Callaghan v. Canada (Chief Electoral Officer)

Callaghan v. Canada (Chief Electoral Officer)
Court (s) Database
Federal Court Decisions
Date
2010-01-18
Neutral citation
2010 FC 43
File numbers
T-838-07
Notes
Reported Decision
Decision Content
Federal Court
Cour fédérale
Date: 20100118
Docket: T-838-07
Citation: 2010 FC 43
Ottawa, Ontario, January 18, 2010
PRESENT: The Honourable Mr. Justice Martineau
BETWEEN:
L.G. CALLAGHAN IN HIS CAPACITY AS
OFFICIAL AGENT FOR ROBERT CAMPBELL
AND DAVID PALLET IN HIS CAPACITY AS
OFFICIAL AGENT FOR DAN MAILER
Applicants
and
THE CHIEF ELECTORAL OFFICER
OF CANADA
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1] The Court is called upon to examine the role exercised by the Chief Electoral Officer (CEO), the named respondent in this application for judicial review, under Part 18 – Financial Administration of the Canada Elections Act, S.C. 2000, c. 9 (the Act). Of particular importance to this application are the provisions related to the reimbursement of election expenses claimed by candidates who have participated in a federal election.
[2] The 39th general election took place on January 23, 2006 (the 2006 election). On or around April 23, 2007, the respondent sent letters to a number of candidates of the Conservative Party of Canada (the Party) who participated in the 2006 election, informing them of his decision to refuse to certify certain advertising expenses which had been claimed as election expenses.
[3] The applicants act as official agents of two Conservative candidates, and were among the recipients of these refusal letters. As such, they challenge the legality of the CEO's decision to refuse to certify certain advertising expenses claimed by their particular campaigns (the impugned decisions). They request that the Court set aside these two decisions and force the respondent to deliver new certificates to the Receiver General of Canada (Receiver General) which include the claimed advertising expenses.
[4] While the Court does not endorse all of the arguments made by the applicants, the impugned decisions should be set aside and the matter referred back to the respondent with appropriate directions.
[5] In reaching the above conclusion, the Court has considered the totality of evidence filed by the parties in this proceeding, the representations made by counsel in their written material as well as at the five day hearing held November 23-27, 2009, and the additional documentation and submissions put forward by both parties after the hearing.
I – LEGISLATIVE FRAMEWORK
[6] Prior to examining the facts relevant to the present application, it is necessary to highlight the purpose of the provisions found in Part 18 of the Act. These provisions deal with, and assist the Court in understanding, the election spending limits, the obligations incumbent on official agents and the basic principles that govern the reporting and reimbursement of expenses incurred by candidates in a federal election.
A – SPENDING LIMITS
[7] In 1991, the Royal Commission on Electoral Reform and Party Financing (the Lortie Commission) underscored the importance of spending limits with regard to electoral fairness. Among other things, the Lortie Commission made a correlation between political communication, spending limits and voter behaviour. It was noted that political communication has a known effect on voters and that inequalities in the spending capacity of participants (i.e. candidates and/or registered parties) in an election would have a considerable impact on the outcome of the vote, since participants with greater resources would be able to communicate more frequently and with the assistance of different media (Royal Commission on Electoral Reform and Party Financing, Reforming Electoral Democracy, vol. 1 (Ottawa: Communication Group, 1991) at pages 324 and 339 (Chair: Pierre Lortie)).
[8] Six years later, in Libman v. Quebec (Attorney General), [1997] 3 S.C.R. 569, the Supreme Court of Canada confirmed the importance of spending limits in the electoral context. At paragraphs 47 and 48, the Court noted that “spending limits are essential to ensure the primacy of the principle of fairness in democratic elections” and that “[f]or spending limits to be fully effective, they must apply to all possible election expenses...”
[9] In 2004, Justice Bastarache, writing for the majority of the Supreme Court of Canada in Harper v. Canada (Attorney General), 2004 SCC 33 at paragraphs 102 and 103 (Harper), remarked that “[t]he primary mechanism by which the state promotes equality in the political discourse is through the electoral financing regime” and “[i]f Canadians lack confidence in the electoral system, they will be discouraged from participating in a meaningful way in the electoral process”.
