Liberals aim to limit influence of foreign money on federal elections

Posted on March 15, 2018 in Governance Debates – Full Comment – The desire to get the legislation in place before the next election — and avoid any court challenges — means it is unlikely to go as far as some critics would like
March 14, 2018.   John Ivison

OTTAWA — The Liberal government hopes to have new rules aimed at limiting the ability of foreign money to influence Canadian federal elections in place before the 2019 vote.

Sources suggest the government will reform the Canada Elections Act by introducing measures to try to level the playing field between third parties and political parties, and improve the transparency of donations.

But the desire to get the legislation in place before the next election — and avoid any time-consuming court challenges — means it is unlikely to go as far as some critics would like.

The Public Policy Forum think-tank released Wednesday a paper on modernizing political financing in this country, which recommends eliminating foreign money from the process by allowing only eligible voters to make contributions.

The forum also advocates imposing the same contribution limits on third parties as for political parties, currently $1,575. (Third parties are people or groups producing election advertising who are not registered candidates, political parties or riding associations.)

The Liberals are heading in a similar direction, but probably not at the same speed as the forum and other advocates of reform would wish them to go.One government official said the increasing use of foreign money is “troubling” but limiting political contributions to eligible voters would block permanent residents and could lead to a court challenge.

The new legislation is instead likely to focus on improving transparency by requiring third parties to have a Canadian bank account, thus creating a paper trail, and to disclose the identity of their donors.

One recommendation by the Public Policy Forum that may be adopted is to extend campaign spending limits to six months before a fixed election date. Ontario has just extended spending caps to match the reality of a longer campaign period, including applying the limits to third parties. Ottawa looks set to follow suit.

In the new legislation, the government will also try to improve the transparency around social media.

The issue of foreign money wielded by political advocacy groups emerged in the 2015 election, when a total of 114 third parties were registered with Elections Canada, up from 55 in 2011.

Complaints by mainly Conservative candidates like former Calgary Tory MP Joan Crockatt claimed that election rules were broken by left-wing organizations such as Leadnow, using money donated from the New York-based Tides Foundation. (Leadnow said that no international money went toward its 2015 campaign and that it was in compliance with all Elections Canada guidelines.)

What all political parties acknowledge is that there is a loophole that means the rules on foreign donations are much more relaxed than they are for domestic donations.

As Sen. Linda Frum has said, we have 20th century rules regulating 21st century political activities.

We have 20th century rules regulating 21st century political activities

Canadians can donate only $1,575 to political parties and candidates, while union and corporate donations are banned completely.

But an unlimited amount of money can be received by a Canadian citizen or resident from foreign actors six months before an election writ is dropped.

Further, third parties are only regulated on the amount of election advertising they buy — $150,000 per campaign. But there are no limits on what they spend on polling, events, canvassing, social media and so on — expenses that are regulated for political parties.

The upshot is that we are increasingly seeing third parties behaving like political parties, yet being governed by a completely different compliance regime.

The concern is that U.S.-style political action committees will emerge, funded in part by foreign money, to influence federal elections.

This is already happening in a domestic context: a number of labour groups combined their resources to help boot the Conservatives during the last election.

But at least in that instance, it was Canadians trying to influence a Canadian election using Canadian donations.

Given the controversy surrounding allegations of Russian interference in the 2016 U.S. presidential election, it’s clear that foreign governments and NGOs see our system of governance as vulnerable.

It’s incumbent on the government to modernize Canada’s political financing laws by introducing robust restrictions on foreign influence before the next election campaign — as the Public Policy Forum put it, “the most sensitive moment in our democratic life.”

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