An Act to amend the Canada Elections Act and the Income Tax Act

Link to law: http://laws-lois.justice.gc.ca/eng/AnnualStatutes/2004_24/FullText.html

An Act to amend the Canada Elections Act and the Income Tax Act

S.C. 2004, c. 24

Assented to 2004-05-14

An Act to amend the Canada Elections Act and the Income Tax Act

SUMMARY

This enactment amends the Canada Elections Act to adjust the requirements for political party registration in response to the June 27, 2003 decision of the Supreme Court of Canada in Figueroa v. Canada (Attorney General), 2003 SCC 37.

It replaces the existing 50 candidate requirement for political party registration with a series of new registration requirements. These requirements include that a party endorse and support at least one candidate, that it provide signed declarations of support from at least 250 members and that it have no fewer than four party officers.

It adds a purpose based definition of “political party” and requires the party's leader to make a declaration that one of the party's fundamental purposes is as described in the definition. Entities seeking to register as political parties must also satisfy the requirements of the definition, both at registration and on an ongoing basis. The Commissioner of Canada Elections may apply for judicial deregistration where those requirements are not met.

It provides measures to prevent entities from registering simply for the purpose of obtaining financial and other benefits and from redirecting tax receipted contributions to outside entities.

It creates new offences for providing false information and for acting as an officer knowing that the party does not satisfy the requirements of the definition. It also adds mechanisms for judicial deregistration of a political party, as well as liquidation of its assets, in the event of a conviction for certain offences.

It also amends the Income Tax Act to suspend the authority of a registered party to issue tax receipts while an application by the Commissioner for judicial deregistration is pending.

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

2000, c. 9 CANADA ELECTIONS ACT

1. Subsection 2(1) of the Canada Elections Act is amended by adding the following in alphabetical order:

“political party”

« parti politique »

“political party” means an organization one of whose fundamental purposes is to participate in public affairs by endorsing one or more of its members as candidates and supporting their election.

Marginal note:2001, c. 21, s. 12

2. Subsection 117(2) of the Act is amended by adding the word “and” at the end of paragraph (b) and by replacing paragraphs (c) and (d) with the following:

(c) at the close of nominations, the party is a registered party.

3. (1) Paragraph 366(2)(d) of the Act is replaced by the following:

(d) the name and address of the leader of the party and a copy of the party's resolution to appoint the leader, certified by the leader and another officer of the party;

(2) Paragraph 366(2)(f) of the Act is replaced by the following:

(f) the names and addresses of the officers of the party and their signed consent to act;

(3) Subsection 366(2) of the Act is amended by striking out the word “and” at the end of paragraph (h) and by replacing paragraph (i) with the following:

(i) the names and addresses of 250 electors and their declarations in the prescribed form that they are members of the party and support the party's application for registration; and

(j) the leader's declaration in the prescribed form that, having considered all of the factors — including those described in subsection 521.1(5) — relevant to determining the party's purposes, one of the party's fundamental purposes is to participate in public affairs by endorsing one or more of its members as candidates and supporting their election.

(4) Section 366 of the Act is amended by adding the following after subsection (2):

Marginal note:Additional information

(3) To confirm that the purpose referred to in paragraph (2)(j) is one of the party's fundamental purposes, the Chief Electoral Officer may ask the party's leader to provide any relevant information, including the information described in subsection 521.1(5).

4. Paragraphs 368(b) and (c) of the Act are replaced by the following:

(b) the party has at least three officers in addition to its leader and has appointed a chief agent and an auditor; and

(c) the Chief Electoral Officer is satisfied that the party has provided the information required under subsection 366(2) and that the information is accurate.

5. Sections 369 and 370 of the Act are replaced by the following:

Marginal note:Notification of eligibility

369. (1) The Chief Electoral Officer shall, as soon as practicable after the day on which the application is received, inform the leader of a political party that has applied to become registered whether or not the party is eligible for registration under section 368. If the party is not eligible, he or she shall also indicate which of that section's requirements have not been met.

Marginal note:Loss of eligibility

(2) A political party, having been informed of its eligibility under subsection (1), loses its eligibility if

(a) it contravenes any of section 371, subsection 374.1(1), sections 378 to 380.1, subsections 382(1), (3) and (4) and 383(1) and section 384;

(b) one of its officers is not eligible under subsection 374.1(2);

(c) its chief agent is not eligible under section 376; or

(d) its auditor is not eligible under section 377.