[10] At paragraph 62, Justice Bastarache mentions that Parliament has adopted “the egalitarian model of elections”, which seeks to create a “level playing field”; he notes in this regard:
62. [...] Thus, the egalitarian model promotes an electoral process that requires the wealthy to be prevented from controlling the electoral process to the detriment of others with less economic power. The state can equalize participation in the electoral process in two ways; see O. M. Fiss, The Irony of Free Speech (1996), at p. 4. First, the State can provide a voice to those who might otherwise not be heard. The Act does so by reimbursing candidates and political parties and by providing broadcast time to political parties. Second, the State can restrict the voices which dominate the political discourse so that others may be heard as well. In Canada, electoral regulation has focussed on the latter by regulating electoral spending through comprehensive election finance provisions. These provisions seek to create a level playing field for those who wish to engage in the electoral discourse. This, in turn, enables voters to be better informed; no one voice is overwhelmed by another. In contrast, the libertarian model of elections favours an electoral process subject to as few restrictions as possible.
[11] Section 422 of the Act sets out the formula used to determine the maximum election expenses a registered party may incur during an election. Pursuant to section 423, no chief agent shall incur election expenses on behalf of a party which exceeds the party's spending limit.
[12] The formula used to determine the maximum amount that a candidate may incur as election expenses is set out in sections 440 and 441 of the Act. Pursuant to subsection 443(1), no candidate or official agent (or person authorized to enter into contracts under paragraph 446(c)) shall incur election expenses that exceed the campaign's spending limit.
B – ROLE OF THE OFFICIAL AGENT
[13] Before accepting a contribution or incurring an electoral campaign expense, all candidates must appoint an official agent (subsection 83(1) of the Act). The official agent is responsible for administering the financial transactions for the candidate's electoral campaign and for reporting those transactions in accordance with the provisions of the Act (section 436).
[14] During an election, the official agent must open a separate bank account for electoral expenses. All of the candidate's financial transactions involving the receipt or payment of money must be withdrawn from or deposited to this account (subsections 437(1) and 437(3)).
[15] Only a candidate, their official agent or a person whom the official agent has authorized in writing to enter into contracts may incur electoral expenses (subsections 438(5) and 446(c)). Only the official agent, however, can pay those expenses (subsection 438(4)) or accept contributions to the candidate's electoral campaign (subsection 438(2)).
C – REPORTING REQUIREMENTS
[16] The reporting scheme established in Part 18 of the Act constitutes an essential component of the electoral financing regime. At the end of an election, candidates’ official agents and the parties’ chief agents must report their contributions received and their expenses incurred in the manner provided in the Act.
[17] Election expenses reporting requirements for a registered party are found in sections 429 to 434 of the Act. Where the contributions received and the expenses incurred by the party do not need to be reported in the party’s election expenses return, they will normally be required to be reported in the party’s annual return that must be submitted by the party for each fiscal period (section 424). Furthermore, for each electoral district, these annual returns shall contain a statement of the commercial value of the goods or services provided and of the funds transferred by the registered party to a candidate or an electoral district association (paragraph 424(2)(h)).
[18] In the case of candidates, the reporting requirements are found in sections 451 to 462 of the Act. At the end of an election, the official agent is responsible for providing the CEO with an audited electoral campaign return which includes, inter alia, a statement of electoral and other expenses, a statement of the commercial value of all contributions received (monetary and non-monetary) and a statement of the commercial value of any transfers of funds or goods and services between the candidate and a registered party (subsections 451(1) and 452(2)(a), (b), (f), (i) and (j)).
[19] Together with the electoral campaign return, the official agent shall provide the CEO with documents evidencing the expenses set out in the return, including bank statements, deposit slips, cancelled cheques and the candidate's written statement concerning his or her personal expenses (subsection 451(2.1)). Moreover, the official agent shall, on closing the bank account he or she opened in relation to the electoral campaign, provide the CEO with the final statement of the account (subsection 437(5)).
