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Bill C-3

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    (b) being a registered party, contravenes subsection 375(3) or, being a registered party or an eligible party, contravenes subsection 374.1(4) , section 378, subsection 379(1) or (2) or section 380 (failure to comply with requirements re officers , chief agent, registered agents or auditor);

(2) Paragraph 497(3)(b) of the Act is replaced by the following:

    (b) wilfully contravenes subsection 381(1), (1.1) or (2) (ineligible person acting as officer , chief agent, registered agent or auditor);

    (b.1) being an officer of a party, contravenes section 381.1 (officer knowing party not a political party);

    (b.2) being a leader of a party, contravenes subsection 384.1(1), (3) or (4) (providing or certifying false or misleading information or making false declaration);

    (b.3) being a registered party or an eligible party, contravenes subsection 384.1(2) (providing false or misleading information);

    (b.4) being a member of a party, contravenes subsection 384.1(5) (making false declaration);

(3) Subsection 497(3) of the Act is amended by adding the following after paragraph (f.161):

    (f.162) being a person or entity, contravenes subsection 405.21(1) (soliciting or accepting contribution);

    (f.163) being a person or entity, contravenes subsection 405.21(2) (collusion);

22. (1) Section 501 of the Act is renumbered as subsection 501(1).

(2) Subsection 501(1) of the Act is amended by adding the following after paragraph (a):

    (a.1) if the offence results, directly or indirectly, in a financial benefit under this Act, or a contribution for which a receipt referred to in subsection 127(3) of the Income Tax Act was issued, pay to the Receiver General an amount that is not more than the financial benefit or contribution, as the case may be;

(3) Section 501 of the Act is amended by adding the following after subsection (1):

Additional penalties

(2) If a registered party, its chief agent or registered agent or one of its officers has been convicted of an offence referred to in subsection (3), the court may, having regard to the nature of the offence and the circumstances surrounding its commission, and in addition to any other punishment that may be imposed under this Act, by order,

    (a) direct the Chief Electoral Officer to deregister the party;

    (b) if it directs deregistration under paragraph (a), direct the chief agent - or another person specified by the court - to liquidate the party's assets; and

    (c) if it directs liquidation under paragraph (b), direct the financial agent of each registered association - or another person specified by the court - to liquidate the registered association's assets.

Offences

(3) For the purposes of subsection (2), the provisions are:

    (a) paragraph 497(3)(b.2) (providing or certifying false or misleading information or making false declaration);

    (b) paragraph 497(3)(b.3) (providing false or misleading information);

    (c) paragraph 497(3)(f.07) (failure to provide financial transactions return or related documents);

    (d) paragraph 497(3)(f.161) (entering into prohibited agreement);

    (e) paragraph 497(3)(f.162) (making representation re contribution);

    (f) paragraph 497(3)(f.163) (collusion);

    (g) paragraph 497(3)(i) (failure to provide financial transactions return or related documents);

    (h) paragraph 497(3)(k) (providing financial transactions return containing false or misleading statement);

    (i) subparagraph 497(3)(m)(ii) (providing election expenses return containing false or misleading statement); and

    (j) paragraph 497(3)(v) (providing electoral campaign return containing false or misleading statement or one that is incomplete).

Documents to be provided to Chief Electoral Officer

(4) The chief agent or specified person shall, within six months after being directed to liquidate the party's assets under subsection (2), provide to the Chief Electoral Officer

    (a) a statement - prepared in accordance with generally accepted accounting principles - of the fair market value of the party's assets and liabilities on the day of the order;

    (b) a report by the party's auditor to the chief agent or specified person containing the auditor's opinion as to whether the statement presents, in accordance with generally accepted auditing standards, the fair market value of those assets and liabilities; and

    (c) a declaration in the prescribed form by the chief agent or specified person concerning that statement.

Remittance to Receiver General

(5) Within three months after providing the documents referred to in subsection (4), the chief agent or specified person shall remit an amount equal to any net balance of the assets over liabilities, calculated on the basis of the statement mentioned in paragraph (4)(a), to the Chief Electoral Officer who shall forward that amount to the Receiver General.

Liability of chief agent

(6) The chief agent or specified person is liable for the remittance of the amount referred to in subsection (5).

Application to registered associations

(7) Subsections (4) to (6) apply to the liquidation of a registered association's assets under subsection (2) and any reference in those subsections to ``party'' and ``chief agent'' shall be read as a reference to ``registered association'' and ``financial agent'', respectively.

23. The Act is amended by adding the following after section 521:

Deregistration

Notice to party

521.1 (1) If the Commissioner has reasonable grounds to suspect that a registered party does not have as one of its fundamental purposes participating in public affairs by endorsing one or more of its members as candidates and supporting their election, the Commissioner shall, in writing, notify the party that it is required to show that that is one of its fundamental purposes.

