Monday, January 04, 2010

Conservative legal mischief

Still waiting on that Conservative Party of Canada v. Elections Canada judgment regarding the GST rebate issue that was released at the end of last week. There was, however, a brief Globe report on it Saturday, providing some basics of the judgment: "Elections Canada must accept Tory cash, judge says." Here are a few excerpts then some thoughts on the politics of it all below.
...the issue was whether the country's electoral body has to accept a Tory cheque for $591,117.40. The Conservatives said they owed Elections Canada the money because the party got too much of a rebate from the 2004 and 2006 general elections - refunds from both Elections Canada and Revenue Canada.
Why would the Conservatives bring such an action? So they could reduce their liability from overspending by approximately $1.3 million in the 2006 federal election, the "in and out" case that is still ongoing between the Conservatives and Elections Canada (awaiting judgment). This rebate case is spawned from that case and so it is primarily about political optics, salvaging a p.r. victory out of their "in and out" jeopardy. And as an additional byproduct, it can, in the future, affect party spending during election campaigns. First, more on the decision:
Like other large political parties, the Conservatives receive rebates on their campaign expenses from Elections Canada. As a non-profit organization, they also get a tax rebate. The judge's ruling means they won't have to count those refunded taxes as part of their elections expenses. Meanwhile, the Tories are calling on other parties to make similar paybacks, arguing the country's big political parties have been "double-dipping" by getting refunds twice on the same cash.

Mr. Mayrand argued that changing the way political parties tally their election expenses would compromise the "level playing field" Elections Canada is trying to create: It would effectively allow parties classified as non-profits to spend more, because the GST they get refunded from Revenue Canada wouldn't count toward their spending cap.

In his ruling released Thursday, Mr. Justice H.J. Wilton-Siegel said that isn't the Election Act's concern in the first place.
While yes, we will have to see the judgment in order to fully understand all of the technical implications, it's possible to make a few preliminary observations. Primarily that the GST rebated amount will not be counted as part of a party's election expenses. This will free up spending room for parties, extra spending room formerly occupied by the GST expense (i.e., the rebated amount from Revenue Canada). Presumably, the more a party spends, the more this development will help them over others.

Further, I think we should be careful on the point of whether this ruling extends to the other parties. It's not clear that any of them were parties to this litigation (see Dan Lauzon quote here on behalf of the Liberal party on September 1, 2009). The tone of the Conservative lawyer in the Globe report suggests that as well, where it is only as a matter of Conservative advocacy that a desire is expressed that other parties should similarly refund monies to the government.

The point remains that all parties were following the law as it stood in those prior campaigns and it's unclear how other parties can be dinged retroactively by virtue of present Conservative litigation against Elections Canada which causes a change in the law years later.

Going forward, the relevant statutory provisions would be interpreted in accordance with this judgment. So it would have significance in a future federal election in terms of party spending. That is assuming the judgment stands, that it is not appealed and modified or overturned.

On the political arguments being offered up by the Conservative party's lawyer and the Conservatives themselves, it's interesting that they would be cajoling other parties to follow this judgment obtained by the Conservative party.

The Conservatives have spent a bundle of taxpayer money in pursuing the "in and out" litigation and now this case against Elections Canada. The public pays for Elections Canada's legal fees in all this, while they are sued repeatedly by the Conservatives (and indirectly, the public pays for Conservative party legal fees too, by virtue of the tax breaks on charitable donations). So any arguments about who is guarding taxpayer moneys more zealously than others should be restrained coming from Conservatives. How much taxpayer money have they spent in order to be able to crow with this judgment and point at other parties? More than would ever be refunded to the treasury? They should be asked.

It's also a plainly hypocritical plea coming from Conservatives to be waving a court judgment around for others to follow. The Conservatives don't want the courts involved at all when it comes to orders requiring the government to repatriate citizens from Guantanamo Bay ("any decision to ask for Mr. Khadr’s return to Canada is a decision for the democratically elected government of Canada and not for the courts.”) They prorogue Parliament rather than satisfy a Parliamentary Order requiring them as a government to produce documents. Yet when they go to court to obtain a very self-interested and politically motivated judgment, their positioning changes. They might have more credibility if their dealings weren't so clearly opportunistic. When it comes to legal orders, one can certainly make the case that it's political self-interest which dictates whether the Conservatives will respect them.

As for the policy implications here, the issue of party financing and the Elections Act regime in relation to spending is an issue that it might be smart for opposition parties to get in front of or at least prepare their positions on in the event that party public financing proposals come their way in the near future. It's an issue that Steven Fletcher has pushed and it has not disappeared from the government's agenda. This court case is a reminder of how intently the Conservatives are pursuing the issue and they're unlikely to relent. (As an aside, they seem to be assuming they'll always be in a position of strength in fundraising and are attempting to change the rules accordingly. It may not always be so.)

Secondly, it is worth wondering what the larger Conservative philosophy is on GST rebates for non-profit organizations. Any other non-profits/charitable entities in similar situations to political parties with respect to any perceived "double dipping" might be in similar jeopardy. Will the Conservatives be eyeing them too?

See also: Pundits Guide for preliminary (and future) analysis on the issues raised by the case.

(h/t HarperBizarro)