How to democratically restrict third party “PAC” ad spending and big money in politics

How to democratically restrict third party “PAC” ad spending and big money in politics
Posted on July 21, 2015 | Democracy Watch | Written on July 13, 2015
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Democracy Watch

Some recent commentary about advertising by third party interest groups (or “PACs”)) has been inaccurate and/or has included undemocratic or incomplete proposals for ensuring big money doesn’t dominate, let alone corrupt, Canadian politics.

First, while a few new coalitions started up recently and started running paid ads (HarperPAC, Engage Canada, Working Canadians), every interest group, and individual, is a third party/PAC.

As a result, the call by some for all PACs that run ads to shut down is nonsensical as that would mean all these groups disbanding and individuals also refraining from such advertising.

Calling for a shutdown is also clearly unconstitutional, although limits on ads are constitutional.  The Supreme Court of Canada in its 2004 ruling in the Harper v. Canada case (yes, Prime Minister Harper, then the head of the National Citizens Coalition, was the plaintiff in the case) upheld limits the Liberals put into the Canada Elections Act.  The limit was that third parties were only allowed to spend up to $150,000 on national paid advertising during the 37-day election campaign period, or $3,000 in each riding (indexed to inflation so that the limits are now $205,800 and $4,116).

Importantly, it is only a limit on paid advertising.  There are no restrictions on individuals or groups spending money on events or debates, issuing news releases or op-eds, posting videos on Internet sites, posting to social media sites or sending emails to their group members or supporters.

As the Supreme Court ruled (adopting points Democracy Watch put forward as an intervenor), unlimited paid ads by interest groups allow them to dominate election campaign issue debates by drowning out other, less wealthy voices, and to attack candidates who have spending limits and so can’t fully respond.  Limits on paid ads are therefore needed to ensure a democratic election process.

The Act also prohibits donations from foreigners to third parties to pay for the ads, and requires disclosure of all ad donors.  As a result, foreign governments, dictators, businesses and other organizations could be funding third-party pre-election ads right now.

Many commentators have neglected to mention that we have an unprecedented situation now at the federal level – the election date is known at least somewhat for sure given the majority government and somewhat fixed election date that was added to the Act in 2007.  This has allowed parties and third party interest groups to plan their advertising long before the official election campaign begins.

The gaps the current situation have revealed can be closed by extending the limit and other measures to cover a longer period of time before election day – say four to six months.  To keep the limit constitutional, it would have to be increased by a proportional amount – likely up to $400,000-$600,000 nationally, and $8,000-$12,000 in each riding.

However, even if this is done, everyone should realize that extended pre-election campaign measures will only apply when there is a majority government.  In any minority government situation, no one will know in advance exactly when an election is going to happen, and so there will not be a fixed pre-election period during which spending can be limited.

The remaining question is what will be done to stop other big money sources in federal elections?  Individuals are allowed now to donate $3,000 annually to each federal party and its candidates -- far more than an average Canadian can afford to give.

While businesses, unions and other organizations are banned from donating, are they funneling donations through their executives or employees?  When Elections Quebec examined similarly limited donations from individuals to provincial parties from 2006-2011, it found $12.8 million in what appeared to be illegally funneled donations.

Despite these audit results, Elections Canada has failed to do such an audit over the past 11 years since federal limits were placed on donations from businesses and other organizations.  Who knows what they would find if they looked?

The other area of concern is bundlers – people (often lobbyists) who convince many friends and colleagues to give large donations to parties or candidates.  Both the federal Commissioner of Lobbying and Elections Canada have failed to conduct audits to reveal the extent of this fundraising stream (or flood), even though it has been illegal for several years under Rule 8 of the federal Lobbyists’ Code of Conduct for lobbyists to fundraise for federal politicians they are lobbying.

Beyond audits, the solution to stopping these big money sources is to match the changes made by the Quebec government in 2013 by lowering the individual donation limit to $100 annually, adding matching public funding up to a set amount raised by a party or candidate, and restoring per-vote annual party funding (which the Conservatives eliminated even though it is the most democratic part of the federal political finance system).

Finally, to ensure fair issue debates in between elections, we should start with requiring disclosure of how much any individual or interest group spends on each issue campaign, and of campaign funding sources.  If that reveals a huge disparity in funding, and funding sources, then donations to issue campaigns, or at least paid ads, could be limited.

Until all of these changes are made across Canada, big money will still dominate, and in some cases corrupt, our politics.

Duff Conacher is the Co-founder of Democracy Watch and a Visiting Professor at the University of Ottawa

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