Calling Independent Federal Candidates . . .

Fair Vote Calgary received the following correspondence from Dr. Maxwell Anderson, regarding election financing for independent candidates. It is offered unedited for information, particularly for those who might be considering becoming independent candidates in the forthcoming federal general election. Candidates should confirm the information with Elections Canada; do not rely on what you see here, although it is believed to be correct.

Dr. Maxwell Anderson wrote:

A CBC radio interview with Independent MP Brent Rathgeber brought to my attention that federal Independent candidates have been suffering under a huge and unfair disadvantage: By law, unlike the registered political parties, they haven’t been allowed to fund-raise with tax receipts for donations, until the election is called! This cripples their fund-raising, because the income tax credit for normal political donations is generous, and naturally no-one wants the discomfort of making an early political contribution that then cannot be tax deductible merely because it was made before the writ dropped. Make a contribution the day before, and you’re out of luck for a tax credit – if you made it to an Independent candidate. This is likely a major reason why we don’t have more Independent MPs. The public doesn’t hear about or take seriously any candidate who can’t fund a campaign.

I have constructed a work-around solution, described below, that effectively reduces this iniquity. First, though, I should explain why I think this is of relevance to Fair Vote Canada since our interest is mainly fairness to voters rather than fairness to politicians.

Proportional representation is FVC’s first goal, but it also has four related goals. Although our Statement of Purpose doesn’t specifically mention Independent candidates, it does mention the “democratic legitimacy” of our “electoral institutions”, which implies a general commitment to fairness. It also calls for “the right of each citizen to equal treatment under election laws”, and since Independents are citizens, they ought to be accorded equal treatment under the election laws to the extent possible. Finally, if an Independent may be considered a very small political party, then they would be a proper object of FVC’s voter choice goal of “fair and unrestricted competition among political parties”.

Below, I quote the correspondence which explains the details of the work-around solution. Essentially, it means Elections Canada will interpret the Canada Elections Act such that Independents can now campaign for donations right away, and then access those funds and issue tax receipts in respect of them as soon as the election is called. As far as I can determine, this procedure has not previously been recognized by candidates or Elections Canada as legal and available.

I have informed the eight Independent MPs of this ruling, but of course I have no way of reaching other citizens who are currently contemplating running in October. If you know of any prospective Independent candidates, please pass this information along to them in the interests of fair voting. — Maxwell Anderson


 

Sent: March 19, 2015 2:22 AM

Subject: Question for the Chief Electoral Officer

Office of the Chief Electoral Officer
Mr. Marc Mayrand

Dear Sir:

Is it acceptable under the Canada Elections Act for a prospective candidate to collect pledges of possible, but not definite, future contributions?

Background to the question: The difference in respect of the eligible time frame for tax receipts of monetary contributions, between those candidates whose campaign finances pass through a registered political party and those candidates who are “independent”, would seem to be fundamentally unfair and necessitated merely by the administrative requirement that tax receipts only be issued in respect of campaigns of candidates whose nominations have been confirmed by the returning officer, and not necessitated by any intention of Parliament to put independent candidates at this particular disadvantage; hence it would seem both fair and appropriate to interpret the Canada Elections Act as being silent on any means by which contributors could commit to making a future contribution contingent on a candidate being confirmed by the returning officer. Such a pledge could, in practice, take such forms as undated cheques or credit card information combined with a statement that no contribution will be made or deposited until and unless the prospective candidate becomes eligible to issue tax receipts. An acceptance of this administrative means would go a long way towards leveling the playing field for independent candidates, allowing them to collect pledges during the long period before the election writ is issued at the same time that the political parties are collecting actual donations, thereby enabling independent candidates to plan their campaign budgets, which planning is necessary to take reasonable part in a modern Canadian election. Cases where the tax receipt rule appears to raise a serious injustice include that of current Independent MP Brent Rathgeber, who cannot issue tax receipts until the next election is called.]

I look forward to your response with appreciation.