[20] An auditor’s report is also submitted to the CEO along with the electoral campaign return and the declarations made, in the prescribed form, by the official agent and the candidate (subsection 451(1) and section 453). The auditor’s report shall include in the prescribed form, a completed checklist for audits and, as the case may be, a negative statement concerning the accuracy and comprehensiveness of the information provided in the financial records. The candidate's auditor fees are part of the electoral campaign expenses of the candidate (section 406).
[21] At any time, the CEO may correct a document submitted on behalf of a candidate, pursuant to subsections 451(1) and 455(1), or a registered party, pursuant to subsections 424(1) and 429(1), if the correction does not materially affect the document's substance (subsection 432(1) or 457(1)).
On the written application of the chief agent of a registered party or a candidate or his/her official agent, the CEO may grant an extension of the deadline for submission or permit the correction of any of the above listed documents. Most notably, such discretion may be exercised where there is evidence of inadvertence or an honest mistake of fact (see paragraphs 433(3)(c) or 458(3)(d)).
[22] Furthermore, the CEO may always request in writing that the registered party, the candidate or the official agent correct a document within a specified period of time, subject only to the right these three entities have to ask to be relieved by a judge from complying with the request (see subsection 432(2), paragraph 434(1)(a), subsection 457(2) and paragraph 459(1)(a)). Such an application is not made to the Federal Court but to "a judge who is competent to conduct a recount". The judge may not grant an order unless he or she is satisfied that the application arose by reason of one of the listed factors, which include inadvertence or an honest mistake of fact (see subsections 434(3) and 459(3)). See also Conservative Fund Canada v. The Chief Electoral Officer of Canada (31 December 2009), Toronto 09-8323-00CL (Ont. Sup. Ct.) (Conservative Fund of Canada).
[23] Thus, if the CEO is made aware of the expenses that have been erroneously omitted from a candidate's or a party's return, he may request that the return be corrected notwithstanding the fact that a certificate has already been issued pursuant to sections 435 or 465 (addressed below). He may also make a request for an amendment where an election expense was improperly included.
D – REIMBURSEMENT BY THE RECEIVER GENERAL
[24] Section 435 of the Act governs the partial reimbursement (50%) of paid election expenses incurred by a registered party. Inter alia, reimbursement is subject to compliance by the registered party and its chief agent with the reporting requirements found in sections 429 to 434.
[25] Sections 464 to 470 regulate the partial reimbursement (60%) of paid election and personal expenses incurred by candidates during a federal election. Similar to the scheme set out for registered parties, reimbursement for candidates is subject to the candidate's compliance with the reporting requirements found in sections 451 to 462.
[26] Section 464 of the Act provides that immediately after an election, upon receipt of a certificate issued by the CEO, the Receiver General shall pay a first instalment of money equal to 15% of the candidate’s election expenses limit (as calculated in section 440) to every candidate who has received 10% or more of the number of valid votes cast.
[27] According to subsection 465(1) of the Act, the CEO shall provide the Receiver General with a certificate that authorizes the payment of a final instalment if the CEO “is satisfied that [, inter alia,] the candidate and his or her official agent have complied with the requirements of subsection 447(2) and sections 451 to 462”.
[28] The final instalment is the lesser of: (1) 60% of the sum of the candidate’s paid election expenses and their paid personal expenses minus the partial reimbursement granted under section 464, or (2) 60% of the election expenses limit set out in sections 440 and 441 minus the partial reimbursement granted under section 464 (subsection 465(2)).
E – OFFENCES AND CRIMINAL PROSECUTION
[29] Apart from the provisions in Part 18 of the Act that deal with the administrative treatment of contributions made and expenses incurred during an election, the Act establishes, in Part 19 – Enforcement, a concurrent scheme which permits the Commissioner of Canada Elections (the Commissioner) to investigate any actions which may constitute an offence as defined in sections 480 to 499 (note that sections 500-508 deal with the punishment for the offences enumerated in sections 480-499). These investigations may ultimately lead to criminal proceedings against persons who are believed to be in contravention of the Act.
