Annual Report on Election Finances January 1, 2009 to December 31, 2009
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Annual Report on Election Finances January 1, 2009 to December 31, 2009 Office of the Chief Electoral Officer Annual Election Finances Report 2009 1 Introduction This report summarizes the financial activities of the Liberal Party, the Progressive Conservative Party and the New Democratic Party for the period covering January 1, 2009 to December 31, 2009. This report also summarizes the financial activity of candidates and political parties relating to the by- election in the electoral district of The Straits - White Bay North (held on October 27, 2009) and the by- election held in the electoral district of Terra Nova (held on November 26, 2009). The original copy of this report has been forwarded to the Queen’s Printer for reproduction and availability to the public. A copy has been supplied to the Legislative Librarian for further reference by Members of the House of Assembly and summary information is also available for viewing on the Elections Newfoundland and Labrador webpage at www.elections.gov.nl.ca. Office of the Chief Electoral Officer Annual Election Finances Report 2009 2 History Of Election Finance Legislation The Elections Act, 1991, which was passed by the House of Assembly in June 1992, provided for the comprehensive regulation of financing by political parties, district associations and non-affiliated candidates in elections. Part III of the Act dealing with Election Finances was proclaimed into force on October 1, 1993 but pertained only to registered political parties and registered candidates in elections. Initially, it was intended that experience with election finance regulation of political parties would be evaluated before proclaiming Part III to pertain to district associations. This partial proclamation necessitated an amendment to Part III in December 1993 in the form of a transitional provision that treated all candidates in an election as if they were non-affiliated candidates. On January 26, 1996, the Government of Newfoundland and Labrador issued a policy statement, with the agreement of all political parties, which placed further restrictions on district association activities during the 1996 General Election campaign period. Significant amendments to the Act received Royal Assent on June 5, 1998 to take effect on September 3, 1998. The most significant of the new amendments from an election finance perspective was the removal of annual contribution limits for individuals and corporations who wish to donate to a political cause. Also, the amended Act is no longer applicable to the operation of local political district associations. The Act places the onus on the various political parties for controlling and reporting on the financial activity of their district associations with respect to political fundraising by requiring all such funds to be channelled through the political party accounts. Further amendments to the Act which affected certain provisions of Part III dealing with election finances, received Royal Assent on June 14, 2007. These provisions changed the official length of time for a campaign period to end four months from polling day as opposed to the previous six month period, increased the candidate nomination fee deposit to $200 from $100, and made refund of the nomination fee contingent on timely filing of election finance reports as opposed to the previous process where refund of the nomination fee deposit was contingent on a candidate receiving at least 15 per cent of the popular vote in their district. Office of the Chief Electoral Officer 3 Annual Election Finances Report 2009 Election Finance Compliance ANNUAL FINANCIAL STATEMENTS – (The Labrador Party deregistered) Under Part III of the Elections Act, 1991, registered political parties are subject to fundraising guidelines and to the public disclosure of their financial affairs in the form of an annual filing of audited financial statements. The deadline for filing of the annual Political Party statements is legislatively set at April 1 of the year following the year to which they relate. Three of the four political parties registered with the Office of the Chief Electoral Officer at the beginning of the 2009 calendar year filed the required audited financial statements pertaining to 2009 and their financial statements have been certified by the Chief Electoral Officer as having met the requirements of the Act. The Liberal Party filed the required financial package by the April 1, 2010 deadline. The Progressive Conservative Party and the New Democratic Party were granted extensions to the deadline for various reasons after my office had reviewed those reasons and determined that they did not involve willful intent or neglect on the part of their Chief Financial Officers. The Labrador Party did not file the required financial package for 2009 and on July 15, 2010 was notified of deregistration for failure to comply with requirements of the Elections Act, 1991. Appendix A to this report presents a summary of the annual financial