Sincerely,
Dr. Maxwell Anderson


 

from: INFO10 <INFO10@elections.ca>
date: Tue, Apr 14, 2015 at 11:05 AM

Subject: Elections Canada Reply to Dr. Maxwell Anderson

File 425763

Dear Dr. Anderson,

Please find below Elections Canada’s reply to your request.

You asked if it is acceptable for a prospective candidate to collect pledges of future contributions. The potential contributors would provide undated cheques or their credit card information and be assured by way of a statement that no contribution will be made unless the prospective candidate becomes eligible to issue tax receipts.

We cannot provide legal advice regarding specific factual situations. We can, however, provide guidance with respect to general principles of the Canada Elections Act (“Act”).

The Act does not regulate pledges of future contributions.

A “monetary contribution” is defined in s.2 of the Act as an amount of money provided that is not repayable. The pledges you describe are not “monetary contributions” because the amount pledged has not yet been “provided” to the candidate.

Please note that a candidate may receive contributions before being confirmed as a candidate. Section 477 of the Act states that for political financing purposes, a candidate is deemed to have been a candidate from the time they accept a contribution, borrow money or incur an electoral campaign expense. This may occur before the confirmation of the nomination and before or after the election is called.

The candidate has to appoint an official agent before accepting a contribution. Pursuant to s. 477.46 of the Act, a bank account for the sole purpose of the campaign must be opened in time for all financial transactions of the candidate to be made through the account.

We trust that the above is of assistance.

For more information about Canada’s federal electoral system, visit our Web site at www.elections.ca or call 1-800-463-6868, toll free in Canada and the United States. Our hours of operation are from Monday to Friday, 9:00 a.m. to 5:00 p.m. (Eastern Time).

Derek MacPherson
Public Enquiries Unit
Elections Canada


 

Sent: April 15, 2015 2:03 PM

To: Rathgeber, Brent – Assistant 1

Subject: Delayed Donations – Clarification of Election Campaign Financing and Donation Rules

Dear Mr. Rathgeber,

Your situation came to my attention last month when I heard a CBC Radio program which indicated Independent Members of Parliament were at an unfair disadvantage, inasmuch as they are unable to issue tax receipts for donations made in advance of an election being called, unlike registered political parties.

It occurred to me that this was a feature of the Canada Elections Act whose intent was to protect the public and preserve financial accountability by a necessary administrative rule, rather than to disadvantage Independent Members of Parliament, and that therefore it might be possible to construct a reasonable work-around.

Consequently, I wrote to Elections Canada, and have received their confirmation that MPs such as yourself, or indeed any prospective candidate, will not be interpreted as being in abrogation of the Canada Elections Act merely by collecting pledges of donations in the form of undated cheques or credit card information, under the condition of issuing a statement to potential donors that their pledged funds will not be donated until and unless the recipient is eligible to issue a tax receipt, that is, when the election is called and the Returning Officer has confirmed the candidate.

By this means you can seek financial support and budget for an election campaign ahead of time, quite similar to the candidates of the registered parties.

I did not enquire of Elections Canada as to whether they would permit a similar contractual scheme with a separate trust account for each prospective donor holding actual funds in lieu of undated cheques or credit card information, as I felt this would be unwieldy and/or not permitted.

I am a member of several groups, such as Fair Vote Canada, whose primary aim is to increase fairness to voters through implementation of an electoral system with proportional representation. However, as you know, there are many other potential areas of governance reform. I hope that donation pledges will be a helpful tool to increase fairness for independent candidates, and thereby to foster increased choice for voters.

I have enclosed my correspondence with Elections Canada below, with the details.

Feel free to share this email with whomever you wish. Thank you for your service to the people of Canada.

Sincerely,
Maxwell Anderson, PhD


 

from: brent.rathgeber.a1@parl.gc.ca
date: Mon, Apr 20, 2015 at 10:49 AM

Subject: RE: Delayed Donations – Clarification of Election Campaign Financing and Donation Rules

Dear Maxwell,

Thank you for the valuable information, most of which we will be able to employ in the upcoming election!

Sincerely,

Brent Rathgeber
Member of Parliament
Edmonton-St. Albert