[30] If the Commissioner believes on reasonable grounds that an offence under this Act has been committed, the Commissioner may refer the matter to the Director of Public Prosecutions (the DPP) who shall decide whether to lay a criminal charge (subsection 511(1)).
[31] Notably, it is an offence for the chief agent of a registered party to exceed the party’s spending limit (paragraphs 497(1)(1) and 497(3)(g)). Likewise, it is an offence for the candidate, the official agent or the person authorized in writing to enter into a contract (pursuant to paragraph 446(c)) to exceed the candidate’s election expenses limit as established by the Act (subsection 443(1) and paragraph 497(1)(s)).
II – FACTUAL BACKGROUND
[32] The applicants, L.G. Callaghan and David Pallet, are the official agents of two candidates of the Party, who participated in the 2006 election. Mr. Callaghan acts for Robert Campbell in the Dartmouth-Cole-Harbour riding (Dartmouth), while Mr. Pallet acts for Dan Mailer in the London-Fanshawe riding (London).
[33] 308 candidates of the Party participated in the 2006 election. The Conservative Fund of Canada (the Fund) was the chief agent for the Party. Along with 65 other official agents for Conservative candidates, election expense claims were made by the applicants with respect to their share in a “regional media buy” (RMB) program put in place by the Party (the claimed advertising expenses).
[34] As is evidenced by the invoices submitted with the participating candidates’ electoral campaign returns, the Fund appears to have been the supplier for this RMB program.
[35] The writs for the 2006 election were issued on November 29, 2005. According to the evidence submitted by the parties, the Party developed its RMB program in early December 2005. This program provided for pools of radio and television advertising to be offered for purchase to selected Conservative candidates throughout Canada (with the exception of Alberta). The amount contributed by each participating campaign was contingent on the availability of space in the official agent's budget, taking into consideration his or her projected electoral expenses. Thus, a candidate could contribute to a regional media buy (RMB) as long as it was within the campaign’s election expenses spending limit. That being said, a campaign could not participate in the RMB program without the agreement of either its candidate or its official agent.
[36] The advertisements (ads) in question were broadcast on television and radio during the 2006 election period (except on the blackout day) in the local area of each participating campaign. The Party was responsible for the production and the content of the ads. Except for the “tag line” which showed the official agent’s authorization, these ads would be the same ones that the Party had already used or was concurrently using in its national campaign to promote the Party and its leader.
[37] When soliciting for participation in the RMB program, the selected campaigns were informed that the Party would finance their campaign's commitment to the program by way of monetary transfers between the Fund and the respective campaigns' bank account.
[38] The evidence shows that the Party did in fact finance candidates' contributions using the following scheme: first, the Fund issued an invoice to the official agent. Simultaneously, the official agent completed a wire transfer form instructing the same amount indicated in the invoice to be transferred from the campaign to the Fund. This wire transfer form was signed and sent back to the Fund, who filled in any missing information. The Fund then prepared a second wire transfer, directing the same amount of money to be transferred from the Fund to the candidate. Finally, after the transfer from the Fund was completed, the wire transfer form completed by the official agent was sent to the bank to have the money paid right back.
[39] Indeed, during the 2006 election, the Fund transferred some 1.2 million dollars to the 67 local campaigns participating in the RMB program. The totality of this amount was returned to the Fund by way of these “in and out” transfers with each participating candidates.
[40] By December 19, 2005, the London and Dartmouth campaigns had both agreed to participate in the RMB program. According to a Party document entitled “ROC CANDIDATE
ALLOCATION (as of Dec 19/05)”, both Dartmouth and London had committed to contribute $10,000.00.
[41] Retail Media Inc. (RMI), the company who was already acting as the supplier/agency of record for the media buys made by the Party, was the intermediary responsible for booking broadcast time for the participating campaigns, including Dartmouth and London.
[42] The Fund eventually billed the Dartmouth campaign an amount of $3,947.07, including GST, as appears from the invoice numbered MBUYROC050019 dated December 23, 2005, which was duly paid on January 11, 2006. The same amount was claimed as an election expense by the
applicant L.G. Callaghan. In the return filed on May 19, 2006 on behalf of Robert A. Campbell
(Dartmouth), said election expense is identified as the “2005-2006 Candidate share of media advertisement”.
