Date: 20080225
Docket: T-755-07
Citation: 2008 FC 246
Ottawa, Ontario,
February 25, 2008
PRESENT:
The Honourable Mr. Justice Harrington
BETWEEN:
ROBERT
KEITH RAE
Applicant
and
THE CHIEF ELECTORAL OFFICER OF
CANADA and
THE FEDERAL LIBERAL AGENCY
OF CANADA
Respondents
REASONS FOR ORDER AND ORDER
[1]
Those who take an interest in the public affairs
of this country know that Robert Keith (“Bob”) Rae ran for the leadership of
the Liberal Party of Canada at its convention held in Montreal in December 2006. They may not know that, strictly speaking, Mr.
Rae is still a leadership contestant as his final financial returns to the
Chief Electoral Officer are only due this coming June.
[2]
In order to offset the costs of the convention, the Liberal
Party imposed a leadership “entry fee” of $50,000 on Mr. Rae and on the other
10 leadership contestants. As it turns out, far more delegates registered than
anticipated, and the convention actually turned a tidy profit.
[3]
The Party resolved to refund the entry fee to Mr. Rae and
to the other leadership contestants, subject to the approval of the Chief
Electoral Officer. However, he takes the position that such a payment from a
political party to a leadership contestant is prohibited by section 404.3 of
the Canada Elections Act. This is a judicial review of that decision.
THE CANADA ELECTIONS ACT
[4]
The Canada Elections Act was amended in 2003 by “An
Act to amend the Canada Elections Act and the Income Tax Act (political financing), S.C. 2003, c. 19. The summary accompanying the legislation states that the
amendments extended disclosure requirements to, among others, party leadership
contests and introduced limits to the contributions that may be made to
parties, candidates, electoral district associations, as well as to leadership
and nomination contestants. The amendments also require leadership contestants
to report contributions received and expenses incurred to the Chief Electoral
Officer.
[5]
Anxious not to run afoul of the new enactments, well before
the convention was held, the Liberal Party opened a dialogue with the Chief
Electoral Officer. One of the many questions it asked was whether it was
entitled to impose an “entry fee” on leadership contestants, something it had
done in the past.
[6]
Jean-Pierre Kingsley, the then Chief Electoral Officer,
responded in the affirmative. It was his opinion that the “entry fee” would
constitute a transfer from the contestant to the Liberal Party as well as a
leadership campaign expense, neither of which were prohibited. Shortly
thereafter, realizing that the “entry fee” could not be two things at once, he
opined that the fee would constitute a transfer and should be reported as such.
In the interim reports required by the Act, both Mr. Rae and the Liberal Party
have treated the $50,000 as a transfer from him to it.
[7]
The word “transfer” is not defined but still has some
special connotations under the Act. A transfer is not a “contribution”.
Contributions carry with them a limit of $1,000. Transfers do not.
[8]
There were basically three ways Mr. Rae and the other
contestants could finance their campaigns. Contributions could be made to them
directly or to the Liberal Party but “designated” to a particular contestant. They
could also borrow. In accordance with the Act, all these activities are transparent
and must be reported, as indeed has been the case. As aforesaid, it was only
after the convention proved to be a financial success that the Party sought the
Chief Electoral Officer’s approval before returning the “entry fee” to Mr. Rae
and the other contestants. His negative opinion was based on subsection
404.3(1) of the Act which provides:
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404.3 (1) No registered party and no electoral district
association of a registered party shall provide goods or services or transfer
funds to a leadership contestant or a nomination contestant, unless the goods
or services are offered equally to all contestants.
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404.3 (1) Il est interdit à un parti enregistré et à
l'association de circonscription d'un parti enregistré de fournir des
produits ou des services ou de céder des fonds à un candidat à la direction
ou à un candidat à l'investiture, sauf si les produits ou les services sont
offerts également à tous les candidats.
|
[9]
It should be noted in passing that the equality provision in this 2003
amendment only modifies the provision of goods or services. It does not apply
to the transfer of funds. Minutes of the Standing Committee on Procedure and House
Affairs indicate that this provision was added to cover the possibility of
goods or services being offered in common, such as by a political party
providing a venue and refreshments at riding nomination meetings or leadership
debates.
