Let the Municipal Elections Act Games Begin

November 2nd, 2010 by Iler Campbell LLP

With the recent municipal elections concluded, we can expect a number of applications under the Municipal Elections Act, 1996 (MEA) to investigate alleged election campaign finance irregularities.  The Good Government Act, 2009 introduced amendments to the MEA, most of which became effective on January 1, 2010, to address some of the election campaign finance issues that have arisen during and in the aftermath of the 2003 and 2006 municipal elections.

Prior to January 1, 2010, Section 81 of the MEA enabled an elector to request that municipal council order a compliance audit of a candidate’s campaign finances.  If a compliance audit was ordered and revealed contraventions of the MEA, council was empowered to commence proceedings for offences under the MEA.

The potential effects of such actions were demonstrated by the defeats of former Hamilton mayor Larry Di Ianni in 2006 and former Vaughan mayor Linda Jackson in 2010, no doubt due at least in part to the proceedings commenced against both in relation to alleged contraventions of the MEA uncovered by compliance audits.

The potential political implications of a compliance audit request aside, the purpose of such provisions is for citizen-electors to be able to ensure transparency and accountability in campaign finances.  This goal is difficult to achieve if the elected council is the arbitrator of the alleged offence, however.  Councillors will be reluctant to order a compliance audit against one of their own, if the impugned candidate was elected to council.

As of January 2010, the MEA was amended in some significant ways. While under the former MEA a municipality could establish a Compliance Audit Committee (Committee) to determine the claim, it was not mandatory to do so and many, if not most municipalities, did not appoint such arm’s length committees.

The MEA now requires that every municipality appoint a Committee by October 1 of an election year, and stipulates that the Committee cannot include municipal councillors, candidates in the election for which the Committee is established, or officers or employees of the municipality. The result should be a compliance audit request process that is fairer to electors and candidates alike.

In the case of former Toronto Councillor Heaps, an elector brought an application alleging election finance irregularities against Mr. Heaps after the 2006 election.   The City of Toronto had established a Compliance Audit Committee and the Committee heard and dismissed that application, which the elector then appealed to the Ontario Court of Justice.

The fact of the Committee’s involvement in this case (and two others at the City of Toronto) distinguished it from all prior appeals to the Ontario Court of Justice under MEA, and likely played a factor in the Court’s decision not to interfere with the decision, as the court determined that those committees, specialised arm’s length bodies, ought to be paid deference in their decision making role.  That case and a related decision may also have played a role in the legislature’s decision to amend MEA to require that compliance audit committees be appointed by municipalities.

Another significant amendment to the MEAis the addition of s. 81(17), which provides that the compliance audit request process “does not prevent a person from laying a charge or taking any other legal action, at any time, with respect to an alleged contravention of a provision of this Act relating to election campaign finances.” This addition appears to be in response to the ruling in Hall v. Jakobek, 2003 CanLII 45521 (Ont. Sup. Ct.).  In that case Mr. Jakobek laid an information in provincial court alleging campaign finance improprieties against Ms. Hall, when both were vying for the Mayor’s job in Toronto.

In Jakobek, the court held that only a municipal council, following a compliance audit of a candidate’s campaign finances, may commence a legal proceeding against a candidate.  Now, it appears a private citizen may lay an information against a candidate at any time for an alleged violation of the campaign finance provisions, notwithstanding the compliance audit request process.

Depending on your point of view, this is either a good or bad amendment, as it now allows a by‑pass of MEA.  One could consider this empowers citizen-electors, or alternatively, that it emboldens political gamesmanship, by making it easier to attack councillors and candidates for the purpose of affecting their prospects in an election campaign.   Given that these provisions appear to be used for political motives at least some of the time, we are left to wonder if this amendment is fair to candidates, given the barriers that already exist for people seeking to run for office, and given the limited consequences to those who bring even meritless claims.

Another option is to amend the legislation to provide for a “leave” test prior to allowing an application to be heard by the compliance audit committee, or at least, prior to permitting appeal to the Ontario Court of Justice.  This would screen out applications that are completely meritless – as was the case with the application against Mr. Heaps.

Alternatively, there could be greater consequences than currently exist for those who bring the meritless claims.   Right now, only if an audit is ordered and reveals nothing, may the City Council seek to recover the costs of the audit from the applicant.  Costs cannot be recovered against an unsuccessful applicant at the compliance audit committee stage, and may not be recovered even at the appeal stage.  Yet, even if the claim is  meritless, the accused candidate may incur significant legal fees to defend the allegations.

Iler Campbell lawyers Paula Boutis and Karen Dawson have represented both applicants and respondents in applications under the Municipal Elections Act, 1996 alleging campaign finance irregularities.

Filed in: Elections Law

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