[43] The Fund also billed the London campaign the amount of $9,999.15, including GST, as appears from the invoice numbered MBUYROC050013 dated December 23, 2005, which was duly
paid on January 10, 2006. The same amount was claimed as an election expense by the applicant
David Pallet. Again, in the return filed on May 11, 2006 on behalf of Dan Mailer (London), said election expense is identified as the “2005-2006 Candidate share of media advertisement”.
[44] In both the Dartmouth and London ridings, the ads which ran during the 2006 election contained “tag lines” that identified the ads as having been authorized by the applicants.
[45] By separate, but almost identical letters dated April 23, 2007, the applicants were advised that the claimed advertising expenses would be excluded from the amount that the respondent would certify for reimbursement by the Receiver General, on the ground that the CEO was “not satisfied that the documentation submitted establishes the claimed election expense”.
[46] The present judicial review application was commenced on May 14, 2007. It is noteworthy that similar refusal letters were sent to other official agents of Conservative candidates on April 13, April 23, and on August 27, 2007. While there were 34 official agents originally named in this application, Mr. Callaghan in his capacity as official agent for Robert Campbell, and Mr. Pallet in his capacity as official agent for Dan Mailer, are the only remaining applicants.
III – REASONS FOR REFUSING TO CERTIFY THE CLAIMED EXPENSES AND THE RELATED EVIDENCE
[47] The impugned decisions were not the result of an analysis conducted solely by the respondent. According to the evidence on record, questions had been raised by Elections Canada representatives during the audit of the electoral campaign returns filed by certain Conservative candidates. It is of note that these concerns, which gave rise to the decision to refuse to certify, were not borne out of the returns filed by the candidates who are represented by the applicants in the present application.
[48] For a couple of months prior to the final decision being made, there were on-going discussions between the Party and Elections Canada. As a result of these communications, the Party supplied Elections Canada with additional information concerning the RMB program.
[49] Elections Canada was informed by the Party in January 2007 that there was “no single contractual document between the registered party of the candidates and the supplier [RMI] that speaks to the arrangements of regional media buy.”
[50] In early April 2007, a meeting was held between Party representatives, including Ms. Susan Kehoe, then Chief Financial Officer of the Fund, and representatives of Elections Canada. During this meeting, the Party requested that Elections Canada attempt no further contact with Conservative candidates on the basis that no further information would be provided.
[51] While the decisions under review are the decisions encapsulated in the two letters addressed to the applicants, dated April 23, 2007, these letters were not the last communication between Elections Canada and the Party. On April 25, 2007, the respondent provided the following reasons in support of his decision to refuse to certify to the Receiver General all RMB expenses claimed by Conservative candidates for the 2006 election that had not already been reimbursed:
…
My decision in relation to the “media buy” program was made on the basis of my assessment of the circumstances surrounding that program, which remain unresolved. Among other things, these included the fact that the internal invoicing between the party and the candidates was not adequately supported by third party documents, coupled with the absence of correlation between the various
campaigns' share of the costs for the advertisements and their commercial value with respect to those campaigns. While there may be different ways of assessing the commercial value, the basis upon which it is done must be a reasonable one. Commercial value cannot be solely based on each campaign's willingness and ability to support a particular amount. This has been in the past, and remains, the position of Elections Canada.
As stated above, the circumstances surrounding the “media buy” are under review by the Commissioner of Canada Elections and you may wish to communicate with him if you have any questions in this regard.
[52] In a nutshell, in addition to reiterating that the information provided by the candidates and the Party was insufficient and raising the issue of the commercial value of the claimed advertising expenses, the respondent politely informs the Party that he has reasons to believe that the Party has done something illegal, hence, his decision to refer the matter for investigation by the Commissioner.
