07/03/2012 05:24 EDT | Updated 09/02/2012 05:12 EDT

Liberal Leadership Campaign Expenses: Court Rejects Candidates' Pleas For Extension


OTTAWA - A top Ontario court has rejected requests from three failed Liberal leadership candidates for extensions to pay their 2006 campaign expenses.

Hedy Fry, Martha Hall Findlay and Joe Volpe are still tens of thousands of dollars in debt following their campaigns to lead the Liberal party.

An Ontario Superior Court justice has ruled they're not allowed any more extensions to come up with the cash.

In a judgment last week and posted Tuesday, Justice Timothy Ray said there were no reasonable grounds to give the three candidates more time.

He noted they were supposed to cover their debts within 18 months of the leadership convention, and had already been granted two extensions — first by Elections Canada and then by another Superior Court judge.

They were given until Dec. 31 last year to pay.

In his ruling, Ray sided with Elections Canada that there is no jurisdiction to allow yet another extension.

"In any event, I am not satisfied that the applicants have demonstrated an inability to comply," Ray wrote.

In the introduction to his ruling, he said the three are "in breach of the Canada Elections Act."

Elections Canada says its commissioner now will have to decide next steps.

"Elections Canada will review the court's decision," said spokeswoman Diane Benson. She would not say how much time it would take for the commissioner to make his next move.

Failure to pay within the required time frame can bring a fine of $1,000 or up to three months in jail.

But Hall Findlay said she believes she can work out a compromise with Elections Canada.

She has been able to raise some money, but much of it is not eligible for her leadership expenses from 2006. That's because under a rule imposed retroactively by the Conservative government, each donor was only allowed to donate $1,100 one time only in a leadership campaign.

That's a third of the amount that was allowed when the leadership campaign actually took place.

"There's an inherent unfairness. You can't change the rules midstream," said Volpe in an interview, adding that his lawyer is contemplating an appeal.

Hall Findlay says there is now widespread recognition that that rule is out of step with other political donation rules, and the Conservatives are planning to change it soon so that the contribution limit is renewed every year — instead of just once during a leadership campaign.

"Everybody recognizes that it is an anomaly and it should be fixed," she said in a telephone interview.

"The net result for us is, there are a number of avenues we will be pursuing, including working out something with Elections Canada."

A Conservative party spokesman said there was nothing unfair about the donation rules because Liberals knew full well that they were in flux, even in the midst of their leadership campaign in 2006.

"These failed Liberal leadership candidates should play by the same rules as everyone else," Fred DeLorey said in an email.

Hall Findlay said she is "seriously considering" another leadership bid, and will decide for certain in the fall. But she does not see the debt issue from the last leadership campaign standing in her way.

As of last December, she still owed $115,000 but has since raised $50,000.

And money is now pouring into her campaign, especially since she recently argued in favour of ending supply management for agriculture.

But Hall Findlay still has to persuade Elections Canada that those donations should count toward her outstanding expenses.

The court documents show that she had paid only $15,260 over the course of 2010 and 2011.

Fry still owed $69,000 as of the end of 2011, and Volpe owed $110,090.

Volpe said he has had trouble coming up with the amount because he is no longer an elected member of Parliament, and because the last two years have been difficult for fundraising.

Fry was travelling and not immediately available for comment.