Changes to the electoral and political financing processes in New Brunswick

Transcription

1 Changes to the electoral and political financing processes in New Brunswick A Discussion Paper Part 2 Prepared by Elections New Brunswick September 2012

2 Message from the Chief Electoral Officer and Supervisor of Political Financing To the registered political parties in New Brunswick: In November of 2011, Elections New Brunswick made a broad appeal to the various participants and stakeholders in the electoral and political financing processes. We sought input from current Members of the Legislative Assembly, official agents of candidates, officers of registered political parties, officers of registered district associations, and other interested persons associated with these stakeholders. We asked them to identify areas in these processes which they believed needed improvement. The responses received from this appeal have been combined with ideas accumulated by Elections New Brunswick in recent years. As a result, a large number of issues have been identified that could have a significant impact on the electoral and political processes. To best manage the discussion process over the next few months, we have decided to present a Discussion Paper in two Parts: Part 1 includes issues of immediate concern to registered district associations. These issues will require legislative changes to be passed by June, Part 2 includes issues of electoral process, electoral financial activities, and administration. These issues will require legislative changes to be passed by December, I would now ask that each registered political party review this Discussion Paper Part 2, consider the issues and proposals presented, and prepare feedback for consideration by Elections New Brunswick. This feedback should be given to each party s respective members of our two advisory committees. The Elections Act establishes an advisory committee on the electoral process and the Political Process Financing Act establishes an advisory committee on the financing of the political process. Qualifying political parties are currently represented by the following members: Qualifying political party Progressive Conservative Party of New Brunswick Liberal Party New Democratic Party Parti Vert N.B. Green Party Advisory Committee on the Electoral Process Mr. Bruce Hatfield, Fredericton Mr. Mathieu Picard, Dieppe Mr. Léopold Mallet, Fredericton Mr. Dan Leger, Fredericton Mr. Dominic Cardy, Fredericton Mr. Leigh Sprague, Fredericton Mr. Filip Vanicek, Fredericton Ms. Stephanie Coburn, Head of Millstream Advisory Committee on the Financing of the Political Process Mr. Roy Therrien, Saint Basile Mr. Darrell Stephenson, Rothesay Mr. Britt Dysart, Fredericton Mr. Linden Fenety, New Maryland Mr. Dominic Cardy, Fredericton Mr. Stephen Beam, Fredericton Ms. Greta Doucet, Moncton Mr. James O Rourke, Belledune I would ask that each registered political party please provide its feedback on these matters to its respective committee members no later than January 11, Following this date, I intend to call a meeting with the members of both of the advisory committees to receive their advice and opinions on 1

3 the issues presented in the Discussion Paper Part 2. This guidance will help shape and improve the future of elections and political financing in New Brunswick for many years to come. Michael P. Quinn, Chief Electoral Officer and Supervisor of Political Financing 2

4 Executive Summary This document, the Discussion Paper Part 2, presents the remainder of stakeholders suggestions and other ideas compiled by Elections New Brunswick for discussion. In Chapter 1, we propose renaming the financial offices of political parties and district associations. We propose developing a web based Registry of Political Parties, a system that would serve the needs of Elections New Brunswick, the political parties, and the general public. In Chapter 2, we discuss possible changes to the New Brunswick Political Tax Credit. We propose changes to the dates by which financial returns for political parties and district associations must be submitted. Finally, we propose measures to increase compliance with the Political Process Financing Act and to strengthen the enforcement powers of the Supervisor of Political Financing. In Chapter 3, we discuss the impact on election expenses of fixed date elections. We propose that adjustments be made to electoral spending limits and the reimbursement of election expenses. We also propose changing the definition of election advertising as a matter of fairness for third parties engaging in the electoral process. In Chapter 4, we discuss potential changes in the electoral process, including having a competitive process for hiring returning officers, cutting costs by reducing the number of returning officers and returning offices, clarifying the voting requirements of students, clarifying restrictions on advertising, addressing special voting situations, and revising procedures for recounts. In Chapter 5, we note editorial changes needed in legislation. Finally, several Appendices provide background information for the reader. 3