[53] A few months after the present application was initiated, in her affidavit dated January 14, 2008, Ms. Janice Vézina, the Associate Deputy Chief Electoral Officer, Political Financing, and Chief Financial Officer in the Office of the Chief Electoral Officer of Canada, explained that in addition to the grounds of refusal already mentioned, Elections Canada was concerned with the lack of “documentary evidence that could assist in establishing the existence of a contractual arrangement [between] any of the participating candidates in the media buy program [and] the supplier (RMI) for the purchase of the advertising”.
[54] Moreover, Ms. Vézina highlighted the fact that the respondent, in coming to his decision, manifestly considered two important “contextual elements”:
(a) One was the fact that the content of the advertising itself did not directly promote the candidates who were claiming the expense. As such, the ads failed to dispel the doubts that had already been raised as to whether the expenses were truly expenses of the candidates’ campaigns;
(b) The other was the fact that the Party was close to its authorized spending limit under the Act, such that it could not claim the ads as a part of its expenses without overspending.
[55] At this point it should be mentioned that the Commissioner is currently investigating whether or not the Party or Fund incurred expenses exceeding their election expenses limit contrary to paragraphs 497(1)(1) and 497(3)(g) of the Act, in addition to whether, contrary to subparagraph 497(3)(m)(ii), the Fund filed an election expenses return that it knew or ought to have known contained a materially false or misleading statement.
[56] As part of this investigation Ronald Lamothe, Assistant Chief Investigator for the Office of the Commissioner of Canada Elections, made an ex parte application to the Ontario Superior Court of Justice for a search warrant pursuant to section 487 of the Criminal Code, R.S.C. 1985, c. C-46.
[57] This application was granted on the basis of an Information sworn by Mr. Lamothe, and a search warrant was issued enabling the search of the offices of the Party and the Fund. The search
was executed April 15 and April 16, 2008, and some 22 boxes of documents and a number of hard drives were seized.
[58] This being said, the Court was informed by counsel at the hearing that the Commissioner’s investigation, which commenced more than two years ago, is still on-going. There has been no formal accusation brought by the DPP under the Act against either the Party or the Fund.
IV – THE PRESENT PROCEEDING
[59] Subject to section 28 of the Federal Courts Act, R.S.C. 1985, c. F-7 (the FCA), the Federal Court has exclusive original jurisdiction to issue an injunction, writ of certiorari, writ of prohibition, writ of mandamus or writ of quo warranto, or to grant declaratory relief, against any “federal board, commission or other tribunal” exercising powers conferred upon them by an Act of Parliament (sections 2 and 18 of the FCA).
[60] This supervisory role of the Court extends beyond formal decisions; it encompasses the examination of the legality of a diverse range of administrative actions, including those that maybe taken by the respondent under Part 18 of the Act: Rae v. Canada (Chief Electoral Officer), 2008 FC 246 at paragraph 13 (Rae); Stevens v. Conservative Party of Canada, 2004 FC 1628, aff d 2005 FCA 383 (Stevens).
[61] The question that is now before this Court is whether the respondent can legally refuse to certify for the purposes of reimbursement under section 465 of the Act, the claimed advertising expenses on the ground that he is not satisfied that these expenses have actually been incurred by the applicants or the candidates for whom they act as official agents.
[62] The applicants are requesting from the Court, a writ of mandamus to force the respondent to deliver new certificates to the Receiver General, which include the claimed advertising expenses, and/or a writ of certiorari to set aside the impugned decisions either with or without directions for the respondent.
V – STANDARD OF REVIEW
[63] Mandamus is a remedy used to compel the performance of a public legal duty. In order for the Court to grant an order of mandamus, there must exist a legal public duty to act; the duty must be owed to the applicant; the Court must be satisfied that the applicant has a clear right to the performance of that duty; there must be no other adequate remedy available; the order must be of some practical value or effect; there must be no equitable bar to the relief sought; and, the balance of convenience must warrant the issuance of the order: Apotex Inc. v. Canada (Attorney General), [1994] 1 F.C. 742 at paragraph 45 (C.A.), aff d [1994] 3 S.C.R.1100 (Apotex).
