Party Financing in Canada: Perpetually New Challenges

Following the roundtable convened by the Public Policy Forum and Elections Canada on political financing in Canada in October 2017, participants were invited to write an article about their thoughts on the conversation.

By Pauline Beange, PhD, Instructor, University of Toronto

There is no self-evident answer as to how much money ought to be spent to contest an election. An election is, after all, the one time in four years when citizens are asked to collectively reflect, deliberate and evaluate which party and leader will most likely act in the best interests of Canadians over the next four years. The costs of access to information and the ability to communicate often highly emotional topics cannot be measured. Legislation and enforcement must be tight enough to inhibit undue influence but loose enough to accommodate emerging, legitimate methods of communication.

Canadian parliaments and the courts have determined that some regulation of spending, fundraising and reimbursing of expenses complies with the Canadian Charter of Rights and Freedoms. Current challenges for Canadian legislators and electoral oversight agencies are not ‘grand corruption’ or ballot-box stuffing but rather appropriate responses to more subtle and rapidly changing influences.  

A few items discussed at a recent roundtable will be examined here: 

• increasing advertising by ‘third-parities’ or non-party actors in federal and provincial elections
• foreign funds donated to third parties
• adequacy of current funding for political parties, candidates and local associations to communicate with a highly diverse electorate in a charged social media environment
• benefits and costs of more detailed disclosure of donor identities and faster online posting of donations by all actors

Several noted the increased number of third-party actors, the amounts spent and the spread of third-party activity into the pre-writ period in federal and provincial elections since 2006, when all union and business contributions to federal political parties were prohibited. The recent activities of third parties contest both the pre‑eminence of political parties and the suitability of regulating activities during the writ period but not those before the writ is issued. Before fixed election dates were introduced, pre-writ spending was generally not worth the cost. With a firm election date in hand, however, pre-writ spending in federal elections has become more advantageous in alerting voters to issues. A different source of concern arises from how and where third parties are deriving their funds. Canadian political parties, at the federal level, are prohibited from accepting foreign-source donations. By contrast, third-party actors or advocacy groups face no such constraint.

Current spending limits (and by corollary, contribution limits) for national parties may be insufficient for the task of communicating with a diverse electorate and an online media universe that may deliver ill-informed or ‘fake’ news. The per-vote subsidy for parties that ended in 2015 was apparently too generous and permitted parties to coast and be less accountable to their voter and donor bases; no speaker advised a re‑introduction of subsidies. Despite the prohibition of union and business donations to parties since 2006, there has been no appreciable rise in voter confidence. A viable option might be to permit 30% of national party revenues in any given year to come from business and union donations, which could be reported on a monthly basis. Understanding that less than a third of party revenue comes from business and union donations, parties might strive even harder to raise the remainder from individuals, stay accountable, and be highly transparent. These donations would no doubt be tracked closely by traditional and social media.

Current legislation contains varying reporting requirements for political entities and third parties. Standardized, faster disclosure for parties, nominees, candidates, local associations and third parties throughout an election campaign, rather than following, is an actionable policy alternative. Disclosure during the campaign would potentially address undue influence and voter frustration that too much reporting now appears too late for voters to take into account in their voting decision. Data entry on online, searchable databases should not pose an insurmountable problem to organizations. The timelines for disclosure contained in existing legislation appear outdated given real-time disclosure of events to which a media-savvy electorate has become accustomed.

Faster disclosure is inherently appealing and workable but there are concerns. First, Canadian political parties function with volunteers—a notable strength in comparison to political parties elsewhere. Reporting financial transactions should not require more paid staff by parties or electoral district associations. Second, individuals in certain ethnic groups are sensitive to having their names and addresses published because of in-group discrimination. Parliamentary debate could address these concerns.

Elections are a contest for power: elections will be hotly contested and that is a sign of a vibrant democracy. There is no system of financing parties that is neutral to all political actors. Legislators and the courts have been and should continue to be wary of attempting to control the pace and competition of electoral contests. Instead, the focus should be on the long-term effects and an awareness that it is a network of institutions—laws, agencies, free media, and so on—that works together to keep the Canadian tradition of free and fair elections.