5 Table of Contents Message from the Chief Electoral Officer and Supervisor of Political Financing... 1 Executive Summary... 3 Table of Contents Stakeholders in the provincial political process Definitions of political entities Financial offices of political entities Modernize Elections New Brunswick s registries of political entities Advisory Committees N.B. Political Tax Credit and financial reporting N.B. Political Contributions Tax Credit Financial Reporting Compliance and enforcement Election expenses and electoral financial activities Election expenses Spending limits on election expenses Election expenses reimbursement Banking Candidate s personal expenses Electoral Financial Return for Candidate Advertising identification Death of a candidate MLA s constituency office Third parties Training required Electoral processes Returning officers and staffing Training Registry of electors Residency Candidates Advertising Voting Recounts Editorial changes Elections Act Political Process Financing Act Appendix A: Financial officials for political entities in Canadian jurisdictions Appendix B: Compendium of Election Administration in Canada Compendium Table G.1: Public funding and reimbursement Appendix C: Legislation regarding the appointment of returning officers

6 Appendix D: Legislation regarding access to multiple residence buildings Appendix E: Legislation regarding ordinary residence of incarcerated electors Appendix F: Legislation regarding ordinary residence of students Appendix G: Legislation regarding candidacy for multiple parties or multiple electoral districts Appendix H: Chief Electoral Officer Directives for Voting Procedures in an Advance Polling Station for the By election to be held <<date>> Appendix I: List of Respondents Table of Figures Figure 1: Stakeholders in the provincial political system... 6 Figure 2: Financial offices of political entities... 9 Figure 3: Inter entity transfers during an election Figure 4: Rates for election expenses limits Figure 5: Proportion of election expenses reimbursed

7 1 Stakeholders in the provincial political process The major stakeholders in the provincial political process in New Brunswick are identified in the following figure: Figure 1: Stakeholders in the provincial political system The political entities include political parties, district associations, and candidates. Political parties and district associations are unincorporated associations of persons that are registered with the Chief Electoral Officer, allowing them to solicit and receive contributions, incur election and non election expenses, and promote the election of candidates to the Legislative Assembly. Since 2010, third parties are also governed during the provincial electoral process. The Chief Electoral Officer serves as the Supervisor of Political Financing (the Supervisor ). (During quadrennial elections held to elect members of municipal councils, district education councils, and 6

8 regional health authorities, the Chief Electoral Officer also serves as the Municipal Electoral Officer. Quadrennial elections, however, are not included within the scope of this Discussion Paper.) 1.1 Definitions of political entities The following definitions are currently found in the Elections Act: district association means an association of persons supporting a political party in an electoral district; "registered district association means a district association that has been registered pursuant to section 135; "registered political party" means a political party that has been registered pursuant to section 133; recognized party means any registered party that at a general election has, or at the general election preceding a by election had, not less than ten candidates officially nominated. We propose that the following editorial changes should be made to clarify these definitions: 1. In the definition of recognized party, the term registered party should be replaced with the term registered political party. 2. Elsewhere in the Elections Act, the term "party" is used without an appropriate adjective. We propose that the following adjectives be added to the legislation: 41 Before each of the advance and ordinary polling days, the returning officer shall provide one copy of the revised list of electors for each polling division in the electoral district to the following: o o (a) the appropriate poll officials; and (b) each recognized party and candidate who was provided with a copy of the preliminary lists of electors under subsection 20(3). 57(2) Within five days after the poll has been granted, the Chief Electoral Officer shall publish a notice of grant of poll in at least one newspaper circulated in each electoral district indicating o (a) the names, addresses, occupations, and the recognized party designations of the candidates in the order in which their names are to be placed on the ballot papers; 130 The Chief Electoral Officer shall maintain a registry of registered political parties, registered district associations and registered independent candidates setting out the information required to be filed with him under sections 134, 136, 144 and (3) Each registered district association shall, within twenty days after the association becomes registered, file with the Chief Electoral Officer a notice signed by the leader of the registered political party associated therewith, or the official representative of such party, setting out the name and address of its official representative. 7

9 140 The Chief Electoral Officer shall cancel the registration of a political party registered pursuant to paragraph 131(d) if such party does not present candidates in at least ten electoral districts, or whose number of candidates falls below ten before the day of polling, in any general election. 3. In the Political Process Financing Act, the following adjectives should be inserted in front of the word party : 67(1) In this Act election expenses means all expenditures incurred during an election period for the purpose of promoting or opposing directly or indirectly, the election of a candidate or that of the candidates of a registered political party, including every person who subsequently becomes or who is likely to become a candidate, and includes all expenditures incurred before an election period for literature, objects or materials of an advertising nature used during the election period for such purposes. 74(1) A chief agent and an official agent may each designate a publicity agency for his registered political party or candidate by a writing signed by him and filed with the office of the Supervisor setting out the name and address of the agency. 4. Subsection 1(2) of the Political Process Financing Act should include "political party in its list of terms having the same meaning as in the Elections Act. Question: Do you have any comments on this proposal? 1.2 Financial offices of political entities Under the Elections Act, a number of offices must be filled for political parties, district associations, and candidates. The titles of these offices and their respective financial roles are summarized below: 8

