rather than those of us who have all, for the most part, enjoyed fairly decent incomes in our private lives before coming here and representing that perspective as if it was the total perspective in our society. However, that's a long philosophical discussion. Let me say again that this act is silent on that question.

Section 204 approved.

On section 205.

D. Mitchell: We referred to this earlier; at least, the hon. Attorney General did. Section 205(2) refers to the chief electoral officer requiring or offering a solemn declaration that a contributor has not contravened the reporting requirements. Could the Attorney General confirm that that is only likely to occur if a complaint goes forward to the chief electoral officer? Or will the CEO have the ability, on his or her own volition, to conduct an inquiry to see if a contributor has not filed properly?

Hon. C. Gabelmann: Yes, the CEO can act under his or her own volition. I think it's section 260.

J. Dalton: I'm wondering why the amount of $250 was the figure. In the federal act, if I'm not mistaken, $100 is the limit. What's the magic of $250?

Hon. C. Gabelmann: First of all, I would concede it's an arbitrary figure. It was a figure we selected after canvassing a number of issues, one of which was the Members' Conflict of Interest Act, where a gift is plus or minus $250 -- it either is or isn't. In other jurisdictions across the province different numbers have been used, and $250 seemed to be a reasonable compromise. The traditional amount that people have talked about -- and I know there was some second reading conversation on this -- was $100; that figure goes back to 1972 or thereabouts with Lortie and the federal act. Inflation has taken care of most of that in the meantime, and it struck us that this was an appropriate number.

[ Page 16802 ]

C. Serwa: In section 205(2), the onus appears to be on the contributor to file with the chief electoral officer. If a contributor makes a donation, the responsibility is on the contributor.

Hon. C. Gabelmann: The section refers to disclosure by constituencies or candidates, not by contributors. Subsection (2) refers to a solemn declaration that a contributor must file if the chief electoral officer is concerned that they didn't make that contribution or that it was laundering of one kind or another.

Section 205 approved.

On section 206.

Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.

[SECTION 206, in the proposed section 206,

(a) by adding the following subsection:

(3.1) In addition to the requirements of subsection (3), a report for a registered political party must include the political contributions made by contributors who, during the period covered by the report, made political contributions to one or more of

(a) the political party,

(b) a registered constituency association for the political party, and

(c) a candidate for the political party

that, in total, have a value of more than the applicable amount under section 205 (1) (a). , and (b) in subsection (5) by deleting "subsection (3)" and substituting "subsections (3) and (3.1)".]

On the amendment.

D. Mitchell: Just briefly on this amendment, could the hon. Attorney General explain what its impact is going to be?

Hon. C. Gabelmann: This is in reference to a question the member -- I think it was the member for West Vancouver-Garibaldi -- raised earlier, so that the $250 can't be, in effect, $1,000 by contributing to four different parts. You have to add them together.

Amendment approved.

Section 206 as amended approved.

On section 207.

J. Dalton: I just had another question about the nomination contestant. We did raise this point earlier, and it's a bit of an unusual wrinkle to this act. I'm looking at subsection (1) of section 207. At the end of it, it says: "...if applicable, personal contestant expenses." Is that referring only to leadership contestants, as the heading suggests? Or does that also include nomination contestants, one of whom, of course, will be successful and then has to account for his contributions prior to the nomination and all expenses during the writ period, which any candidate must do?

Hon. C. Gabelmann: As I said half an hour or an hour ago, it applies to the candidate if it's in the writ period, but not if it isn't, and it does apply to leadership contestants.

Sections 207 to 213 inclusive approved.

On section 214.

Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.

[SECTION 214 (2), in the proposed section 214,

(a) by adding the following paragraph:

(b.1) a summary of the information included in any election advertising disclosure reports under Part 11 in relation to the election; , and

(b) by deleting paragraph (c) and substituting the following:

(c) a list of the names of any individuals or organizations who

(i) failed to file the required election financing reports or election advertising disclosure reports,

(ii) filed the required reports after the time period for filing established under this Division or Division 4 of Part 11, as applicable, or

(iii) exceeded the applicable election expenses limit or election advertising limit.]