Marginal note:Registration

370. (1) An eligible party becomes a registered party if it has at least one candidate whose nomination has been confirmed for an election and its application to become registered was made at least 60 days before the issue of the writ or writs for that election and has not been withdrawn.

Marginal note:Late application

(2) An eligible party whose application was made after the 60 days referred to in subsection (1) becomes a registered party for the next general election — or any by-election that precedes it — if it satisfies the requirements of that subsection for that election.

Marginal note:Notification

(3) The Chief Electoral Officer shall, as soon as practicable after the 48-hour period following the close of nominations,

(a) inform the leader of an eligible party that meets the requirements of subsection (1) that the party has been registered; and

(b) in the case of a general election, inform the leader of an eligible party that does not meet the requirements of subsection (1) that the party has not been registered.

Marginal note:Loss of eligibility

(4) An eligible party, other than one referred to in subsection (2), loses its eligibility on being informed under subsection (3) that it has not been registered.

Marginal note:Eligible party deemed registered

(5) For the purposes of sections 407, 422, 429 and 435, an eligible party that becomes registered under subsection (1) is deemed to have been registered from the day of the issue of the writ or writs for that election.

6. The heading before section 375 of the Act is replaced by the following:

Officers, Registered Agents, Auditors and Members
7. The Act is amended by adding the following after the heading before section 375:

Marginal note:Minimum number of officers

374.1 (1) Subject to subsection (3), a registered party and an eligible party shall have at least three officers in addition to the leader of the party.

Marginal note:Eligibility — officer

(2) Only a person whose ordinary residence is in Canada is eligible to be an officer of a registered party or an eligible party.

Marginal note:Appointment of a replacement

(3) In the event of the death, incapacity, resignation, ineligibility or revocation of the appointment of an officer of a registered party or an eligible party, the party shall, if the remaining number of officers is less than four, appoint a replacement within 30 days.

Marginal note:Report of appointment

(4) Within 30 days after the appointment of the replacement, the registered party or eligible party shall inform the Chief Electoral Officer by providing a report under subsection 382(1).

8. Subsection 377(2) of the Act is amended by adding the following after paragraph (b):

(b.1) an officer of a registered party or an eligible party;

9. Section 378 of the Act is replaced by the following:

Marginal note:Consent

378. A registered party and an eligible party shall obtain from its officers, chief agent and auditor, on appointment, their signed consent to act.

10. The Act is amended by adding the following after section 380:

Marginal note:Minimum number of members

380.1 A registered party and an eligible party shall have at least 250 members who are electors.

11. Subsection 381(1) of the Act is replaced by the following:

Marginal note:Prohibition — officer

381. (1) No person who is not eligible to be an officer of a registered party or an eligible party shall so act.

Marginal note:Prohibition — agent

(1.1) No person who is not eligible to be a chief agent or registered agent of a registered party or an eligible party shall so act.

12. The Act is amended by adding the following after section 381:

Marginal note:Prohibition — fundamental purpose

381.1 (1) Subject to subsection (2), no person shall act or continue to act as an officer of a registered party or an eligible party if

(a) they know that the party does not have as one of its fundamental purposes participating in public affairs by endorsing one or more of its members as candidates and supporting their election; and

(b) the party has not made an application under section 388.

Marginal note:Exception

(2) A person referred to in subsection (1) may sign an application under section 388.

13. The heading before section 382 of the Act is replaced by the following:

Change of Information Concerning Parties

14. (1) Subsection 382(1) of the Act is replaced by the following:

Marginal note:Change in information

382. (1) Within 30 days after a change in the information on a registered party or an eligible party in the registry of parties, the party shall, in writing, report the change to the Chief Electoral Officer. The report must be certified by the leader of the party.

(2) Subsection 382(4) of the Act is replaced by the following:

Marginal note:New officer, chief agent or auditor

(4) A report under subsection (1) that involves the replacement of an officer, the chief agent or the auditor must include a copy of the consent referred to in section 378.

15. Section 384 of the Act is renumbered as subsection 384(1) and is amended by adding the following:

Marginal note:Confirmation of members

(2) On or before June 30 of every third year, beginning in 2007, a registered party and an eligible party shall provide the Chief Electoral Officer with the names and addresses of 250 electors and their declarations in the prescribed form that they are members of the party.