[10]
The parties, and the Court, are in agreement that the 2003
amendments do not impose upon the Chief Electoral Officer the obligation of
running leadership conventions. That is a matter for the political parties
themselves. The Liberal Party was under no requirement to impose an “entry fee”
upon leadership contestants. In the alternative, it could have gone about
things differently. For instance, it could have made it a condition of the
campaign that the contestants cover any convention financial shortfall, up to a
cap of $50,000 each. Had it done so, there would have been no transfer of funds
from Mr. Rae to the Liberal Party and so no need to consider whether the refund
to him would constitute a transfer within the meaning of the Act. However, Mr.
Rae and the Liberal Party have to cope with what they did, not with what they
could have done. More to the point, there is no evidence that the Liberal Party
gave thought to a refund before the convention was held.
THE
ISSUES
[11]
As I see it, there are three issues:
a.
Was the opinion of the Chief Electoral Officer a decision
which is subject to judicial review by the Federal Court?
b.
If so, what is the standard of review: correctness,
reasonableness simpliciter or patent unreasonableness?
c.
What is the proper construction to be put on section 404.3
of the Canada Elections Act?
WAS
THERE A DECISION?
[12]
Section 18.1(3)(b) of the Federal Courts Act empowers
the Federal Court on an application for judicial review to:
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declare invalid
or unlawful, or quash, set aside or set aside and refer back for
determination in accordance with such directions as it considers to be
appropriate, prohibit or restrain, a decision, order, act or proceeding of a
federal board, commission or other tribunal.
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déclarer nul ou illégal, ou annuler, ou
infirmer et renvoyer pour jugement conformément aux instructions qu’elle
estime appropriées, ou prohiber ou encore restreindre toute décision,
ordonnance, procédure ou tout autre acte de l’office fédéral.
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[13]
The Chief Electoral Officer is a federal board, commission
or tribunal. If not a “decision”, the opinion was certainly an “act”. As Mr.
Justice O’Reilly put it in Nunavut Tunngavik Inc. v. Canada (Attorney
General), 2004 FC 85, 245 F.T.R. 42 at paragraphs 8 and 9:
[8] This Court
has jurisdiction to review a "decision, order, act or proceeding of a
federal board, commission or other tribunal" acting under powers provided
by an Act of Parliament: Federal Courts Act, R.S.C. 1985, c. F-7, ss. 2,
18.1(3)(b). This role extends beyond formal decisions. It includes review of
"a diverse range of administrative action that does not amount to a
'decision or order', such as subordinate legislation, reports or
recommendations made pursuant to statutory powers, policy statements,
guidelines and operating manuals, or any of the myriad forms that
administrative action may take in the delivery by a statutory agency of a
public programme.": Markevich v. Canada, [1999] 3
F.C. 28 (QL) (T.D.), at para. 11, reversed on other grounds, [2001]
F.C.J. No. 696, reversed on other grounds, [2003]
S.C.J. No. 8.
[9] Still, the administrative action sought to be reviewed must
flow from a statutory power. The decision-maker need not be exercising any
particular statutory authority, but must at least have statutory powers
affecting the rights and interests of others: Markevich, above, at para.
12. […]
[14]
Indeed, the Chief Electoral Officer is not attempting to
escape the superintending power of this Court. He emphasizes that if the
Liberal Party had actually refunded Mr. Rae, he would have decided that the
payment was illegal. I add that rule 64 of the Federal Courts Rules
provides that no proceeding is subject to challenge simply on the ground that
only a declaratory order is sought, and that the Court is entitled to make a
binding declaration of right.
STANDARD
OF REVIEW
[15]
It has been established in countless decisions of the
Supreme Court that judicial review of an administrative decision is approached
pragmatically and functionally (see Pushpanathan v. Canada (Minister of
Citizenship and Immigration), [1998] 1 S.C.R. 982; Dr. Q v. College of
Physicians and Surgeons of British Columbia, 2003 SCC 19, [2003] 1 S.C.R.
226; Law Society of New Brunswick v. Ryan, 2003 SCC 20, [2003] 1 S.C.R.
247; and Voice Construction Ltd. v. Construction and General Workers' Union,
Local 92, 2004 SCC 23, [2004] 1 S.C.R. 609) As mentioned by Chief Justice
McLachlin in Dr. Q at paragraph 26, this approach draws out the
information needed to determine the degree of deference to which the original
decision maker is entitled.
[16]
There are four contextual factors to take into
account under this approach:
a.
The presence or absence of a privative clause
or statutory right of appeal;
b.
