The federal Conservatives have won a court victory over Elections Canada in a case that saw Mounties raid Tory party headquarters over $1.2 million in contested advertising expenses during the 2006 federal election.
Federal Court Judge Luc Martineau yesterday rejected claims by Elections Canada that advertising expenses attributed to Tory candidates should have been reported as expenses for the national Conservative campaign.
The ruling means Elections Canada will have to reimburse 67 candidates for thousands of dollars each in campaign expenses.
It also means the Conservative party has dodged the prospect of having illegally exceeded its campaign spending limit by more than $1 million.
Still, Martineau questioned the “legitimacy” of the so-called “in and out” advertising scheme because of the effect it could have on the fairness of electoral spending law.
And the opposition said the court ruling will not end the controversy.
The Liberals argued Martineau restricted his ruling to technical aspects of the scheme. And they noted that he said a separate and ongoing investigation by the federal election commissioner will decide if election laws were violated.
“In no way is this settled,” said Liberal MP Marlene Jennings.
She said Martineau merely ruled that Elections Canada must certify that the expenses of 67 Conservative candidates qualify for a 60% rebate under federal election law.
New Democrats said the ruling has revealed a loophole in the Canada Elections Act that will allow parties with large campaign war chests to divert cash to local campaigns and avoid national spending limits.
Nonetheless, the decision was a major victory for the Conservative party.
Conservative MP Pierre Poilievre called it a “devastating blow” to Elections Canada and a “total vindication” for the party, claiming Elections Canada has wasted more than $1 million on its parallel investigation into the advertising.
Under the in-and-out scheme, party campaign headquarters transferred money to local candidates, which was immediately sent back to the national party to pay for campaign advertising. The ads were primarily national in nature, featuring Prime Minister Stephen Harper, then opposition leader, but were claimed as local expenses by the candidates.
In April 2007, Chief Electoral Officer Marc Mayrand ruled the candidates could not claim the advertising expenses because the ads did little to promote individual candidates and the cost had actually been incurred by the federal party.
But in his ruling Monday, Martineau cited Elections Canada handbooks and rules that contradict the election agency’s claim that advertising must be limited to promoting or opposing the election of a candidate. Moreover, he said evidence in the lengthy case showed the candidates themselves incurred the expenses even though the plan was managed by the party.
Martineau said election law allows the kind of financial transfers the Conservative party organized for its candidates, and also allows the candidates to then use the money to pay the party for advertising.
Past practice and the Canada Elections Act provisions show “it is not illegal for a party to incur expenses on behalf of a candidate and then bill a candidate for those expenses. Similarly, it is not illegal for a party to acquire goods or services and then resell them to a candidate.”
Martineau, however, expressed reservations about the system, and hinted Parliament should consider changes to the Elections Act.
“There is a fundamental distinction between legality and legitimacy,” he said. “As far as the overall legitimacy of the… program is concerned, this is a debatable issue, which is better left for public commentary and debate by all interested persons outside the courts.”