Amendment approved.

Section 214 as amended approved.

Section 215 approved.

On section 216.

D. Mitchell: This division of the act deals with penalties for failures to comply. Under section 216, can the hon. Attorney General tell me: will the chief electoral officer be reporting under this subsection (1)(b) prior to an election writ being returned? That's probably unlikely. I'd just like to confirm this.

Hon. C. Gabelmann: No, the writ will be returned prior to the 90-day period available for filing the return.

J. Dalton: Firstly, under subsection (1)(a), it seems to me that this might unduly penalize the riding "in the case of a candidate who is declared elected...the member ceases to hold office and the seat of the member becomes vacant." Are we not perhaps trying to cure a problem? Indirectly or maybe directly we are creating a vacancy, which of course is both an expensive proposition and -- as we know in some ridings that have remained unrepresented for a fair period of time in this parliament -- means that constituencies do not have an MLA for some period of time.

Hon. C. Gabelmann: If we're going to have election limits, and people could run and violate those limits and not have the sanction of forfeiting their seat, then I suspect there would be very little incentive to live within the limits. The cost would be the double penalty. Well-heeled people might not mind that.

J. Dalton: That may be so, and I agree that we don't want people violating the act. But I've heard the Attorney tell us several times this evening that in the spirit of the act, he's expecting everyone will comply with it. Certainly on this side we will, so I don't know that it's a problem.

[11:00]

The other question I had was under subsection (1)(b), the double penalty. If that penalty is not paid, what provision is 

[ Page 16803 ]

there in this act -- other than that I know it's an offence against the act and that the MLA-elect now may lose his or her seat? Is there any provision, for example, to take civil action against someone who has not complied with a penalty -- let's get the money out of these turkeys"?

Hon. C. Gabelmann: Under section 262 there is an enforcement procedure, so the CEO can file with the Supreme Court a certificate specifying the name, etc., and the amount owed. Then if the court orders, it would become a court order.

J. Dalton: I know this question will be out of order, but I'll ask it anyway. I can't recall what the AG's amendment to section 262 is, but there is one coming up. Does that impact on the answer he has just provided?

Hon. C. Gabelmann: No.

C. Serwa: On section 216 -- rather interesting, this particular section. In the '86 and '91 elections that I contested, for example, I was never told. I was informed that I should not know who had contributed to the campaign. So to this day, frankly, I have no knowledge of who contributed. It seems to me that that was very important, because the individuals were contributing to a political philosophy, perhaps, rather than looking for some sort of return on their investment. This particular section makes the candidate responsible for knowing who has contributed to their specific campaign and the sums of money that are actually contributed, and for the penalties: the loss of elected office and having to pay the chief electoral officer double the amount by which the election expenses exceeded the limit.

It doesn't seem to me to be a responsible situation, if we're looking for objective, fair-minded members, to move them into a position where they not only have to accept responsibility.... They're forced to know, for example, all the individuals and the sums they contributed to their campaign. It seems to make the process so that you fall into a situation where you can be so readily accused of conflict of interest. All of us in this Legislature have stood time and again and been very concerned with that aspect, and here you're virtually forced into a situation where it is public information, and then anyone in this Legislature can cry "foul" or "conflict of interest" relating to that campaign fund.

If we're looking for objectivity and fair-mindedness on the part of the candidate, it seems that this section doesn't encourage that whatsoever. Perhaps the Attorney General would respond to that.

Hon. C. Gabelmann: The member, if he hasn't said it during this contribution, has said in other contributions that he doesn't know and doesn't want to know the contributions. The financial agent is the person who does know and who manages the expenditures, and the candidate simply has to trust that he or she has appointed a financial agent who has the ability and confidence to do this job and not get the candidate into trouble. Otherwise, the candidate may want to spend more time doing it. But I would think that the candidate doesn't have much time to do that, and it's a question of getting the right financial agent to make sure that there is no overexpenditure.