The relative expertise of the tribunal compared
with that of the Court;
c.
The purpose of the legislation in general and
the challenged provisions in particular;
d.
And finally, the nature of the question: law,
fact or mixed law and fact.
[17]
The Canada Elections Act contains no privitive
clause or statutory right of appeal.
[18]
The Chief Electoral Officer obviously has more expertise in
supervising the conduct of elections and related matters. Section 16 of the Act
requires him to ensure that all election officers act with fairness and
impartiality and in compliance with the Act. He is vested with all the powers
necessary to perform his duties and functions in administering the Act. Section
17 even gives him, during an election period, if an emergency, an unusual or
unforeseen circumstance or an error makes it necessary, the power to adapt any
provision of the Act. The question remains, however, whether he is owed
deference by the Court in his interpretation of section 404.3.
[19]
The overall purpose of the Canada Elections Act is
to ensure that the democratic right of adult Canadians to vote is properly
respected and that the whole process from riding nominations, to leadership
conventions, to by-elections and general elections, unfolds on a level-playing
field. More particularly, the provisions relating to leadership campaign
expenses are intended to be transparent, to limit the amount of contributions
an individual may make and to prevent party apparatchiks from financially favouring
one leadership contestant over another.
[20]
Finally, two questions remain. Is the proposed payment by the
Liberal Party to Mr. Rae a transfer? If so, is it prohibited by section 404.3
of the Act? In my opinion, the first question is a mixed one of fact and law,
and the second a pure question of law.
[21]
Although Parliament may robe a tribunal with the power to
decide questions of law, including the statutory interpretation of its enabling
legislation (Council of Canadians with Disabilities v. Via Rail Canada Inc.,
2007 SCC 15, [2007] 1 S.C.R. 50), I see nothing in the Act to derogate from the
norm that findings of fact are not disturbed unless patently unreasonable,
mixed questions of fact and law are reviewed on a reasonableness simpliciter
standard, and questions of law as a matter of correctness. The legal issue is
the correct interpretation of section 404.3 of the Canada Elections
Act. The Chief Electoral Officer’s opinion is not entitled to deference
(see: Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, [2005] 1
S.C.R. 533 (Biolyse), particularly at paragraph 36).
[22]
Previous cases dealing with the role of the Chief Electoral
Officer under the Canada Elections Act were considered by Madam Justice
Heneghan in Sinclair v. Conservative Party of Canada, 2004 FC 1628, 2004
F.C.J. No. 1966 (QL). It was not necessary for the purposes of that case to
specifically analyse the pragmatic and functional approach to judicial review
in this context. However her holding that the Chief Electoral Officer’s
findings of fact were unassailable and that he prematurely accepted a merger
application of the Progressive Conservative Party and the Canadian Reform
Conservative Alliance Party contrary to a specific provision of the Act is
consistent with this approach.
ANALYSIS
[23]
As mentioned above, the Chief Electoral Officer came down
with the opinion that the proposed “entry fee” would constitute a transfer from
the candidates to the party, rather than a leadership campaign expense.
[24]
In my opinion, either characterization would be reasonable.
This is a mixed question of fact and law, and so that opinion should not be
disturbed.
[25]
The Federal Liberal Agency of Canada, the legal entity of the
Liberal Party, which was added as a respondent by court order, suggested that
the “entry fee” should really be characterized as a deposit, which could be
declared refundable ex post facto. Its constitution contemplates
deposits but not entry fees. However it cannot invoke its own insider rules
against the Chief Electoral Officer who was not privy thereto and had no
interest therein. I am satisfied that once Mr. Rae paid the $50,000 to the
Liberal Party, property therein vested in it. This is the position taken by the
Chief Electoral Officer, a position with which I agree.
[26]
It follows that a payment or refund from the Party to Mr.
Rae would also be a transfer.
PRINCIPLE
OF STATUTORY INTERPRETATION
[27]
The modern approach to statutory interpretation as
formulated by Elmer Driedger has been approved by the Supreme Court in such
cases as Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002]
2 S.C.R. 559. In his Construction of Statutes (2nd Ed., Toronto:
Butterworths,1983) he said at page 87:
Today there is only
one principle or approach, namely, the words of an Act are to be read in their
entire context and in their grammatical and ordinary sense harmoniously with
the scheme of the Act, the object of the Act, and the intention of Parliament.