10 Figure 2: Financial offices of political entities Political entity Solicits contributions, obtains financing, and incurs nonelection expenditures Incurs election expenses Registered political party Official representative Chief Agent and Electoral district agent Registered district association Official representative Not applicable Official candidate of a party Not applicable Official agent Registered independent candidate Official representative Official agent Confusion over titles of financial offices Throughout the course of our mandate and, in particular, during the 2010 general election, we observed a high level of confusion and misunderstanding among the participants in the political system as to what the financial offices, as noted above, and their respective financial duties entail. We have observed that: Official representative is not an intuitive term for most participants. It does not capture the essence of the financial responsibilities of the office. It must be learned as part of the electoral vocabulary. Official agent is generally understood to be the office responsible for the election expenses of a candidate. This understanding may be a result of the Canada Elections Act using this same term in the federal electoral system. Chief agent is not usually remembered as the counterpart at the level of a political party to official agent. The office of electoral district agent is generally not understood. The Elections Act says, 138(6) Only one chief agent shall be registered for each registered political party at any one time and only one official agent shall be registered for any registered independent candidate at any one time. 138(7) Notwithstanding subsection (6), the chief agent of a registered political party may, on the written authorization of the leader of that party, appoint at any time not more than one electoral district agent for that party for each electoral district and file the name and address of such appointment with the Chief Electoral Officer. 9

11 The Political Process Financing Act goes on to say that, 69(1) Every candidate at an election shall have an official agent. 69(2) Notwithstanding subsection (1) but subject to subsection (6), the electoral district agent, if any, of a registered political party for a particular electoral district shall be the official agent of the official candidate of that party in that district. 69(6) Notwithstanding the Elections Act, a candidate may, during an election period, dismiss his official agent and appoint another by a writing signed by him and filed with the Chief Electoral Officer. In practice, although appointed legally as an electoral district agent, the chief agent is really appointing an official agent for their candidate in that electoral district. The candidate then effectively confirms this appointment when they designate their official agent on their Nomination Paper. We reviewed the titles used for these roles across the Canadian jurisdictions and found a wide variety of terms and application thereof. In addition to the terms used in New Brunswick, others used include chief financial officer, financial agent, and business manager. Interestingly, the majority of provinces use the same term whether applied to a political party, an electoral district association, or a candidate; e.g. Newfoundland and Labrador, Prince Edward Island, Nova Scotia, Ontario, Alberta, and British Columbia. Our analysis is presented in Appendix A: Financial officials for political entities in Canadian jurisdictions. We propose for discussion changing all of the offices noted in the table above to financial agent. This is the term used in British Columbia. We believe this change would work well for the following reasons: The title accurately and clearly describes the function of each office; i.e. to represent a political entity in financial matters. While the Political Process Financing Act provides for a division of financial responsibilities between the official representative and chief agent of a political party, we believe that it makes more sense for one official to be ultimately responsible for all financial matters of the party. For larger parties, the financial agent could simply delegate the responsibility for incurring (and managing) election expenses to another individual. Authorization of another person for incurring election expenses is already contemplated by section 70 of the Act. For smaller parties, the official representative and chief agent are usually filled by the same person anyway. The concept behind the electoral district agent works equally well with the office simply being renamed as financial agent. 10

12 The responsibilities of the official representative of a registered district association would not change. The office would simply be renamed as financial agent of a registered district association. The current responsibilities of the official agent of a candidate would not change. The office would simply be renamed as financial agent of a candidate. The responsibilities of the official representative and official agent of a registered independent candidate would be combined under one office of financial agent. This reflects the normal arrangement seen for independent candidates in recent elections. Question: Do you have any comments on this proposal? Other agents of a candidate The Elections Act also makes reference to other agents of a candidate. These references may possibly be confused with the previously discussed terms of official agent and electoral district agent. The references are: 51(4) The nomination paper of a candidate shall designate the name of an agent to whom copies of the lists of electors are to be provided under subsection 20(3) and who may appoint a scrutineer to act at the polls under section (3) At the close of the time for nominating the candidates the returning officer shall deliver to every candidate, or the agent of a candidate applying therefor, a certified list of the names of the candidates who have been nominated. 61(10) At least 2 days before the ordinary polling day, the returning officer shall post in each of his or her offices a list of the names and addresses of the poll officials, showing the polling station for which each of them is appointed, and shall permit, up to the opening of the poll, free access to and afford full opportunity for inspection of the list by a candidate, agent or elector during normal operating hours (3) Despite section 72, only the following persons may accompany a polling station as it moves from room to room in a treatment centre: (a) the special voting officers; (b) the returning officer or an election clerk; (c) a staff member of the centre; and (d) a candidate, his or her official agent and a scrutineer. 106(1) Every person who 11

