Item - 2021.EA8.2

That:

1.  The Compliance Audit Committee has considered the request from the Respondent’s lawyer to have the Respondent’s home address be redacted from all documents submitted in this matter.

 
2.  The Applicant was also provided an opportunity to respond and has made submissions. The Applicant did not object to the request.

3.  The Committee has a strong interest in ensuring that hearings are open to the public. However, the principle of open hearings must be balanced with the competing interest of protecting privacy and security of any person. In this matter, removal of the Respondent’s home address from the materials causes no prejudice to the Applicant or members of the public.
 

4.  In accordance with subsections 9(1) and 9(1.1) of the Statutory Powers Procedure Act the Committee has determined that the street address and postal code of the Respondent be redacted from any hearing document and kept confidential.

1:56 p.m. - That the Compliance Audit Committee recess its public session to meet in closed session to consider Item EA8.2 - Compliance Audit Application by Roland Lin for the Election Campaign Finances of Nick Mantas to receive advice that is subject to solicitor-client privilege.

The Compliance Audit Committee reject the application of Roland Lin for a compliance audit of the Election Campaign Finances of Nick Mantas.

1. The Compliance Audit Committee met on July 21, 2021 to hear Item EA8.2 the Compliance Audit Application of Roland Lin for a compliance audit of the Election Campaign Finances of the Respondent, Nick Mantas.

 
2. The Applicant provided the Committee oral and written submissions related to the Application.
 

Procedural History

3. As a preliminary and procedural matter, the Applicant filed his application on June 24, 2021 and the Respondent replied to those submissions on July 16, 2021. The Applicant then filed additional written submissions later in the day on July 16, 2021 – three business days prior to the hearing. The Respondent was able to file a response to the Applicant’s additional submissions by July 20, 2021. The Compliance Audit Committee met on July 21, 2021.

 
4. During oral submissions, the Applicant did not identify any new information that came to his attention after he filed his initial written submissions. It is unknown why the Applicant did not make all of his written submissions concurrently. The Committee is hesitant to permit such last minute filings; however, nothing appears to turn on these submissions, the Respondent has not requested an adjournment to respond to them (which would have been granted to July 24, 2021), and the Respondent was able to prepare an adequate response to the additional submissions prior to today’s hearing.

 
Issues raised by the Applicant

5. Through his written and oral submissions, the Applicant raised thirteen claims relating to the Respondent’s compliance with the Act. They are as follows:

i. The Respondent received a contribution of goods in the form of used “rebars” in order to avoid the campaign contribution limits and failed to include receipts of the said contributions in preparing his financial statement;

 
ii. Endorsements received by the Respondent constituted a contribution of services that should have been reported in his financial statement;

 
iii. That trade discounts on three Canada Post invoices constituted a corporate contribution to the Respondent’s campaign;

iv. The Respondent failed to disclose approximately $20,000 of campaign brochure printing and distribution costs as campaign expenses;

 
v. The Respondent converted personal / home services from Telus into campaign office expenses;

 
vi. The Respondent failed to disclose the full cost of campaign sign expenses;

 
vii. The Respondent accepted donations from supporters via their credit cards and these supporter payments amount to loans to the Respondent’s campaign from the credit card companies;

 
viii. A contribution from a supporter of the Respondent was incorrectly assigned to another family member of the supporter;

 
ix. It is unknown whether a consultant cashed a bank draft provided as payment for consulting services;

 
x. The Respondent did not provide the bank statements for his campaign account;

 
Additional Submissions

xi. A corporate consultant provided services to the Respondent and a different corporate consultant provided services to another candidate in Ward 22 and this was improper because the corporate consultants shared a director;

 
xii. The Applicant suggested that the Respondent along with another Ward 22 candidate contravened the campaign spending limits by using the unsuccessful candidate’s campaign spending budget for the Respondent’s own campaign; and

 
xiii. The Respondent failed to remit expense receipts with his financial statement.

  
6. The Committee then provided the Respondent an opportunity to reply to the Applicant’s allegations.
 

The Legal Standard

7. Section 88.33 (1) of the Municipal Election Act states:

(1) An elector who is entitled to vote in an election and believes on reasonable grounds that a candidate has contravened a provision of this Act relating to election campaign finances may apply for a compliance audit of the candidate’s election campaign finances.

 
8. A belief on “reasonable grounds” has been interpreted by the courts to mean an objective belief based on compelling and credible information, which raises the reasonable probability of the breach of the statute (see Lyras v. Heaps, 2008 ONCJ 524 at para 25).

Analysis

9. The Committee has considered the oral and written submissions in light of the Act and applied the “reasonable grounds” standard noted above.

 
10. For the following reasons, the Applicant’s application for a compliance audit is rejected:

i. The Applicant obtained a quote for the used “rebar” and included this amount in his financial statement.

 
ii. Endorsements are not prohibited by the Act and are not assigned a value, and therefore are not included in the Respondent's financial statement.

iii. Corporate contributions are not allowed. Normal trade discounts available to the public do not constitute a corporate contribution and therefore are not required to be included in a candidate’s financial statements. In his oral submission, the Applicant agreed that normal discounts available to the public would not considered to be a corporate contribution.

 
iv. The Respondent spent approximately $28,000 on printing and postage. The Applicant identified an unreported discount provided by a printer to the Respondent in the amount of approximately $200.  The Committee is of the opinion that this unreported discount is de minimis and it would be inappropriate to grant a compliance audit at significant expense to the taxpayers of the City of Toronto based upon this de minimis unreported discount.

v. There is no evidence before the Committee that the Respondent converted personal or family phone lines and services for campaign purposes.

 
vi. The Respondent correctly included expenses related to signs, including the used "rebar", in his financial statement.

 
vii. The Committee is of the view that donations by credit card do not amount to a loan by the credit card company to the Respondent. The Act does not prohibit a member of the public from procuring a loan to donate to a candidate.

 
viii. The Respondent provided a reasonable explanation that the contribution was from Wendy Bishop and not from Steven Bishop. Regardless, the donations combined did not exceed the contribution limit under s. 88.9 (1).

 
ix. There is no requirement for the Respondent to prove that the recipient of the bank draft deposited the funds to their account.

 
x. There is no requirement in the Act for the Respondent to disclose his bank statements with his financial statement.

 
xi. It is not improper for two separate corporate consultants (who have a common director) to provide services to different candidates running for office in the same ward.

 
xii. The Applicant did not provide any evidence to support his allegation that the Respondent colluded with another candidate to improperly exceed the spending limits. 

xiii. The Respondent is required to keep receipts of every expense; however those receipts are not required to be included with his financial statements (see s. 88.22 (1) (h)).
 

Conclusion

11. For the reasons stated above, the Committee rejects the Applicant’s application for a compliance audit of the election campaign finances of Nick Mantas, in accordance with s. 88.33 (10) of the Act.