Is there a spending loophole in the Fair Elections Act?

The implications of 376(3)

The Harper government’s proposed reforms to election law include the following exclusion to what is considered a campaign expense.

376(3) The commercial value of services provided to a registered party for the purpose of soliciting—by mail, telephone or other electronic means—monetary contributions is not an election expense under subsection (1), as long as the soliciting is directed only towards individuals who have made at least one monetary contribution of $20 or more to the registered party or to one of its registered associations, nomination contestants or candidates in the five years before polling day for the election period in which the services are provided.

In simpler terms: if a person has given more than $20 to a party in the previous five years, said party can call that individual to ask for more money during an election campaign without the expense of that call counting against that party’s expense limit.

Last week, the New Democrats raised two questions about this. First, Thomas Mulcair wondered how Elections Canada would be able to govern this. Second, during Pierre Poilievre’s appearance before the Procedure and House Affairs committee, Craig Scott wondered if the clause would “allow a party to make calls where they simply add in and ask, where they say, ‘Oh, by the way, could you please donate,’ and at the same time the purpose of the call is getting out the vote, or asking to volunteer, or persuading somebody to vote?” (Former Conservative strategist Tom Flanagan also raises questions about the new rules in an interview with the Star.)

The Prime Minister didn’t address Mr. Mulcair’s question and Mr. Scott’s time expired before a full discussion could be had on his point, so I followed-up with Mr. Poilievre’s office about those two concerns. Here, via email over the weekend, is the minister’s response.

First, both the Liberals and NDP exempted fundraising expenses from spending limits in their leadership races. Fundraising expenses are already partly exempt from the spending limit (407(2)). It is not a foreign concept.

Second, the number of donors to a party is so small that calls directed to them would not substantially help “get-out-the-vote”, not to mention that donors are the most motivated to vote and least in need of a reminder call.

Third, the Fair Elections Act includes compliance measures that will make it harder to skirt these rules. Under the Voter Contact Registry rules, unsolicited phone calls to individuals to raise funds for a registered party, a registered association, a candidate or a nomination contestant are captured as voter contact calling services (new parag.(e) of the definition of “voter contact calling services” in the new section 348.01 in clause 75).

Fourth, all Election Period spending by registered parties is eligible for a 50% rebate from taxpayers. If fundraising calls are not exempt from election spending, taxpayers will be stuck paying half the cost of fundraising calls and letters. We judge that inappropriate.

According to the new sections 348.16 and 348.19 of the Canada Elections Act proposed in clause 77, political parties would be required to keep a copy of scripts or recordings used to make unsolicited voter contact calls for one year after the election in the following cases:

— where a calling service provider is used to make calls on its behalf using an automatic dialing-announcing device

— where a calling service provider is used to make live voice calls on its behalf and

— where the party uses its internal services to make calls using an automatic dialing-announcing device.

Finally, the Fair Elections Act will require tough new compliance audits of parties’ expenses that are not currently required. Auditors will have the power to ask for the copies of the lists of fundraising calls parties made to ensure that they were directed at people who have donated $20 or more in the last five years as the rules proscribe.

This didn’t quite address the question raised by Mr. Scott: could parties ring up their previous donors to ask for money, but then also inquire about volunteering or putting up a lawn sign or voting? I went back to the minister’s office on that specific point. Here is the response this morning.

The proposed subsection 376(3) contains a “purpose test” for the exclusion to what constitute an election expense to apply. The calls must be for the purpose of soliciting monetary contributions from past supporters.

The more a party relies on these calls to obtain other forms of support from a past supporter, the higher the risks that it will be investigated and potentially prosecuted for having failed to submit a complete election expenses return. As required by the proposed subsection 376(3), the calls must be made for the purpose of soliciting monetary contributions in order for their costs to be excluded from mandatory reporting as an election expense.

So there’s the minister’s explanation. I invite those familiar with election law and campaign tactics to speculate as to the ramifications.

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