Marginal note:Declaration of leader

(3) On or before June 30 of every year, a registered party and an eligible party shall provide the Chief Electoral Officer with a declaration in the prescribed form by the leader that, having considered all of the factors relevant to determining the party's purposes — including those described in subsection 521.1(5) — one of the party's fundamental purposes is as described in paragraph 366(2)(j).

Marginal note:2003, c. 19, s. 13

16. Section 385 of the Act and the heading before it are replaced by the following:

Marginal note:Prohibition — false or misleading information (leader)

384.1 (1) No leader of a party shall provide the Chief Electoral Officer with information under section 366 that they know is false or misleading.

Marginal note:Prohibition — false or misleading information (party)

(2) No registered party or eligible party shall provide the Chief Electoral Officer with information under any of sections 382 to 384 that it knows is false or misleading.

Marginal note:Prohibition — certification by leader

(3) No leader of a party shall certify, under any of sections 382 to 384, a report or statement that they know contains false or misleading information.

Marginal note:Prohibition — leader's declaration

(4) No leader of a party shall make a declaration referred to in section 366, 382 or 384 that they know is false or misleading.

Marginal note:Prohibition — member's declaration

(5) No member of a party shall make a declaration referred to in section 366 or 384 that they know is false or misleading.

Deregistration of Registered Parties

Marginal note:Deregistration — no candidates

385. The Chief Electoral Officer shall, effective on the expiration in a general election of the period for the confirmation of nominations under subsection 71(1), deregister a registered party that, at that time, has not endorsed a candidate in that general election.

Marginal note:Deregistration — officers or members

385.1 (1) If the Chief Electoral Officer is not satisfied that a registered party is in compliance with subsection 374.1(1) or section 380. 1, he or she shall, in writing, notify the party that it is required to show its compliance with

(a) subsection 374.1(1), within 60 days after receipt of the notice; or

(b) section 380.1, within 90 days after receipt of the notice.

Marginal note:Extension

(2) If the Chief Electoral Officer is satisfied that the party has made reasonable efforts to comply with subsection 374.1(1) or section 380.1 within the time set out in the notice, he or she may, in writing, notify the party that it has another period of up to 60 or 90 days, as the case may be, in which to comply.

Marginal note:Deregistration

(3) The Chief Electoral Officer shall deregister a registered party if it fails to comply with a notice under subsection (1) or (2), as the case may be.

Marginal note:Notice of deregistration

385.2 The Chief Electoral Officer shall give notice of a deregistration under section 385 or 385.1 to the registered party and its chief agent and of the resulting deregistration under section 389.2 to the registered associations and their financial agents.

17. The Act is amended by adding the following after section 405.2:

Marginal note:Prohibition — soliciting or accepting contribution

405.21 (1) No person or entity shall solicit or accept a contribution on behalf of a registered party, registered association or candidate if the person or entity made a representation to the contributor or potential contributor that part or all of the contribution would be transferred to a person or entity, other than the registered party or a candidate, leadership contestant or electoral district association.

Marginal note:Prohibition — collusion

(2) No person or entity shall collude with a person or entity for the purpose of circumventing the prohibition in subsection (1).

Marginal note:2003, c. 19, s. 40

18. Subsection 435.35(3) of the Act is replaced by the following:

Marginal note:Period for providing update

(3) The leadership contestant's financial agent shall provide an updated version of a document referred to in subsection (1) within 30 days after making a payment that is dealt with in the updated version.

19. Subsection 455(3) of the Act is replaced by the following:

Marginal note:Period for providing update

(3) The candidate's official agent shall provide an updated version of a document referred to in subsection (1) within 30 days after making a payment that is dealt with in the updated version.

Marginal note:2003, c. 19, s. 57

20. Subsection 478.3(3) of the Act is replaced by the following:

Marginal note:Period for providing update

(3) The nomination contestant's financial agent shall provide an updated version of a document referred to in subsection (1) within 30 days after making a payment that is dealt with in the updated version.