D. Mitchell: A politician has to be out of their mind to run for public office in the first place. But under this legislation, we're going to make it so prohibitive and are providing such disincentives that you have to wonder why anyone would offer themselves for public service under a system where, under section 216 of this act, the relationship between a candidate and a financial agent is going to have to be one of such trust. The Attorney General says that it is going to have to be one of trust, but it's going to have to be one of such dependability and accountability.... As the member for Okanagan West says, even though an individual candidate may not know -- and may not want to know -- the identity of those who contribute to his or her campaign, may not want to know the exact amounts or numbers and may not want to get involved in that process whatsoever, that candidate is going to have to place implicit and explicit trust in the financial agent to do the job accurately. If the candidate makes a poor judgment in that regard or if some human error enters into the process, the penalty under subsection (3) is that the member is going to cease to hold office. The seat of the member will become vacant and the reputation of that elected representative is going to be ruined because of a process that the individual politician has no control over. What accountability is there for the financial agents? Also, does the hon. Attorney General have any legal opinion as to whether this section would be enforceable or constitutional?

Hon. C. Gabelmann: The section is mitigated, or softened, by section 218(5), where the court can "grant relief from a penalty if the court considers that, in relation to the non-compliance, the financial agent...acted in good faith." If the agent overexpended and it was done in good faith, the court has the ability to waive that part of the penalty or to issue an order in respect of it.

C. Serwa: Going back to section 216 -- and I made reference briefly to section 218 because the Attorney General mentioned that -- it seems to me that this section would induce what is commonly called a witch-hunt if a candidate's election expenditures appear to be close to the limit. First of all, there's no time interval here; it's not as if there would be a voluntary disclosure. A losing candidate could institute sort of a witch-hunt, make an investigation, talk to a number of people -- they may be trumped-up charges or they may be realistic costs -- and suggest that there are four or five areas where actually.... It may be controversial -- it may be in dispute -- but he suggests that they should be counted as election expenses, perhaps 60, 90 or 120 days after the election. It works better than recall. At the very least, you're going to subject the successful member to a fair bit of stress and pressure. At the very worst, you're going to subject that member to very expensive court and legal costs. I'm particularly concerned about that, because it doesn't seem to be a rational type of solution to a perceived problem. It doesn't seem to be realistic or fair.

Hon. C. Gabelmann: First, it's a provision that's common in other jurisdictions across the country, so the example hasn't created problems, to my knowledge. Second, the member argued earlier that the expense limits were too high. If that's the case, candidates are not going to get in trouble, because they won't come near these limits. That may be a fatuous argument for every situation, but it will apply in most situations; most candidates won't get this high. Third, there is a provision if there is an overexpenditure, and if it was in good faith. For example, if a financial agent was operating 

[ Page 16804 ]

right at the margins of the limits, got a quote of $10,000 for the total cost of leaflets in the campaign and then the printing bill came in and it turned out to be $15,000.... If he had a quote for $10,000 but it turned out to be more, he would obviously have been acting in good faith. It would be a very simple procedure to rectify that, and I'm sure that no court would order forfeiture.

G. Wilson: As someone who believes that the spending limits are too high, that doesn't necessarily mean that we should penalize the candidate as a result of actions their financial agent has engaged in or, in this case, not engaged in. It strikes me that this act has said that if your financial agent, for whatever reason, fails to comply with this act and therefore allows elections limits to be broken, the very first act, which is going to be levelled against this newly elected and rather jubilant MLA, is that they will have themselves hauled into court. They're going to have the vagaries of our judicial system determine whether or not this was or was not a deliberate event. And you're going to have the financial agent, who is financially liable and financially responsible, come into court to try and defend their actions.

Where's the penalty? What right of recourse does the judge have if the financial agent has broken the law? Do they go after the financial agent? No. What they will do is remove the seat of a duly elected Member of the Legislative Assembly. This is the real recall bill. This is the nuts and bolts of the.... This is how the government is going to win the next election. That bunch of Howe Street cronies over there can't stick within a spending limit if they tried to. My guess is that you're going to have a whole bunch of vacant seats and a whole bunch of court cases, and everybody will be dragged into court to try and explain the fact that they actually stayed within their spending limits.