13 (f) directly or indirectly by himself or by any other person on his behalf on account of and as payment for voting or for his having voted or for illegally agreeing or having agreed to vote for any candidate at an election, or account of and as payment for his having illegally assisted or agreed to assist a candidate at an election, applied to such candidate or to his agent or agents, for the gift or loan of any money or valuable consideration, or for the promise of the gift or loan of any money or valuable consideration or for any office, place of employment, or for the promise of any office, place or employment; A candidate, agent or representative of a candidate, or representative of a political party with which a candidate is affiliated, who, at any time prior to or on polling day, knowingly causes incorrect information to be given to an elector respecting the polling station where that elector may vote is guilty of an illegal practice. While we do not see a pressing need to assign another distinguishing adjective in these instances, we offer the reader the opportunity to comment if they have found the legislation to be confusing. Question: Do you have any comments concerning the other agents of a candidate? We believe that use of the term official agent in paragraph 87.53(3)(d), as noted above, is an error. We propose that the word official be removed. Question: Do you have any comments concerning this proposal? 1.3 Modernize Elections New Brunswick s registries of political entities Under the Elections Act and the Political Process Financing Act, Elections New Brunswick must maintain registries of: Political parties; District associations; Official representatives; Chief agents/electoral district agents/official agents; and Third parties. These registries are available for public examination, they are posted on the website of Elections New Brunswick, and all changes to them are published in the Royal Gazette. Maintaining these registries is currently a completely manual process. The Leader, official representative or chief agent, as the case may be, of each registered political party must submit signed documentation for update by staff at Elections New Brunswick. Due to the manual nature of the 12

14 process, the registries are frequently not up to date. The bottlenecks in the system come to light particularly as a general election approaches and the official agents are appointed. The bottlenecks are also problematic in January of each year when the official representatives must be updated as part of the annual financial reporting process. An automated, web based registry system could be developed that would make the registration and updating process much easier for registered political parties, registered district associations, and candidates. They could enter update information directly into the system, the changes would be approved electronically by the appropriate officer of the political party, and the changes would be accepted and the registries updated by Elections New Brunswick. The system would be accessible for public examination at any time. Financial institutions, for example, would be able to validate the names of official agents wishing to open electoral bank accounts. We see value in developing an efficient, web based application for maintaining the registries of political entities. Question: Do you have any comments on this discussion point? 1.4 Advisory Committees Frequency of appointments of committee members The representatives serving on the Advisory Committee on the electoral process and the Advisory Committee on the financing of the political process must be designated by qualifying registered political parties within 15 days of commencement day of each session of the Legislative Assembly. They continue serving until 15 days following commencement of the next ensuing session. Since each session typically lasts one year, this is an annual process. Usually, the representatives are re appointed without change. One respondent recommended that the appointments occur within 15 days following commencement day of each Legislative Assembly; i.e. only once following each general election. The Leader of a registered political party would still be able to make changes as required. We believe it would be advisable to appoint representatives on the advisory committees following each general election rather than following each session of the Legislative Assembly. Question: Do you agree with this proposal? Merging functions of advisory committees When discussing changes to either Act, there is often an overlap of discussion points. For example, the placement of political signs near polling stations is restricted under the Elections Act. However, the rules 13

15 as to the information required on each sign, the amount of money that can be spent on advertising, and the times when such signs may be placed are detailed in the Political Process Financing Act. One respondent requested that changes to financial returns and changes in interpretations of the legislation from those of previous Supervisors always be brought before the Advisory Committee on the financing of the political process. Questions: 1. Would it be beneficial to merge the functions of the Advisory Committees? 2. If merged into one committee, would there be more than two representatives from each political party appointed? 3. If not merged, is there any objection to holding simultaneous meetings of the two Advisory Committees where the topics of discussion warrant? 14

