The Limits of Regulation

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 Tom Flanagan

At the present time, regulation of electoral finance for federal political parties consists of the following main elements, all of which seem to be more or less accepted by the major parties:

• Prohibition of donations to parties by organizations, including corporations and labour unions;
• Limits on contributions by individuals;
• Indirect public subsidies to parties through campaign rebates and tax credits for individual donations (Direct subsidies—“quarterly allowances”—were tried but were opposed by the Conservatives and unpopular with the public, and were abolished by the Conservatives when they were in power. They would be difficult to bring back.);
• Caps on political party expenditures during the official campaign writ period; and
• Severe limitations on advertising by third parties during the writ period.

This regulatory scheme has largely succeeded in its professed aims of driving “big money” out of campaigns and creating a (somewhat) “level playing field” on which the parties can compete. However, as with most regulatory schemes, its very success has generated unintended consequences. Big money and third-party advertising can be kept out of campaigning during the writ period, but they do not cease to exist and may reappear in the pre-writ period. Also, the rapid progress of information technology has made it possible for others to engage in activities such as voter identification, get-out-the-vote campaigns and opposition research that were once the preserve of political parties. New developments in IT also make it possible for forces outside Canada to intervene in Canadian elections, whether it is legal or not.

A natural response for regulators to such developments is to attempt to increase the reach and severity of regulation, for example, to limit pre-writ advertising as well as other activities, such as voter ID, GOTV, and opposition research, in which third parties can now legally engage during the writ period. But expansion of regulation is bound to run into problems of civil liberties by imposing new limits on freedom of speech and association. Regulation of advertising and other activities during the pre-writ period may be tantamount to regulation of politics itself. If, for example, labour unions and corporations, which are now severely limited in their ability to advertise during the writ period, are also restricted or banned from advertising in the pre-writ period, how are they supposed to pursue their legitimate objectives of trying to influence public opinion? At some point, regulation may run up against the Canadian Charter of Rights and Freedoms.

I am not arguing against any expansion of the current regulatory regime. I am saying that expansion ought to be undertaken cautiously, with due regard for civil liberties and due appreciation of the limits of regulation in a free and democratic society. We don’t want to turn Elections Canada into Politics Canada.

Tom Flanagan is professor emeritus of political science at the University of Calgary and a former campaign manager for conservative political parties.