[F. Garden in the chair.]

The penalties in this act say that the only recourse a judge has for the actions of a financial agent is to penalize the candidate. I still haven't heard the minister tell me whether or not he has a legal opinion to the effect that that can be done, because I'm not so sure that it would stand a challenge.

Hon. C. Gabelmann: First of all, just to clarify it, actions can be taken against a financial agent under other sections, so there are, effectively, penalties to the agent.

Is this constitutional? Will this stand up? Far tougher provisions stand up in other provinces across the country. For example, if you overspend in other provinces you not only lose your seat but you also can't run for a specified period of time -- as much as five to eight years, depending on the jurisdiction. We're not saying that; we're saying the candidate who forfeits could in fact run in the by-election, which would occur in the very near future. The Liberal legislation in Ontario says that you are prohibited from being a candidate or holding office for eight years. If that's constitutional and stands up, then this certainly will.

The problem is that if you don't have forfeiture and simply have a fine, then it's the cost of doing business. The member is concerned about Howe Street -- millions don't matter -- so how big is the fine for overexpending? The effective way to ensure compliance with the limits is the penalty that really hurts, which is forfeiture. But we don't go so far as to prohibit that person from running again for some period of time.

G. Wilson: This is not going to be a problem for members of our party, I can assure you, so I'm really not that concerned for our political party. But one of the things I am curious about is that under section 216(3), presumably, there is a delay. It may take eight months to get into court to prove this. One doesn't actually relinquish one's seat until such time as a court orders one to do so. The fact that there is a charge, or that the CEO has found that elections expenses may have been breached.... A person files an appeal with the court. Do they hold their seat until the time the appeal has been heard, or do they actually have to stand down, because they won't have actually been sworn in?

It's important that the Attorney General hear this part of my question. It's important that this part of the question be heard, because when an elected Member of the Legislative Assembly is successful, they are not actually a member until such time as they are sworn into office. If between the time of the election and -- prior to -- being sworn in as a member a breach is deemed to have occurred, will that prohibit the swearing-in?

[11:15]

Hon. C. Gabelmann: After a few days -- it's usually a week or two after the election -- the writ is returned. Following that, immediately then the member could be sworn in. It's not for another 70 days or so till the 90-day reporting period is complete. So the member is sworn in and is a member. The 90 days occurs. Then there is a suggestion that there was overspending. The member continues to hold his or her seat until -- and if it happens -- the court orders forfeiture, following the whole process.

Section 216 approved.

On section 217.

D. Mitchell: The Attorney General has said under the previous section that the report of the chief electoral officer, dealing with any penalties under the act, clearly will not be in until after the election writ is returned. That's been clearly established. There are serious penalties, though, for failure to comply. Under section 217, we learn that "a registered political party whose election expenses exceed the...election expenses limit is subject to" a severe penalty, including possible suspension of the registration of that political party for a period of up to six months.

What would happen in the event that this political party was the party that was victorious in the provincial election? What would happen in the event that a political party actually won the election and, after the election was returned and that political party had formed the government, the chief electoral officer came back and said that party had exceeded its election spending? What would be the implication of that, constitutionally and otherwise, for parliamentary democracy, if that political party -- that was now the governing political party -- was to have its registration suspended for six months?

[ Page 16805 ]

Hon. C. Gabelmann: The first thing is that the definitions of political party in this bill have no impact whatsoever on how the House decides what political parties are. They're two separate processes entirely.

But what's the effect if the party wins the election but is deregistered? For the period of that six-month deregistration, they would not be able to issue tax receipts. They would not be able to have their name on a ballot if, for example, there was an election in that period -- not likely, because theoretically it will be longer away than the six-month period, but it is conceivable. That's a pretty dramatic penalty.