statement information provided by the other three parties for 2009. The actual financial statements on which this summary is based may be viewed at the Office of the Chief Electoral Officer during normal business hours. BY-ELECTION FINANCIAL STATEMENTS Section 304 of the Elections Act, 1991 requires candidates in a by-election and political parties that received contributions or made expenditures in relation to the by-election to file with the Office of the Chief Electoral Officer a financial statement of income and expenses relating to the by-election within four months of polling day. There were three candidates for each of the two by-elections held during 2009. In addition, the Progressive Conservative Party reported campaign expenditures relating to both by-elections and the Liberal Party reported expenditure relating to the by-election held in the electoral district of The Straits - White Bay North resulting in a total of 9 separate filings for the two by-elections. Appendix B to this report presents a summary of the information contained in the income and expenditure statements provided by the candidates, the Progressive Conservative Party and the Liberal Party relating to the two 2009 by-elections. The actual financial statements on which this summary is based may be viewed at the Office of the Chief Electoral Officer during normal business hours. Office of the Chief Electoral Officer Annual Election Finances Report 2009 4 BY-ELECTION EXPENDITURE LIMITS Section 310 of the Elections Act, 1991 places a limitation on the amount of certain election expenses permitted by political parties and candidates in an election or by-election. These limits are established for each electoral district based on the number of eligible voters on the official voter list used for the election multiplied by an inflation adjusted factor per voter. For the 2009 by- elections, the inflation adjusted factor was $4.001 per voter. Expenditure limits pertaining to the two by-elections reported here were as follows: The Straits - White Bay North 6783 voters X 4.001 = $ 27,139 Terra Nova 8282 voters X 4.001 = $ 33,136 Election expenditure limits apply only to certain types of expenditures made by a campaign. These limits are not applicable to amounts spent by candidates on their own or their spouses’ travel or other personal living expenses; to amounts spent on wrap-up or election night thank-you parties; to amounts transferred to candidates and from political parties under certain provisions of the Act or to other expenses that are not directly related to contesting of the election. The reason for excluding certain expenses from campaign expenditure limits is rooted in the principle of fairness and the goal to create as level a playing field as possible for all candidates. For example, a candidate who maintains a permanent residence in a particular district would likely incur less travel and living expenses than a candidate who does not live in the district and would obtain an obvious spending advantage if the travel expenses of the candidate who was required to travel further or more frequently were subject to the districts’ election expense limits. All filings for the 2009 by-elections were within the expenditure limits established as outlined above. (See Appendix B). Office of the Chief Electoral Officer 5 Annual Election Finances Report 2009 BY-ELECTION SUBSIDY If a candidate in an election receives at least 15 per cent of the popular vote cast in their district they are entitled to a subsidy reimbursement calculated to be 1/3 of their eligible allowable campaign expenses up to a maximum of 1/3 of their district expenditure limit. For the two by-elections held during 2009, a total of $31,705 in campaign subsidies was paid out as follows: The Straits - White Bay North - Marshall Dean Campaign $ 8,056 - Rick Pelley Campaign $ 7,561 Terra Nova - John Baird Campaign $ 6,871 - Sandy Collins Campaign $ 9,217 In addition to the campaign expense subsidy payable to candidates, the Chief Electoral Officer also subsidizes the cost of auditor services to candidates to a maximum amount of $500 per campaign paid directly to a candidate’s auditors. The total auditor subsidy amount paid to auditors for candidates in the by-elections was $3,000. Office of the Chief Electoral Officer Annual Election Finances Report 2009 6 CAMPAIGN SURPLUS Subsection 313(1) of the Elections Act, 1991 requires that a campaign surplus created either from political contributions, expense subsidies or other income sources permitted by the Act, be remitted to the appropriate party if a candidate’s political affiliation appears on the ballot or in the case of a non-affiliated candidate to the Chief Electoral Officer who shall hold the money in trust on behalf of the non-affiliated candidate and pay it out as follows: If the person on whose behalf money is held in trust under Subsection 313(1) becomes a candidate, either in a by-election called before the next general election or in the next general election, the money held in trust for the person shall be paid to him or her for the purpose of contesting the election.