21. (1) Paragraph 497(1)(b) of the Act is replaced by the following:

(b) being a registered party, contravenes subsection 375(3) or, being a registered party or an eligible party, contravenes subsection 374.1(4), section 378, subsection 379(1) or (2) or section 380 (failure to comply with requirements re officers, chief agent, registered agents or auditor);

(2) Paragraph 497(3)(b) of the Act is replaced by the following:

(b) wilfully contravenes subsection 381(1), (1.1) or (2) (ineligible person acting as officer, chief agent, registered agent or auditor);

(b.1) being an officer of a party, contravenes section 381.1 (officer knowing party not a political party);

(b.2) being a leader of a party, contravenes subsection 384.1(1), (3) or (4) (providing or certifying false or misleading information or making false declaration);

(b.3) being a registered party or an eligible party, contravenes subsection 384.1(2) (providing false or misleading information);

(b.4) being a member of a party, contravenes subsection 384.1(5) (making false declaration);

(3) Subsection 497(3) of the Act is amended by adding the following after paragraph (f.161):

(f.162) being a person or entity, contravenes subsection 405.21(1) (soliciting or accepting contribution);

(f.163) being a person or entity, contravenes subsection 405.21(2) (collusion);

22. (1) Section 501 of the Act is renumbered as subsection 501(1).

(2) Subsection 501(1) of the Act is amended by adding the following after paragraph (a):

(a.1) if the offence results, directly or indirectly, in a financial benefit under this Act, or a contribution for which a receipt referred to in subsection 127(3) of the Income Tax Act was issued, pay to the Receiver General an amount that is not more than the financial benefit or contribution, as the case may be;

(3) Section 501 of the Act is amended by adding the following after subsection (1):

Marginal note:Additional penalties

(2) If a registered party, its chief agent or registered agent or one of its officers has been convicted of an offence referred to in subsection (3), the court may, having regard to the nature of the offence and the circumstances surrounding its commission, and in addition to any other punishment that may be imposed under this Act, by order,

(a) direct the Chief Electoral Officer to deregister the party;

(b) if it directs deregistration under paragraph (a), direct the chief agent — or another person specified by the court — to liquidate the party's assets; and

(c) if it directs liquidation under paragraph (b), direct the financial agent of each registered association — or another person specified by the court — to liquidate the registered association's assets.

Marginal note:Offences

(3) For the purposes of subsection (2), the provisions are:

(a) paragraph 497(3)(b.2) (providing or certifying false or misleading information or making false declaration);

(b) paragraph 497(3)(b.3) (providing false or misleading information);

(c) paragraph 497(3)(f.07) (failure to provide financial transactions return or related documents);

(d) paragraph 497(3)(f.161) (entering into prohibited agreement);

(e) paragraph 497(3)(f.162) (making representation re contribution);

(f) paragraph 497(3)(f.163) (collusion);

(g) paragraph 497(3)(i) (failure to provide financial transactions return or related documents);

(h) paragraph 497(3)(k) (providing financial transactions return containing false or misleading statement);

(i) subparagraph 497(3)(m)(ii) (providing election expenses return containing false or misleading statement); and

(j) paragraph 497(3)(v) (providing electoral campaign return containing false or misleading statement or one that is incomplete).

Marginal note:Documents to be provided to Chief Electoral Officer

(4) The chief agent or specified person shall, within six months after being directed to liquidate the party's assets under subsection (2), provide to the Chief Electoral Officer

(a) a statement — prepared in accordance with generally accepted accounting principles — of the fair market value of the party's assets and liabilities on the day of the order;

(b) a report by the party's auditor to the chief agent or specified person containing the auditor's opinion as to whether the statement presents, in accordance with generally accepted auditing standards, the fair market value of those assets and liabilities; and

(c) a declaration in the prescribed form by the chief agent or specified person concerning that statement.

Marginal note:Remittance to Receiver General

(5) Within three months after providing the documents referred to in subsection (4), the chief agent or specified person shall remit an amount equal to any net balance of the assets over liabilities, calculated on the basis of the statement mentioned in paragraph (4)(a), to the Chief Electoral Officer who shall forward that amount to the Receiver General.

Marginal note:Liability of chief agent

(6) The chief agent or specified person is liable for the remittance of the amount referred to in subsection (5).

Marginal note:Application to registered associations

(7) Subsections (4) to (6) apply to the liquidation of a registered association's assets under subsection (2) and any reference in those subsections to “party” and “chief agent” shall be read as a reference to “registered association” and “financial agent”, respectively.

23. The Act is amended by adding the following after section 521:

Deregistration

Marginal note:Notice to party

521.1 (1) If the Commissioner has reasonable grounds to suspect that a registered party does not have as one of its fundamental purposes participating in public affairs by endorsing one or more of its members as candidates and supporting their election, the Commissioner shall, in writing, notify the party that it is required to show that that is one of its fundamental purposes.

