Liberals pull cord on SuperPACs
But loopholes mean outside money still flows
You may remember a particularly grim political ad from the 2015 election campaign that cudgelled the Harper Conservatives for “not being there for you.”
Against a dark background of brooding skies, images of Stephen Harper and Senator Mike Duffy flashed over a message track that suggested the Tories wanted to cut $36 billion from health care to give to corporations and the wealthy.
“What do you get? More deceit. More scandals from worn-out politicians who’d leave you on your own in the gathering storm,” said the voice-over, as thunder rumbled and lightning crackled. If Pestilence, War, Famine and Death had ridden across the screen on horseback to announce the Last Judgment, no one would have been surprised.
The sponsors of the apocalyptic ad were a motley collection of unions and leftists united under the banner, Engage Canada.
What was different from previous campaigns was the slick production values and the multi-million-dollar budget behind the effort.
The length of the campaign — 78 days — raised the spending limits for third parties (groups producing election advertising who are not registered candidates, parties or riding associations) and allowed unions like the United Steelworkers and Unifor to divert up to $439,000 each. When a number of unions banded together to form Engage Canada, we were in SuperPAC territory for the first time.
It’s unknowable how many votes shifted as a result, but it clearly did not help Harper’s cause.
U.S.-style Political Action Committees (PACs), where third parties band together to push for or against a political party, have not been a phenomenon federally in Canada; but a total of 114 third parties registered in 2015, up from 55 in 2011, and Elections Commissioner Yves Coté told Parliament he expected to see third party participation grow still further in 2019.
The good news is that the Liberal government appears to have taken action in the Elections Modernization Act, introduced late Monday, to end the era of the SuperPACs in Canada before it has begun in earnest.
The new bill states clearly that third parties shall not circumvent, or attempt to circumvent, the new maximum spending amounts in any manner, including splitting themselves into two or more third parties, or by acting in collusion with another third party so that their combined partisan expenses exceed the maximum amount.
The bad news is that, for reasons best known to themselves, the Liberals have increased that maximum amount — from $150,000 to $500,000 during the period after the writ has dropped, and up to $1 million in the two months or so before the official campaign. (The amount was higher in 2015 because of the length of the campaign, but the pro-rata increase dies with the higher limits in the new bill.)
Scott Brison, the acting minister for democratic institutions, said the government thinks it has struck the right balance between freedom of speech and the protection of Canada’s democratic institutions.
The real reason for the increase in the spending limits is probably because the Liberals have left it so late in the day to make changes, they couldn’t risk the time delay of a court challenge from third parties aggrieved at having their ability to influence the next election curtailed.
Lori Turnbull, director of the Public Administration School at Dalhousie University and co-author of a Public Policy Forum paper on modernizing political financing, got it just about right when she gave the omnibus elections bill a B/B-.
“It’s a step in the right direction, but it looks as if they were pressed for time and some big problems have been left on the table,” she said.
On the plus side, the bill puts third parties and political parties on an even playing field.
Previously, third parties had a different compliance regime — they were limited in what they could spend on advertising but not on polling, events or canvassing, which offered a big advantage to volunteer groups like Leadnow.
There is more transparency throughout the bill: third parties are required to use a Canadian bank account and report on all contributions received for election-related activities.
But there remains a major weak spot in the legislation when it comes to staunching the flow of foreign money into the Canadian political system.
In the last election, foreign money wielded by political advocacy groups targeted Conservative candidates — Leadnow claimed its 6,000 volunteers helped defeat 25 Tories.
Leadnow said no international money went toward the campaign.
However, the New Yorkbased Tides Foundation donated $795,300 to a B.C.based non-profit called the Sisu Institute Society, which in turn donated to Leadnow.
Leadnow acknowledges Sisu contributed grants for its “other campaigns” but said the election campaign was funded entirely from Canadian sources.
Yet, as Duff Conacher at Democracy Watch pointed out, this is nonsense. “Any grant frees up other money, if it’s all in one pot.”
There is nothing in the new bill to stop this from happening again.
Third parties will have to reveal where their funding comes from but likely months after the election is over, thanks to the complaints-based system that means the Elections Commissioner investigates possible contraventions after the fact.
“The Liberals have closed the door on foreign funding halfway, but you don’t close a door halfway if you want to keep something out,” said Conservative Senator Linda Frum, who sponsored a private member’s bill on the subject.
Blake Richards, the Conservative party’s democratic institutions critic, said this remains a “giant loophole” when all the movement is to try to limit the ability of big money to influence politics.
The Liberals should be commended for attempting to curb the enthusiasm of third parties to dictate our elections.
Moves to beef up the powers of the Elections Commissioner to go after violations of election law and changes to make voting more convenient are sensible.
But the increase in the campaign limits for third parties, not to mention the failure to truly clamp down on foreign influence, detract from an otherwise sound piece of legislation.
“It’s bizarre and baffling why they wouldn’t do a complete prohibition,” said Frum.
“All the avenues for the corruption of our system will continue to be open, so it’s not a successful bill.”