Court gives Conservative leadership candidate a new chance

An Ontario court has put another curve into the long and winding road of the Conservative leadership race, potentially adding a fifth candidate to the ballot with three months left in the contest.

In a ruling released early Wednesday, Ontario Superior Court Justice Paul Perell said longtime conservative activist Jim Karahalios can be a candidate, if he can meet certain criteria in the next 14 days.

Karahalios was disqualified in March, just before the deadline for candidates to register, a deadline that also came as the COVID-19 pandemic tightened its grip on Canada, forcing numerous revisions to the race.

He was booted after appealing a set of conditions placed on his remaining a contestant, which followed his campaign's controversial accusations about Erin O'Toole's campaign chair.

Walied Soliman, a prominent Toronto lawyer, worked years ago on the legalities of financing arrangements that satisfy Islamic restrictions on charging interest. Those restrictions are grounded in Islamic law, known as Shariah.

Karahalios used Soliman's past work, linked it with other more controversial interpretations of Islamic law, and issued a letter to supporters suggesting Soliman was promoting the use of Shariah law in Canada.

When he was criticized for that, his campaign put out a poster showing him being chased by a multiracial group wielding torches and bats.

The two instances were the subject of a complaint by the O'Toole campaign, which alleged Karahalios's campaign materials were racist and Islamophobic, hurt the party and violated the rules of the race.

Perell's ruling shed light on what happened next, laying out a detailed timeline of deliberations and rulings that followed in two stages.

First, a decision from the Conservatives' chief returning officer, Derek Vanstone, who said that despite the party's commitment to free speech, Karahalios crossed a line.

Vanstone stopped short of kicking Karahalios out of the race, instead setting out a series of conditions, including a $50,000 penalty and an increased compliance deposit of $150,000 to the party instead of the $100,000 required for other candidates.

Karahalios had to do all this in a week, with the contest deadline of March 25 fast approaching, and as fundraising opportunities vanished under COVID-19 restrictions.

Karahalios, who has long been popular among the party's grassroots in Ontario for successful political advocacy campaigns there, had been close to raising the $300,000 entry fee and had all the signatures of supporters he needed to run.

But raising the additional money would be tough, court heard. So, he appealed the conditions placed on him to a dispute resolution committee within the leadership race organizing team. And it, in turn, disqualified him.

Karahalios decided to take the party to court, arguing the decision was procedurally unfair and made in bad faith and that the dispute committee had no power to eject him.

In his ruling, Perell agreed neither the dispute committee nor the returning officer had the power to kick Karahalios out

"The authority to disqualify is reserved to the eighteen members of the (leadership organizing committee) which has never formally or properly considered the matter of Mr. Karahalios’ status as a candidate," he wrote.

The upshot, Perell said, is that Karahalios needs to do what he refused to do the first time: comply with the sanctions from the chief returning officer.

If he does so within 14 days, than he is a verified candidate in the race, Perell said.

In a statement Wednesday, Karahalios appeared to be thinking the issue over.

"I am currently reviewing the court's ruling to assess how I can best re-enter the race in a competitive manner that respects the court's ruling, the rules of the race as clarified by the court, and the will of Conservative party members," he said.

In his ruling, Perell said the full leadership organizing committee could still revisit Karahalios' candidacy.

Conservative party spokesman Cory Hann said the party was pleased the decision found the process afforded to Karahalios was fundamentally fair and there was nothing to the allegation there was bad faith on the part of party officials.

O'Toole's campaign said only that the matter was between Karahalios and the organizing committee.

Besides O'Toole, there are three other candidates in the race: Toronto lawyer Leslyn Lewis, Ontario MP Derek Sloan and former MP and cabinet minister Peter MacKay.

The party is now conducting the leadership election entirely by mail, with the ballots expected to be shipped out by early July. They must be back by Aug. 21, and the announcement of the winner is expected shortly after.

This report by The Canadian Press was first published on May 20, 2020.