[64] As such, the issuance of a writ of mandamus writ does not require the determination of the appropriate standard of review. When a decision must be made, mandamus will apply even if there is discretion as to how the decision can be decided. For example, mandamus is still available where the decision-maker has fettered his or her discretion by relying upon irrelevant considerations or otherwise acting contrary to law: Donald J.M. Brown, Q.C. and the Honourable John M. Evans, Judicial Review of Administrative Action in Canada, vol. 1 (Toronto: Canvasback Publishing Inc., 2009) at paragraph 1:3230 (Brown & Evans); Apotex, above, at paragraph 45.
[65] If the test for a mandamus set out in Apotex, above, is met, this Court must issue the order. In certain circumstances, certiorari can be combined with mandamus because when a decision has already been made, it may be necessary not only to quash that decision, but to force the decision-maker to take specific action: Brown & Evans, above, at paragraph 1:3300.
[66] In the case at bar, if the conditions for the issuance of a writ of mandamus are not met, the applicants nevertheless seek an order in the nature of certiorari to set aside the impugned decisions.
[67] With regard to the writ of certiorari, the applicants argue that the CEO has no discretion under section 465 of the Act to review or consider the accuracy of an electoral campaign return filed by or on behalf of a candidate pursuant to section 451. The applicants suggest that the applicable standard of review is that of correctness and therefore, this Court ought to issue a writ of mandamus requiring the respondent, in accordance with section 465 of the Act, to issue a certificate that includes the claimed advertising expenses to the Receiver General.
[68] On the contrary, the respondent argues that the CEO has the discretionary power to conduct a simple audit, a complete audit, or to conduct no audit at all. When the CEO chooses to audit, his decision must be reviewed on a reasonableness standard. This is so, particularly because of the expertise of the CEO and the nature of the question, namely mixed fact and law.
[69] There is no privative clause in the Act preventing the Court from examining the legality of a refusal by the CEO to certify claimed election expenses. Whether or not an expense should be certified for reimbursement by the Receiver General is not a polycentric question; such a determination can only be made on a case by case basis and after an examination of the evidence submitted by each campaign.
[70] The scope and interpretation of section 465 of the Act, which is a jurisdictional provision, is a pure question of law and should be subject to a standard of correctness. Whether or not a particular expense claimed by a candidate or a registered party is an election expense eligible for reimbursement is a question of mixed fact and law. First, the CEO must interpret subsection 407(1) (the definition of election expense), and then, he must apply this definition to the facts.
[71] As noted in Democracy Watch y. Campbell, 2009 FCA 79 at paragraph 21 (Democracy Watch), unless there is an extricable question of law, questions of mixed fact and law are generally reviewed on the same standard as questions of fact, namely reasonableness. However, where there is an extricable question of law, depending on whether the question is one of central importance to the legal system or outside the scope of the decision-maker’s powers, the question may be reviewed on either a standard of correctness or a standard of reasonableness. (Democracy Watch at paragraph 22).
[72] In the present application, the respondent's decision to refuse to certify the claimed advertising expenses for reimbursement pursuant to section 465 of the Act necessarily includes an interpretation of election expense as provided in subsection 407(1). The interpretation of each element mentioned in subsection 407(1) is an extricable question of law. The overall interpretation of subsection 407(1) and its related provisions is of central importance to the legal system. Moreover, the CEO does not possess a relative expertise over the Court in interpreting the financial provisions contained in Part 18 of the Act. This is implicit from the comments made and the general approach taken by the Federal Court of Appeal in Stevens v. Conservative Party of Canada, 2005 FCA 383 at paragraph 26 (Stevens II). Therefore, the respondent's interpretation of subsection 407(1) and its related provisions is subject to review on a standard of correctness. That said, the application of this interpretation to the facts, is subject to review on a reasonableness standard.
[73] A reasonableness review involves the determination of whether a decision falls within a range of possible, acceptable outcomes that are defensible with regard to the law as well as the evidence that was before the decision-maker at the time the decision was made (Dunsmuir v. New Brunswick, 2008 SCC 9 at paragraphs 46 and 47 (Dunsmuir)).