16 2 N.B. Political Tax Credit and financial reporting In this chapter, we will discuss issues relating to the New Brunswick Political Tax Credit and the financial reporting obligations of registered political parties and registered district associations. 2.1 N.B. Political Contributions Tax Credit We would like to discuss whether there is any desire to increase the New Brunswick Political Contributions Tax Credit. Under the New Brunswick Income Tax Act, the tax credit is currently a maximum of $500 annually: 61(2)There may be deducted from the tax otherwise payable under this Part by a taxpayer who is an individual or a corporation for a taxation year in respect of the aggregate of all amounts, each of which is the amount of a contribution of money made by the taxpayer in a year to a registered political party, a registered district association or a registered independent candidate, (a)75% of the aggregate if the aggregate does not exceed $200, (b)$150 plus 50% of the amount by which the aggregate exceeds $200 if the aggregate exceeds $200 and does not exceed $550, or (c)the lesser of (i)$325 plus 33 1/3 of the amount by which the aggregate exceeds $550 if the aggregate exceeds $550, and (ii)$500, if each contribution that is included in the aggregate is proven by filing with the Minister a receipt signed by the official representative of the registered political party, registered district association or registered independent candidate, as the case may be. In Appendix B: Compendium of Election Administration in Canada, Compendium Table G.1: Public funding and reimbursement, we see that Canada provides a tax credit of up to $650 while Ontario and Alberta have a tax credit of up to $1,000 adjusted for inflation. In the 2005 Government s Response to the Commission on Legislative Democracy, the government pledged to match the federal level of tax credit of $650. Question: Is there a desire to increase the value of the New Brunswick Political Contributions Tax Credit? 15

17 2.2 Financial Reporting Financial reporting by registered political parties and registered district associations is a fundamental principle upon which the Political Process Financing Act was established. Preparing financial returns that are available for inspection by the public provides a key element of disclosure and accountability for the political system in New Brunswick. There are, however, several issues that should be discussed relating to these processes Due dates for political parties to file semi annual financial returns The financial return for a registered political party for the period ending December 31 must be submitted no later than April 1 of the following calendar year. The financial return for the six month period ending June 30 must be submitted no later than October 1 of the same calendar year. Historically, there are several problems with the April 1 reporting deadline: First, there is usually much work required between the political party and its district associations to ensure that all contributions received in the calendar year are forwarded to the party for the purposes of recording the contributions and issuing receipts. There are significant accruals to be made to record the contribution revenues and the offsetting transfers owed back to the district associations. Second, district associations have traditionally failed to meet their financial reporting deadline of April 1. That means it is often impossible for the political party to reconcile its transfer accounts with its district associations financial returns. Third, this submission deadline falls right in the middle of income tax season for public accountants. This means that is often difficult for the accountants to provide sufficient resources to complete the audit on time. With the changes proposed in the Discussion Paper Part 1 to simplify the administration of the political financing system, the first two problems should be adequately addressed for those district associations which adopt the new system; however, the third problem would remain. Therefore, we propose that the filing date for political parties be changed from April 1 to May 31. This would allow an additional two months to complete the audit. This deadline is one month past the federal income tax deadline of April 30 and should better accommodate the demands on resources of the accounting firms. We also propose changing the filing date for the period ending June 30 from October 1 to September 30. This would better reflect the three month window within which a political party must file this semiannual financial return. Question: Do you have any comments on these proposals? 16

18 2.2.2 Audit Fee Reimbursement It is in the public interest that audits be performed on the financial returns of the political parties. Accordingly, the Act has always provided a reimbursement of actual auditing fees of up to $2,000 per calendar year. The actual auditing costs for 2011 were: PCNB, $11,865; NBLA, $8,075; NBNDP, $9,600; PVNBGP, $1,410; and PANB, $3,615. Obviously, the costs are significantly greater than the reimbursement available. They reflect the complex nature of the transactions within a political party and increased professional auditing standards introduced in recent years. The reimbursement amount, if adjusted for inflation, would be $7,000 annually (see Discussion Paper Part 1, Appendix A: Proposed adjustments for inflation). Take note that the formula for payments to political parties was changed in 2009 so that both the audit fee reimbursements and the annual allowances are paid from the same appropriation of the Legislative Assembly. The audit fee reimbursements are paid first under the calculation; therefore, any increase in the audit fee reimbursement amount would reduce the remaining funds available for payment of the annual allowances to the political parties. Question: Is there a desire to increase the audit fee reimbursement amount to adjust for inflation and to better reflect current costs for professional auditing services? Financial reporting by registered district associations As discussed in the Discussion Paper Part 1, Chapter 2, there is an historic, chronic failure by official representatives of registered district associations to file their annual financial returns by the date required. That is why we proposed in Part 1 a significantly simpler process of financial reporting for district associations. In addition, there are some further issues to discuss relating to this matter of financial reporting Due date The date by which the annual financial returns must be submitted is currently April 1. Since April is the month associated with preparing personal income tax returns (and the deadline is April 30), we propose a revised due date for the annual financial returns of March 31. This date would more clearly reflect the three month period of time within which official representatives must file their returns. Hopefully, they would begin working on their returns effectively one month earlier. This should help to increase the level of compliance. Question: Do you have any comments on this proposal? Sanctions for late filing The sanctions available under legislation for failure to file the financial returns of registered district associations on time include: 17