D. Mitchell: I'm wondering about the impact of what the Attorney General has said here. The penalty doesn't seem to be really very severe for a party that wants to form the government, does form the government after an election and subsequent to that -- if the CEO is actually brave and independent enough to bring in a report that might indicate that this party during the election campaign exceeded the spending limits under the act and broke the law of British Columbia, in effect -- might have its registration suspended for six months. Well, fine. The Attorney General is saying that this party could conceivably, under those circumstances, continue to form the government in the Legislative Assembly and would only be penalized to the extent that it might not be able to issue tax receipts for a six-month period or to run a candidate, in the unlikely event that there might be a by-election during the first six months of its mandate. That doesn't seem to be a very strong penalty.

I wonder whether constitutionally a governing party could continue to hold office under the circumstances, where it was proven that it had actually broken the law of the province. How could that be?

Hon. C. Gabelmann: The penalty is actually pretty severe, if one thinks about it. First of all, the party and its constituent parts cannot in that six months issue tax receipts. That brings a party to a halt from a financial perspective.

Interjection.

Hon. C. Gabelmann: Well, it does. Many people contribute their membership by monthly donations. There would be no tax receipts for those monthly donations in that period.

Interjection.

Hon. C. Gabelmann: Well, that's another matter.

But let me go beyond that. That is one effect of the penalty. Another is that if there were a by-election in that period, the party would not be able to have its name on the ballot. Another consequence would be that if it were a hung parliament, there was a new general election, and they were in that six-month period, they would not be able to have their name on the ballot. They would not be able to run as a party in that election campaign; they wouldn't be able to issue receipts, and they would be at a great disadvantage. No party is going to take the risk of having that happen to it.

C. Serwa: By golly, we're certainly hearing a great deal from a party that just loves to bend principles. It sets up a principle and right away bends it. We've just looked at section 216, where if a candidate and his fiscal agent in all innocence go over the limit, that candidate is discounted from office. That is a pretty stiff penalty as far as I'm concerned. In section 217 we find that a provincial party can go over the limit, and all of a sudden all of these severe things are put on it, but there's no severity at all. The Attorney General talks about the inability to issue campaign receipts -- donation receipts, tax-free receipts -- for a period of six months. Well, we all know that the major portion of funding comes during pre-election activity and that the receipts will all be looked after. Another thing is that the Attorney General knows full well that all you're required to do is issue one receipt for the year -- it can be done on an annual basis -- so that is no penalty whatsoever.

The reality is that if 216 is a responsible action on the part of the chief electoral officer, then 217 pales; it pales in comparison to the penalties in section 216. In section 217, if you were consistent with the principle established in section 216, all government members would have to lose their seats, and we would be going into another provincial election -- if you were to be consistent. The only consistency about sections 216 and 217 is that they are inconsistent.

Hon. C. Gabelmann: This provision, even though it's not the same for the entire caucus of a particular party as the individual penalty, is the toughest in the country. In section 216, which concerns the individual, we are weaker than sections in many other parts of the country are. In section 217, which concerns the party penalties, we're tougher -- far tougher. For example, in Saskatchewan it's a $5,000 fine; under Lortie it's a $10,000 fine; in Quebec it's a $10,000 fine; in Newfoundland it's a $10,000 fine; etc.

The risk a party runs is that there may be a minority parliament, and the deregistration period could coincide with the next election. Let's say it's not the government; let's say it's the official opposition -- or any other party for that matter -- who could then be caught by a government calling an election during the six-month period when they are deregistered. The party can't incur any election expenses in that six months, which means they wouldn't be able to run a campaign. That has got to be a significant and severe penalty. It's the toughest penalty in the country. The members want even tougher penalties. I think that that is so tough that if I were responsible for a central campaign, I would make sure that I wasn't anywhere near the actual limit for fear of this consequence.