[74] The facts will differ from case to case. In practice, however, a decision by the CEO to certify claimed expenses comes with no reasons, no explanation and no context. Indeed, at the time the impugned decisions were made, the respondent had already accepted to certify the claimed advertising expenses of 17 candidates who participated in the RMB program. In the case of the respondent's refusal to certify the claimed advertising expenses of the other 50 candidates who participated in the RMB program, including the applicants, the reasons given by the respondent are minimal, to say the least. The letters sent by the respondent hardly permit the Court to follow the reasoning that led to the refusals in question.
[75] With respect to the existence of a “tribunal record,” the Court is left in this case with only the Candidate Contact Log. Summary (Log), pertaining to the two candidates for which the applicants were acting as official agents, and the documentation submitted by the applicants or by the Party on their behalf. Unfortunately, the Logs do not help the Court determine what could have been the specific reasons, if there were any, to exclude the claimed advertising expenses for the purpose of reimbursement.
[76] No deference should be shown to the respondent or any other Elections Canada personnel with respect to the interpretation of the Act. Provided that the requirements mentioned in section 465 are met, the respondent has no discretion to exclude from certification any expense actually incurred by a candidate that constitutes an “election expense” under section 407.
[77] In view of the foregoing, with respect to the legality of the respondent’s refusal to certify the claimed advertising expenses on the ground that there is insufficient documentation or proof on record establishing that these expenses had actually been incurred by the applicants, the Court must consider the circumstances surrounding the RMB program, as well as the facts which are particular to the applicants’ situations.
[78] As stressed by this Court in Eli Lilly and Co. v. Apotex Inc., 2009 FC 991 at paragraph 364, “[s]tandards of review are neither useful nor designed to address situations where the evidentiary record before the Court is different than the one before another decision-maker.” This is the case in the present application, since both the applicants and the respondent have submitted extensive material and evidence which were never before the decision-maker.
[79] Thus, the legality of the impugned decisions must be assessed as if this were a proceeding
de novo.
VI – SCOPE OF THE CHIEF ELECTORAL OFFICER'S DUTIES UNDER SECTION 465 OF THE ACT
[80] As their first proposition, the applicants submit that the respondent is under a legal duty to certify the claimed advertising expenses under section 465 of the Act. According to the applicants, the decision to certify is not a discretionary one; the respondent must simply verify that the documentation referred to in section 451 has been submitted by the candidate and his or her official agent.
[81] In this regard, the applicants submit that the respondent has no jurisdiction to commence an audit into the accuracy of the information contained in the electoral campaign returns; nor does he have the power question the authenticity of any document supporting a claim for reimbursement. The investigating powers of the respondent under section 465 of the Act, if any, amount to “a document review, and nothing more.”
[82] Even in the face of a false document, the applicant asserts that the respondent is required to certify the expense for reimbursement. The only recourse available to the CEO under such circumstances would be his ability to refer the matter to the Commissioner who, unlike the CEO, is empowered to conduct investigations and pursue the prosecution of a candidate and/or his official agent.
[83] According to the respondent, the primary issue in this case is whether it was reasonable for the CEO, in light of the circumstances before him, to decide that the candidates did not incur the election expenses in question. A secondary issue, the respondent submits, is the basis of allocation (or lack of) used by the applicants and the Party in general, to distribute the cost of the RMBs.
[84] The respondent argues that the CEO has the discretionary power to conduct a simple audit, a complete audit, or to conduct no audit at all. Elections Canada's audit process relies on the self-reporting system created by the Act. When an electoral campaign return and its supporting documentation submitted by the official agent and the candidate are in order, the audit process can be relatively straightforward.
[85] However, if a “red flag” is raised in the course of the review of the return, this can result in a higher level of scrutiny that requires additional audit steps to be undertaken. This is what happened in the case at bar according to the respondent.
[86] The Elections Canada audit process for the 2006 election involved the review of electoral campaign returns for over 1,600 candidates. As of January 2008, registered parties had received some 27 million dollars in reimbursement of election expenses, while reimbursement to candidates totalled nearly 24 million dollars.
[87] In the case of 17 of the official agents for Conservative candidates who participated in the RMB program, their electora