Marginal note:Court application

(2) If, after giving the party a reasonable opportunity to show what its fundamental purposes are, the Commissioner still has reasonable grounds to suspect that the party does not have as one of its fundamental purposes the purpose described in subsection (1), the Commissioner may apply to a court described in subsection 525(1) for an order described in subsection (3).

Marginal note:Order

(3) If the court is satisfied that the party does not have as one of its fundamental purposes the purpose described in subsection (1), the court shall, by order, direct the Chief Electoral Officer to deregister the party and it may

(a) direct the chief agent — or another person specified by the court — to liquidate the party's assets; and

(b) if it directs liquidation under paragraph (a), direct the financial agent of each registered association — or another person specified by the court — to liquidate the registered association's assets.

Marginal note:Onus on party

(4) The onus of satisfying the court that one of its fundamental purposes is the purpose described in subsection (1) is on the party.

Marginal note:Factors

(5) In making its decision, the court shall consider all of the factors relevant to determining the party's purposes, including, as applicable, the following:

(a) the party's constitution, articles of incorporation, letters patent or by-laws or any other information that may indicate those purposes;

(b) the party's political program, annual report to members, fundraising plan, advertising material and policy statements;

(c) the nature and extent of the activities of the party and its registered associations and candidates, including the nature and extent of their involvement in electoral campaigns and any of their public statements in support of another political party or a candidate of another political party;

(d) the funds received by the party and its registered associations and candidates, their sources and how they are used by the party, including as election expenses;

(e) interactions of the party with other entities that are not recognized political parties under the laws of any province that may indicate that it is under the control, direct or indirect, of another entity or that the party is using its status as a registered party primarily for the purpose of providing financial assistance to another entity; and

(f) whether the party is a non-profit entity.

Marginal note:Exemption

(6) If, in the court's opinion, the public interest and the need to ensure fairness of the electoral process warrant it, the court may, on application, exempt the party and its registered associations from the application of subsection 127(3.3) of the Income Tax Act. If an exemption is granted, the court may impose any conditions on the activities of the party, registered association or candidate that it considers appropriate.

Marginal note:Liquidation

(7) If a chief agent, a financial agent or a person specified by the court is, under subsection (3), directed to liquidate, they shall carry out the liquidation in accordance with subsections 501(4) to (7).

R.S., c. 1(5th Supp.) INCOME TAX ACT

24. Section 127 of the Income Tax Act is amended by adding the following after subsection (3.2):

Marginal note:Prohibition — issuance of receipts

(3.3) If the Commissioner of Canada Elections makes an application under subsection 521.1(2) of the Canada Elections Act in respect of a registered party, no registered agent of the party — including, for greater certainty, a registered agent appointed by a provincial division of the party — and no electoral district agent of a registered association of the party shall issue a receipt referred to in subsection (3) unless the Commissioner withdraws the application or the court makes an order under subsection 521.1(6) of that Act or dismisses the application.

TRANSITIONAL PROVISIONS

Marginal note:Parties to perfect registration

25. (1) A party that is registered or eligible to become registered on the day on which this Act comes into force shall, within six months after that day, provide to the Chief Electoral Officer the information described in paragraphs 366(2)(d), (f), (i) and (j) of the Canada Elections Act, as enacted by this Act.

Marginal note:Requirements do not apply

(2) Subsection 369(2), section 374.1, paragraph 377(2)(b.1), sections 378 and 380.1 and subsections 382(4) and 384(3) of the Canada Elections Act, as enacted by this Act, do not apply — until six months after the day on which this Act comes into force — in respect of a party that is registered or eligible to become registered on that day.

Marginal note:Requirements continue to apply

(3) Subsection 369(2), section 378 and subsection 382(4) of the Canada Elections Act, as they read immediately before the day on which this Act comes into force, continue to apply — until six months after that day — in respect of a party that is registered or eligible to become registered on that day.

Marginal note:Sunset provision

26. The amendments made by this Act cease to have effect on the day that is two years after the day on which this Act comes into force or, if Parliament is not then in session, on the day that is 90 days after the commencement of the next ensuing session.

COMING INTO FORCE

Marginal note:Coming into force

27. (1) Subject to subsection (2), this Act comes into force on June 27, 2004 unless, before that day, the Chief Electoral Officer has published a notice in the Canada Gazette that the necessary preparations for the bringing into operation of this Act have been made and that this Act may come into force accordingly.

Marginal note:Limitation

(2) If this Act receives royal assent on a day that is after June 27, 2004, it comes into force on that day.
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