C. Serwa: It's rather interesting when I listen to the Attorney General discuss section 217 and the way this legislation was drawn up. It appears that nobody does any thinking whatsoever; they just look around and see what everyone else is doing and then make it tougher or weaker. That somehow justifies it, as if jumping from the frying pan into the fire is okay because everybody else is doing it. Who does some original thinking in the legislation that's drawn up by this current government? Is it not in-house thinking based on a value system, rather than exploring what all of the other jurisdictions have and then copying that or making it a little harsher or a little more lenient? It doesn't make a lot of sense to me.

Hon. C. Gabelmann: These two sections are the result of original thinking. Nobody else in the country has what we have: nobody else in the country has recourse to courts; no 

[ Page 16806 ]

one else in the country has this particular penalty for a party violation of spending limits. This is a wonderful example of original thinking.

J. Tyabji: I'm trying to get this straight. I've been following this debate all evening -- nothing better to do, I'm sure. What I found interesting is that the Attorney General has been fairly specific about some of the penalties that a party might face if they exceed the limits that are set in this act. What I'm curious about is to what extent the Attorney General thought about bringing in the same provisions -- or will there be provisions accompanying this act? -- if there are financial irregularities that may not exceed the spending limits.

Earlier in the debate the Attorney General pointed out that under the old act, he himself would probably have exceeded the $50,000, because we're taking into account a lot more things that wouldn't be considered money spent but could be grants in kind and those kinds of things. So let's say that there's an innocent mistake, as the member for Okanagan West pointed out, and someone has exceeded it. That would go through a process that would affect them politically. How could it be possible for a political party, whether it be the government or the official opposition, to violate another statute -- like the Society Act, concerning their financial obligations, bylaws that are registered, failure to file reports or the many different things that govern political parties -- and not have the same kinds of penalties imposed? That's what I'm wondering. This section seems fairly harsh. If the objective is to keep political parties on the straight and narrow, why isn't it encompassing more than just this -- or is it?

Hon. C. Gabelmann: I know from other debates in this House that the member has an interest in environmental issues, and the member understands the principle of a licence to pollute. We did not want to create a licence fee for the violation of the limits. Campaign spending limits are a significant and fundamental feature of the bill -- in fact, one of the two fundamental features of it. It goes to the heart of an election campaign, it goes to the heart of the principle of the bill, and it requires significant penalties. The other kinds of violations are of less significance. If the bylaws are.... I can't even think of examples, but if they're minor or less significant issues, then you don't want the major penalties that we're talking about here. This goes to the heart of what we're talking about, which is having a limit. We don't want to have a licence to pollute.

J. Tyabji: It's encouraging to have that principle with respect to spending limits. What is the objective of having such strict spending limits? Is it to keep parties accountable to the public? Is that what it is? If it is, why is it such a narrow focus that this bill is capturing in this section? If we want to keep parties accountable, why wouldn't this have a slightly wider scope? I could give the Attorney General some specific examples outside this House, and maybe he could tell me where they're captured in this bill. If the Attorney General is saying -- as I think he was in some of the other questions -- that part the objective of this is.... If someone doesn't hold to the intent of the bill, then they will be hampered from running candidates or from performing as any other party would in an election. That's a good thing. If someone is violating the intent of the statute, we'd want to ensure that they're kept accountable in this act.

D. Mitchell: It's just for six months, though.

J. Tyabji: That's right; it is just for six months, as the member for West Vancouver-Garibaldi points out. So minority governments or by-elections would be about the only place that they would be affected. Is there a wider scope in terms of holding the parties accountable during an election campaign?

[11:30]

Hon. C. Gabelmann: In section 217 we're dealing with the political party. The kinds of penalties that could.... I mean, there could be some atom bomb penalties: the party can't run again in the next election, or the party has to forfeit every seat. We didn't want the penalty to be so high. We picked the toughest penalty for parties in the country, but it's not one that is so debilitating that it hampers the political process. I think the member is actually talking to an earlier section.