19 prosecution as an offence under the Political Process Financing Act; acceptance of a sum of $50 per day that the official representative is in default of filing the return; and cancellation of the registration of the district association under the Elections Act. It would appear that reluctance to impose any sanctions has only allowed the problem to continue indefinitely; therefore, a culture needs to be established whereby official representatives will take their reporting responsibilities much more seriously. In the 2007 Government s Response to the Final Report of the Commission on Legislative Democracy, it was proposed that Elections New Brunswick hold back a political party's quarterly annual allowance payments until all current and outstanding financial returns for the party s district associations and the political party itself are filed. If financial returns for the district associations are filed by the (revised) due date of March 31, there would be no delay in the party receiving its quarterly payment for the quarter beginning April 1. The same process of withholding quarterly payments would apply if the political party is delinquent in filing its own financial returns. This proposal does not impose any penalty under the Act. Rather, it leverages the payment of quarterly allowances to pressure the political parties into ensuring the district associations file their returns on time. It is a very efficient model that should be very effective in increasing compliance. Question: Do you have any comments on this proposal? Examination procedures of the Supervisor One respondent requested that the Supervisor acknowledge completion of the examination of each district association s financial return by communicating with the official representative. While this practice was done in the past by letter or by , it has been discontinued as a matter of efficiency. However, as proposed in the Discussion Paper Part 1, with the transactions of each district association being included in the audited financial return of the political party, any official representative would be able to find their final audited financial results posted on the website of Elections New Brunswick, as described in the following section. As a point of interest, it is the goal of the Supervisor to publish the Annual Report of the Supervisor of Political Financing within one year of the filing deadline of the registered district associations. This goal can only be achieved, however, if the political parties and district associations comply with their financial reporting obligations under the Political Process Financing Act. 18

20 2.2.4 Public examination of financial returns For financial returns of registered political parties and registered district associations, the Political Process Financing Act provides that: 63(1) Financial returns and the receipts, invoices and other vouchers submitted to the Supervisor shall be available for public inspection not later than ninety days after receipt thereof by the Supervisor Reduction in review period for public examination The period of 90 days was increased from 30 days in While the intent of this increase was to provide the Supervisor with additional time to review the financial returns and prepare them for public examination, the effect has really been a de facto extension of the filing deadline for political parties. Parties are able to file their financial returns later than the due date and yet escape public scrutiny of this delay. For the public, this means that they only get to see the financial returns, including the lists of contributions, six months after the end of the semi annual reporting periods. We propose that the review period in subsection 63(1) be reduced from 90 days to 30 days. Combined with our previous proposal to change the filing deadlines for political parties to May 31 and September 30, the end result is that the public would have access to the financial returns by June 30 and October 30. This effectively represents no change for the public for the spring reporting but two months earlier for the autumn reporting. With the current staff at Elections New Brunswick, there should be no difficulty in preparing financial returns for public examination within this reduced time period. Question: Do you have any comments on this proposal? Posting on Elections New Brunswick s website As noted above, subsection 63(1) of the Act speaks of financial returns of political parties and district associations being available for public inspection. Also, for electoral financial returns of political parties and candidates, subsections 81(3) and 82(3) provide that the Supervisor shall, during ordinary office hours, permit any person to examine the returns and make copies thereof. While physical examination is available, we frequently receive requests for access to this information by electronic means. In general, participants in the political system and members of the public expect that this financial information would be available on the website of Elections New Brunswick, as is the case with almost all other Canadian jurisdictions. The Supervisor recently consulted with the Access to Information and Privacy Commissioner for the Province of New Brunswick as to whether there would be any privacy issues with respect to posting the financial returns, in their current format, on our website. In summary, the Commissioner advised that: The Right to Information and Protection of Privacy Act does not apply to records made for an officer of the Legislative Assembly, of which the Supervisor of Political Financing is one; 19