Court application

(2) If, after giving the party a reasonable opportunity to show what its fundamental purposes are, the Commissioner still has reasonable grounds to suspect that the party does not have as one of its fundamental purposes the purpose described in subsection (1), the Commissioner may apply to a court described in subsection 525(1) for an order described in subsection (3).

Order

(3) If the court is satisfied that the party does not have as one of its fundamental purposes the purpose described in subsection (1), the court shall, by order, direct the Chief Electoral Officer to deregister the party and it may

    (a) direct the chief agent - or another person specified by the court - to liquidate the party's assets; and

    (b) if it directs liquidation under paragraph (a), direct the financial agent of each registered association - or another person specified by the court - to liquidate the registered association's assets.

Onus on party

(4) The onus of satisfying the court that one of its fundamental purposes is the purpose described in subsection (1) is on the party.

Factors

(5) In making its decision, the court shall consider all of the factors relevant to determining the party's purposes, including, as applicable, the following:

    (a) the party's constitution, articles of incorporation, letters patent or by-laws or any other information that may indicate those purposes;

    (b) the party's political program, annual report to members, fundraising plan, advertising material and policy statements;

    (c) the nature and extent of the activities of the party and its registered associations and candidates, including the nature and extent of their involvement in electoral campaigns and any of their public statements in support of another political party or a candidate of another political party;

    (d) the funds received by the party and its registered associations and candidates, their sources and how they are used by the party, including as election expenses;

    (e) interactions of the party with other entities that are not recognized political parties under the laws of any province that may indicate that it is under the control, direct or indirect, of another entity or that the party is using its status as a registered party primarily for the purpose of providing financial assistance to another entity; and

    (f) whether the party is a non-profit entity.

Exemption

(6) If, in the court's opinion, the public interest and the need to ensure fairness of the electoral process warrant it, the court may, on application, exempt the party and its registered associations from the application of subsection 127(3.3) of the Income Tax Act. If an exemption is granted, the court may impose any conditions on the activities of the party, registered association or candidate that it considers appropriate.

Liquidation

(7) If a chief agent, a financial agent or a person specified by the court is, under subsection (3), directed to liquidate, they shall carry out the liquidation in accordance with subsections 501(4) to (7).

24. The Act is amended by adding the following after section 536.1:

Considera-
tion of registration requirements

536.2 After the submission to the House of Commons of a report under section 535 in relation to the first general election following the coming into force of this section, any committee of that House to which the report is referred shall, in addition to considering the report, consider the effects of the other provisions of this Act that came into force on the same day as this section.

R.S., c. 1 (5th Supp.)

INCOME TAX ACT

25. Section 127 of the Income Tax Act is amended by adding the following after subsection (3.2):

Prohibition - issuance of receipts

(3.3) If the Commissioner of Canada Elections makes an application under subsection 521.1(2) of the Canada Elections Act in respect of a registered party, no registered agent of the party - including, for greater certainty, a registered agent appointed by a provincial division of the party - and no electoral district agent of a registered association of the party shall issue a receipt referred to in subsection (3) unless the Commissioner withdraws the application or the court makes an order under subsection 521.1(6) of that Act or dismisses the application.

TRANSITIONAL PROVISIONS

Parties to perfect registration

26. (1) A party that is registered or eligible to become registered on the day on which this Act comes into force shall, within six months after that day, provide to the Chief Electoral Officer the information described in paragraphs 366(2)(d), (f), (i) and (j) of the Canada Elections Act, as enacted by this Act.

Requirements do not apply

(2) Subsection 369(2), section 374.1, paragraph 377(2)(b.1), sections 378 and 380.1 and subsections 382(4) and 384(3) of the Canada Elections Act, as enacted by this Act, do not apply - until six months after the day on which this Act comes into force - in respect of a party that is registered or eligible to become registered on that day.

Requirements continue to apply

(3) Subsection 369(2), section 378 and subsection 382(4) of the Canada Elections Act, as they read immediately before the day on which this Act comes into force, continue to apply - until six months after that day - in respect of a party that is registered or eligible to become registered on that day.

COMING INTO FORCE

Coming into force

27. (1) Subject to subsection (2), this Act comes into force on June 27, 2004 unless, before that day, the Chief Electoral Officer has published a notice in the Canada Gazette that the necessary preparations for the bringing into operation of this Act have been made and that this Act may come into force accordingly.

Limitation

(2) If this Act receives royal assent on a day that is after June 27, 2004, it comes into force on that day.

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