[28]
The Biolyse case, above, serves as a good
illustration of this principle. At issue was the legal meaning to be given to
the word “submission” as used within the Patented Medicines (Notice of
Compliance) Regulations. Although regulations are limited in scope by
their enabling statute, they are still construed on the same basis (Glykis
v. Hydro-Québec, 2004 SCC 60, [2004] 3 S.C.R. 285).
[29]
In Biolyse, the Court of Appeal gave “submission”
its “plain meaning”. The Supreme Court conceded that at first blush the word
appeared to be all-inclusive (para. 43). However, after following the Driedger
approach and putting the words in context, it gave the word “submission” a more
restricted meaning, more consistent with legislative intent.
[30]
Were we to approach section 404.3 of the Canada
Elections Act literally, or give it its “plain meaning”, then the proposed
repayment would be a prohibited transfer. However, in my opinion, this would
lead to a result not intended by Parliament.
[31]
The Chief Electoral Officer’s interpretation would be a
victory of form over substance, a position frowned upon by the Supreme Court in
such cases as Hamel v. Brunelle,
[1977] 1 S.C.R. 147.
[32]
Had Mr. Rae instructed the Liberal Party to hold $50,000
from his “directed contributions”, there never would have been a transfer from
him to the Liberal Party. Post-convention payment by the Liberal Party to him
of the $50,000 would be the payment of a “directed contribution” which is
perfectly legal as per subsection 404.3(3) of the Act.
[33]
In the same vein, the Liberal Party also raised funds to
defray the costs of the convention by imposing a 20% levy on contributions
received by contestants in excess of $500,000. However, those funds were collected
from “directed contributions” and following the convention were returned to the
contestants without problem.
[34]
Mr. Rae and the Liberal Party complain that the Chief
Electoral Officer has been inconsistent in his application of section 404.3
as he treated the Green Party, in its subsequent leadership convention,
differently. I do not agree. The Green Party had, in effect, asked if a
“security deposit”, a term not defined in the Act, could be refunded. In
Information Sheet 26, created after the Liberal Party convention and updated
from time to time by Elections Canada, it is stated that a refundable “security
deposit” would not be a transfer if the rules of the contest were set out in
writing before the payment was made and if, among other things, the conditions which
had to be met to obtain the refund were within the control of the prospective
contestants, such as the filing of reports or returns within a specified time.
[35]
Thus, even if the rules imposed by the Liberal Party with
respect to the “entry fee” provided that it would be refunded in whole or in
part if not needed to offset the expenses of the convention, the Chief
Electoral Officer would still consider a refund to be a prohibited transfer.
The overall number of delegates attending the convention, and the overall cost
thereof, would be beyond the control of any individual contestant.
[36]
This interpretation, in my opinion, is incorrect. The
purpose of the amendments to the Canada Elections Act was to impose on
leadership contestants the obligation to report on contributions received and
expenses incurred. The amendments also introduced limits on contributions that
could be made to leadership contestants. Within the harmony of the Act as a
whole, the Liberal Party intends to refund money paid to it by Mr. Rae. It is
not attempting to favour him over the other contestants as it intends to refund
each of them his or her $50,000 as well. There is no question of favouritism or
of attempting to circumvent contribution limits. The proposed “transfer” is a
“retransfer” and is not captured by subsection 404.3(1) of the Act. Had
the entry fee not been imposed, Mr. Rae could have used the money as he saw
fit, subject, of course, to the confines of the Act. For instance, he could
have reduced the borrowings he incurred in running for the leadership. It was
not Parliament’s intent to prevent the Party from returning to Mr. Rae money
which was his in the first place.
COSTS
[37]
Although costs usually follow the event, the position taken
by the Chief Electoral Officer was perfectly understandable. These important
amendments had not previously been considered by the Court. In the
circumstances there shall be no order as to costs.
ORDER
THIS
COURT ORDERS AND ADJUDGES that:
1.
The
application for judicial review of the decision, order, act or proceeding of
the Chief Electoral Officer in ruling that the reimbursement of a $50,000 entry
fee paid by the applicant, and other leadership contestants to the Liberal
Party of Canada, constitutes a prohibited transfer is granted.
2.
It
is hereby declared that the proposed payment does not constitute a transfer of
funds by a registered party to a leadership contestant prohibited by
sub-section 404.3(1) of the Canada Elections Act.
“Sean
Harrington”
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