21 On line access to publicly available information is, nonetheless, increasingly becoming the norm in the public sector; The elements of the financial returns should be reviewed to determine which are truly required to be available for public examination; Redact sensitive elements prior to posting on line or move to a separate page that would not be made publicly available; e.g. signatures; and Provide notice on the financial returns that the information will be made publicly available on the website of Elections New Brunswick. We propose that these recommendations be implemented and that financial returns be made available on the website of Elections New Brunswick. Question: Do you have any comments on this proposal? Several members of the public have requested that details of contributions to political parties be made accessible in electronic format and posted on our website. In Ontario, for example, such information is provided in an electronically accessible format. It is also provided on a real time basis; i.e. within ten days of the contribution being deposited. We propose that details of contributions, as currently reported in the financial returns of political parties, be submitted to the Supervisor in electronic spreadsheet format concurrently with each party s financial return. The Supervisor would post both the financial return and the contributions spreadsheet on Elections New Brunswick s website. We are not proposing real time reporting at this point in time. Question: Do you have any comments on this proposal? 2.3 Compliance and enforcement To improve the level of compliance with the Political Process Financing Act, and to allow for effective enforcement of the Act by the Supervisor, one method would be to give the Supervisor powers similar to those of the Commissioner of Canada Elections under the Canada Elections Act. Elections Canada advises that: In addition to the power to refer matters for possible prosecution to the Director of Public Prosecutions, the Commissioner may also apply for injunctions and enter into compliance agreements to ensure compliance with the Act. In an effort to educate and to promote compliance with the Act, the Commissioner may issue a formal caution to a person who may have committed an offence under the Act. 20

22 During an election period, the Commissioner may apply to a competent court for an injunction if the Commissioner has reasonable grounds to believe that a person has committed, is about to commit or is likely to commit an act or omission that is contrary to the Act. The court may order any person to refrain from committing any act that appears to the court to be contrary to the law, or to perform any act that appears to the court to be required by the law. The Commissioner may also enter into a compliance agreement with any person to ensure compliance with the Act. The Commissioner may enter into a compliance agreement if he or she believes on reasonable grounds that a person has committed, is about to commit or is likely to commit an act or omission that is contrary to the Act. A compliance agreement may contain any terms or conditions that the Commissioner considers necessary to ensure compliance with the Act 1. The authority to enter into a compliance agreement would be useful, for example, as a first step to try to have delinquent financial returns filed. If the compliance agreement were not respected, then the Supervisor would likely proceed with prosecution. As we shall see in the following chapter, such powers would also be useful during a general election to quickly enforce the law with respect to advertising, registration of third parties, etc. Question: Do you have any comments on this idea? 1 Election Handbook for Candidates, Their Official Agents and Auditors, Elections Canada (ED 20109), March

23 3 Election expenses and electoral financial activities The financial activities related to a general election (or a by election) are complex given the number of inter entity transfers of funds that occur in the process of an electoral event. As previously presented in the Discussion Paper Part 1, these transactions are documented visually in the following figure: Figure 3: Inter-entity transfers during an election The following issues are discussed in this chapter: Election expenses; Spending limits on election expenses; Election expenses reimbursement; Banking; Candidate s personal expenses; 22

24 Electoral Financial Return for Candidate; Advertising identification; Death of a candidate; MLA s constituency office; Third parties; and Training required. 3.1 Election expenses A number of issues related to election expenses are discussed below Response to fixed date elections With the introduction of fixed date elections in New Brunswick in 2010, it became evident that the political strategies for the election would change significantly from those of previous general elections. Accordingly, the Supervisor issued seven guidelines or directives throughout that year to address many of the questions that arose in anticipation of, and during the course of, the electoral campaign. These questions included matters relating to advertising by candidates, expenditures made prior to the writ of election, development of websites, etc. The guidelines and the date they were issued were: Election Advertising Guidelines ( ); Campaign Activities Prior to August 26, 2010 ( ) Signs Used in Previous Election Campaigns ( ) Starting Time of the 2010 Election Period ( ); Campaign Signs, Buses, and Other Vehicles ( ); Vandalized, Stolen, or Destroyed Advertising Material ( ); and Facebook and Twitter ( ). If the reader would like to refresh his or her memory on the issues addressed in these guidelines, they are available on the Elections New Brunswick website at the following address: e.asp Problem areas observed in 2010 As a result of implementing the guidelines noted above, we observed a number of areas that seemed to be problematic for participants in the electoral campaign. These areas are discussed below Pre writ advertising With the introduction of a fixed date election, many candidates were nominated months ahead of the election period. These candidates wished to advertise when they canvassed door to door, attended barbeques, etc. throughout the summer months leading up to the election period. 23

