OTTAWA - In a seemingly bizarre political lawsuit, Stephen Harper's Conservatives are taking Elections Canada to court to force the electoral watchdog to accept a $591,000 cheque from the federal party.
But the latest court battle between the governing Tories and Elections Canada may not be as self-defeating, or altruistic, as it first appears.
If successful, the cash-flush Conservatives would both increase their election campaign spending limit and ensure their poorer Liberal opponents have to refund a similar -- if not larger -- six-figure sum.
A Tory win in the case could also reduce the amount by which the party exceeded its 2006 campaign spending limit -- should the party lose another court case with Elections Canada over the so-called "in and out" ad-buying practice.
The latest battle centres on GST rebates the Tories and Liberals received from the Canada Revenue Agency for the 2004 and 2006 elections. Those refunds arrived because political parties are considered non-profit organizations and thus can claim half their GST costs.
Using a precedent set by an Elections Canada ruling against the former Progressive Conservative party following the 1993 election, the Conservatives argue that after-the-fact GST rebates from the tax department effectively reduced their campaign expenditures for 2004 and 2006.
The Tories argue that meant they received a bigger reimbursement from Elections Canada than they were entitled to under rules that provide public subsidies calculated as a percentage of a party's total election expenses.
Kevin Gaudet of the Canadian Taxpayers Federation said the battle is a perfect example of political parties and Elections Canada "all playing weird games with taxpayers' money -- and we're the ones who get screwed from every which way."
"There's a long list of peculiar political subsidies that apply in a number of different ways," he said. "It's hard to keep track of them all."
The Tories offered to refund just over $700,000 to Elections Canada last summer -- just before the prime minister called a snap election -- while also proposing they be permitted to discount further anticipated GST rebates from their campaign spending in advance.
"We are prepared to dispatch a cheque to you immediately," the party's chief financial officer wrote to Elections Canada on Aug. 26, 2008, just 12 days before Harper sent Canadians back to the polls.
After discussions with Elections Canada, the party subsequently revised the amount it felt it owed to $591,117.40.
Marc Mayrand, Canada's chief electoral officer, didn't issue a ruling until last Dec. 2, when he rejected the Tory party proposal in a lengthy letter.
Mayrand wrote that the GST rebate, "like the reimbursement of election expenses under the Canada Elections Act, is intended as a form of support and does not serve to eliminate tax indebtedness."
Mayrand also said the proposed Tory change would make for an unlevel playing field by effectively boosting campaign spending limits for some parties but not others.
A spokesman for the New Democrats said the party has never applied for the GST rebate.
"(The Conservatives) obviously made a decision to apply for it and now they don't want it," said NDP spokesman Brad Lavigne.
The Liberals, in Sudbury, Ont., for their summer caucus where they threatened Tuesday to bring down the Harper government at the earliest opportunity, dismissed the Conservative suit as mischief.
"We're looking into it, but at first glance it smells of Tories continuing to play partisan games with our institutions," said Liberal party spokesman Dan Lauzon.
A Conservative party official said he could not comment as the issue is now before the courts.