G. Wilson: Correct me if I'm wrong, but according to the rules of the House, if a political party is not a registered party in British Columbia, then the party cannot be registered as such within this House. In fact, it seems to me, having gone through this process, that in establishing political-party status.... It's a point I have made time and time again. The member for Okanagan East and I, the member for Powell River-Sunshine Coast, sit in this Legislature as members of the Alliance Party. We are not independents. Notwithstanding what we may hear from others, we sit as members of the Alliance Party. The member for Okanagan West is not an independent; he sits as a member of the Social Credit Party.

For the purposes of this House, it may be that the rules accord to us the same provisions as independent members with respect to responses to ministerial statements and those kinds of things -- although, again, the privileges of the House are restricted because we don't have four members, and that's the key number. But it was made very clear when we registered, and made sure, that when I'm up speaking, for example, Hansard will have my name and the Alliance name. It will not have "independent" on the television. All our correspondence doesn't deal with us as independents; it deals with us as the Alliance. It was made very clear that in order to qualify for that status, we must be members of a registered political party in British Columbia. So if under this act, in this section, you deregister a political party or suspend its registration for six months, how is it, then, that the elected members who may sit in government, for example, could continue to represent a political party that is no longer registered?

Hon. C. Gabelmann: They are still a registered political party, but the benefits of registration are suspended. The benefits of tax receipting, of having their name on the ballot and of incurring election expenses are suspended. It's a period of suspension. It is not a period of de-registration. I may have said otherwise inadvertently -- I don't know. But it's a period of suspension as opposed to a period of deregistration. So the party would still be a registered party, but it would have a penalty. When Wayne Gretzky goes in the penalty box for two minutes, he's still a Los Angeles King and he is still one of the players on the team in that game, but he's suspended for those two minutes.

Interjection.

Hon. C. Gabelmann: I just made it up. It shows.

[ Page 16807 ]

The next question is about rights in this House. The rights that are accorded by this legislation do not transfer into rights here. The House makes up its own rules with respect to what goes on in here.

G. Wilson: I don't want to beat this to death, necessarily, but clearly the language in this section is different than what we have just heard from the Attorney General. Section 217(1) says: "...(a) the chief electoral officer must suspend the registration of the political party for a period of 6 months from the date of the suspension as recorded under section 169...." So, quite clearly, this isn't a question of: "Well, we're going to eliminate some of your privileges as a political party." We're suspending registration. Under the terms of registration, under section 169, it's very clear: if you -- a political party -- are not registered in British Columbia because of suspension, then all of those rights and privileges are removed. The rules of this House say that in order to be listed as a member of a political party, you must be a member of a registered political party. If you suspend a political party, it strikes me that you have now got a group of independents over there who call themselves government.

Hon. C. Gabelmann: The answer to the question is in section 154 on page 111, which we've done before.

An Hon. Member: That was a month ago.

Hon. C. Gabelmann: That was last Thursday or Wednesday -- I have forgotten now. Section 154(3) says: "If the registration of a political party...is suspended...the [party] must not do anything" -- so it's still an organization -- "[otherwise] authorized...." In other words, it can't do the things that are listed above. They can't be identified on a ballot, they can't issue tax receipts, they can't incur election expenses, etc.

D. Mitchell: The Attorney General has just confirmed that there really isn't much of a disincentive for a political party not to overspend in the next provincial election should this act become law. The penalty is a slap on the wrist. A party that becomes elected to government could overspend significantly in the next election and just suffer a minor embarrassment, but continue to govern, even though it had done that, consciously or not. It's regrettable that the Attorney General has confirmed that fact about this new Election Act. We have a lot more to debate on the bill. We have made some progress today, but given the lateness of the hour, I would move that this committee rise, report progress and ask leave to sit again.

Motion negatived on the following division:

[11:45]

Hon. C. Gabelmann: In the five minutes from moving the motion until now, the official opposition has completely reversed their position -- but what's new? I had suggested that we continue for another hour, because the majority in the House and the majority of the opposition had indicated that they wanted to do that; but having the results of the vote, I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; the Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. C. Gabelmann moved adjournment of the House.

Motion approved.

The House adjourned at 11:47 p.m.

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