25 Under the Political Process Financing Act, they were permitted to advertise prior to the issue of the writs of election only by use of their registered district association s annual advertising limit of $2,000. The procedures were complicated and involved the official representative of the district association authorizing the advertising expenditure, paying for it from the association s bank account and then being reimbursed by the official agent of the candidate, changing the disclosure tag line for pre and post writ use of the same advertisement, etc. The other benefit was that the $2,000 in advertising would not be included in the election expenses of the candidate and subject to the spending limit established under the Act for the candidate. Following the election, we were told that this issue demanded far too much attention and energy from the campaign teams. It was simply too complicated to implement. Further, had this $2,000 been treated as an election expense, it would not have proven problematic for the majority of campaigns which easily had this much room left under their election spending limit Prorating of expenditures Prorating of expenditures referred to the allocating of certain expenditures into election expenses and non election expenses based on the number of days of the election period as a proportion of the total number of days covered by the expenditure. The best example of this proration was for rental costs for a campaign office. Assuming an office was rented for the months of August and September, the guidelines directed that the rental cost be prorated based on the number of days and treated as follows: August 1 25: pre writ, non election expenses; August 26 September 27: election expenses for the election period; and September 28 30: post election, non election expenses. In practice, this calculation proved to be very cumbersome for many official agents and was ignored by most. Instead, most official agents instinctively reported the entire rental cost as election expenses. Another type of expenditure subject to proration was the telephone bill. Upon close review of these monthly bills, it became apparent that allocating costs based on the number of days that were pre and post writ or post election was not an appropriate method of proration. This was especially true for the first bill where significant costs were incurred for the installation of phone lines and internet access in the campaign office. In many cases, the official agent simply reported the entire amount as election expenses Other set up costs In addition to the telephone installation costs, other costs frequently incurred prior to the election period to set up the campaign office included purchasing Get out the Vote software; setting up the candidate s website; and purchasing a computer, printer/fax/copier, and office supplies. While the Political Process Financing Act allows these costs not to be included in election expenses as long as they 24

26 were incurred prior to the election period, most official agents instinctively included them as election expenses Post election costs Some costs continue past Election Day, such as rent and telephone. A few other new costs may also be incurred, such as travel costs to take down election signs. Most official agents instinctively reported the post election portion of these expenditures as election expenses, notwithstanding that they did not have to do so under the guidelines Simplified rules for election expenses We believe it would be advantageous for all participants in the electoral process if these problem areas were addressed by a set of rules that were simple and instinctive to the participants. Based on our experience and observation, it seems that most people can reasonably determine when an expenditure is made for the purpose of electing a candidate and, therefore, should be treated as an election expense. Question: What suggestions would you have to simplify the rules for election expenses? Advertising With regards to when full election advertising may be circulated, the Chief Electoral Officer issued the following directive on August 5, 2010: I have been requested to issue a directive concerning the commencement time of the 2010 General Election, in order to avoid different interpretations and any resulting confusion. The official starting time of the provincial general election of September 27, 2010, shall be at 12:01 AM, Thursday, August 26, At that time, all 55 Writs of Election shall be deemed to be issued. All election advertising, including the posting of signs, publication or broadcasting of election advertisements, use of election buses or vehicles, and other election expenditures, may commence. Despite this directive, a significant number of advertising signs were posted prior to the appointed time, resulting in a frantic race among campaign teams to report the offenders to Elections New Brunswick. Questions: 1. Should the essence of this guideline be provided in the Political Process Financing Act? 2. Should there be an offence associated with violating this provision? Adjustments for inflation One of the existing exemptions from election expenses is for reasonable nominating convention expenses incurred during the election period. Under paragraph 67(4)(e) of the Political Process Financing Act, expenses of up to $1,000 of the candidate selected at the convention are exempted from inclusion in the election expenses of the candidate selected for that electoral district. As shown in the 25