Tim Naumetz, THE CANADIAN PRESS

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OTTAWA - A lawyer for the Conservatives says freedom of expression for political candidates is at stake in a Federal Court case over $1.2 million worth of disputed party advertising in the 2006 election.

Michel Decary told the court Tuesday that even though the radio and television ads promoted the party's slogan for the election and Prime Minister Stephen Harper, it was legal under federal election law for local candidates to claim the expenses.

"Freedom of speech to address political issues is exported to the world of markets and branding," Decary told Judge Luc Martineau, urging him not to go too far interpreting the election law.

He said a ruling against the Conservatives could lead to federal election officials reviewing the content of candidate election advertising, encroaching into the area of free speech.

"My statement to the court is just to watch out how we deal with this and not go overboard," said Decary.

The question of whether the contested ads should have been claimed as expenses by the party or local candidates is one of several key issues in the two-year-old battle between Chief Electoral Marc Mayrand and the Tories.

An adverse ruling in Federal Court could put the party more than $1 million over its legal expense limit for the election.

Mayrand ruled in April 2007 that 67 Conservative candidates would not get reimbursements for the expenses. The elections agency argues the expenses were incurred by the party and the advertising was produced for its national campaign, which has a separate accounting system under the Canada Elections Act.

Decary argued there are no local issues in federal elections. Candidates legitimately entered agreements with the party to air the "Stand Up For Canada" ads in their cities and regions, he said.

An Elections Canada handbook for candidates expressly stated their advertising could support or oppose the election of candidates, leaders or political parties, Decary argued. Elections Canada changed the handbook in 2007 to limit advertising support or opposition to candidates only, saying the change expressed the intent of several sections of the act combined.

The content of the ads is only one aspect of the advertising controversy. Expenses are also under investigation by federal election commissioner William Corbett.