Elections Canada

Elections Canada

What Happened

Marc Mayrand was appointed Chief Electoral Officer of Elections Canada on February 21, 2007. The Conservative government and Elections Canada under Marc Mayrand have clashed on a number of issues in recent years. These issues have led to attacks on the credibility of Elections Canada, resulting in two federal court cases. The Conservative Party has alleged that Marc Mayrand has overstepped his bounds, while Mayrand has claimed that the Conservative Party has bypassed the rules set out in the Canada Elections Act.


In preparation for the 2006 federal elections, the Conservative Party had almost reached the maximum election expenses of $18.3 million permitted under the Canada Elections Act. As such, the Conservatives developed a scheme to bypass that maximum. This became known as the ‘in-and-out’ scheme.

The ‘in-and-out’ scheme operated as follows: the Conservatives’ national headquarters would transfer money to individual candidates’ bank accounts, and then have that same contribution transferred back to the national headquarters on the same day. This money, which had just gone in-and-out of the individual candidates’ account, would then be used to purchase media advertising.

The rationale for this scheme was that the individual candidates could claim the money that went in-and-out of their account as a campaign expense. After participating individual candidates remitted the money to the Party national headquarters, these candidates then entered that same money as an election expense. This would ‘create money’ for the Party, in that individual candidates could claim taxpayer rebates for 60 per cent of these supposed election expenses.

In addition, this pooled money from individual candidates came exclusively from candidates who had not reached their own election expenditure limit. This allowed the national Party to use individual candidates' spending limits for national advertising campaigns, thus bypassing the $18.3 million national Party campaign cap. The pooled money became known as a “regional media buy” program.

The advertisements that were run under this “regional media buy” program were identical, promoting the national Conservative Party and neglecting to mention any local issues, save for a tag line stating that the local agent for the Party had approved of the advertisement. This raised questions as to whether these advertisements could be categorized as individual candidates’ electoral expenses, or they circumvented the national Party headquarters’ maximum election expenses limit.

These “in-and-out” transactions, going in-and-out of the individual Conservative candidates’ accounts, and right back to the national Party’s coffers for a national advertising campaign, were done by election candidates across the country. In all, 67 Conservative candidates participated, sending their expenses to Elections Canada for the 60 per cent taxpayer rebate. In total, the Conservatives are accused of overspending by some $1.2 million.

This issue gained attention when, in April 2007, the Conservatives filed for taxpayer rebates totaling some $780,000 from Elections Canada, and they were refused the rebates. Marc Mayrand, Chief Electoral Officer of Elections Canada, maintained that there was no proof that the riding’s local advertising expenses, which were almost identical to national advertisements, were actually meant for the local campaigns. Elections Canada claimed that there was no evidence that the costs for the advertisements were legitimately incurred by the candidates rather than the national party.

This issue became a full-fledged scandal for the Harper government. At one point when pressed by the media regarding the "in-and-out" affair, PMO officials fled down a hotel fire-escape stairwell to avoid the questions.

The disagreement between Elections Canada and the Conservative Party resulted in two legal cases.

Legal case 1: Elections Canada decision was reasonable

First, in May 2007, official agents for two Conservative Party of Canada (the Party) candidates Robert Campbell and Dan Mailer challenged the legality of Elections Canada’s decision to refuse certain electoral expenses related to advertising. The Conservative agents claimed that the advertising expenses were entirely legal and that Mayrand had unfairly singled them out. Stephen Harper directly challenged Elections Canada in an address, stating that it is "strange that Elections Canada had one practice for the Conservative party and one for other parties."

On January 18, 2010, a Federal Court judge ruled in favor of the Conservatives, dismissing Elections Canada’s allegations that the Party circumvented the limit on electoral expenses, and ordered the agency to reimburse the individual Conservative candidates for their advertisement expenses. The judge decided that the Conservatives’ “in-and-out” plan fell within the confines of the law, but that “there is a fundamental distinction between legality and legitimacy. As far as the overall legitimacy of the ... program is concerned, this is a debatable issue, which is better left for public commentary and debate by all interested persons outside the courts.”

Both parties appealed the ruling.

In February 2011, the Federal Court of Appeal unanimously overturned the original decision, ruling that the Conservatives’ “in-and-out” scheme was not appropriate, and that Elections Canada had the authority to make that determination. The Conservatives’ motion to judicially review Elections Canada’s was dismissed. The Conservative Party stated they would seek leave to appeal that ruling in the Supreme Court. On October 20, 2011, the Supreme Court of Canada granted leave to appeal.

Legal Case 2: Four senior Conservatives charged

The second legal case was filed days before the Federal Court of Appeal’s ruling in favour of Elections Canada. Elections Canada brought four charges for allegedly breaking election law during the 2006 federal campaign. In November 2011, the Conservative Party pleaded guilty to charges that they had exceeded the maximum allowable campaign expenses, as well as having failed to file accurate expense records. Consequently, the Party was fined $52,000. Elections Canada dropped charges alleging that the Party and specific Senators had willfully exceeded the expense limit.

Relevant Dates

  • December 2005: The Conservative party develops a scheme to overcome election spending limits, later to be known as the “in-and-out” scheme.
  • April 2007: Mayrand refuses to reimburse Conservative candidates and denies them of rebates, which totalled $780,000.
  • May 2007: Conservative Party officials file a lawsuit against Elections Canada.
  • January 18, 2010: The Federal Court rules in favour of the Conservative party – Elections Canada and the Conservatives appeal the decision.
  • February 25, 2011: Elections Canada charges four senior Conservative officials, outside of the civil lawsuit case.
  • February 28, 2011: The Federal Court of Appeal rules against the Conservatives in the so-called “in-and-out” campaign financing case.
  • November 10, 2011: The Conservative Party pleads guilty to charges that they had exceeded the maximum allowable campaign expenses, as well as having failed to file accurate expense records.

Role or Position

Elections Canada is the independent, nonpartisan agency in charge of conducting federal elections and referendums. The agency reports directly to the Canadian Parliament, ensuring that the Canada Elections Act is administered with consistency.

Implications and Consequences

  • Democracy: Opposition parties have accused the Conservative Party of undermining democracy by disrespecting election laws.
  • Transparency: The Conservative Party’s contention that Elections Canada overstepped its bounds by verifying how election expenses is inconsistent with transparent government. If Elections Canada were unable to verify the nature of electoral expenses, then the agency would be relegated to merely ensuring that documents were filed—never to question or investigate any expense claims, and making the government less transparent.
  • Equality: Election spending limits ensure an equal platform for political parties, and the in-and-out scheme undermines this equality, favoring parties with the deepest coffers.

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