Canada sets a "radical" example on campaign funding

20 May 2008

Canada’s electoral funding reforms have lessons for Australia, writes MARIAN SAWER.

UNDER the Conservative government of Stephen Harper Canada is hardly a refuge of radicalism. It is a sign of how far Australia has slipped back over the past decade that the term “radical” can be applied (as happened at the 2020 Summit) to proposals for political finance reforms that are an everyday reality in Canada.

The “sponsorship” scandals under the Liberal government of Jean Chr©tien prompted far-reaching reforms that came into force in 2004. The Conservative government of Stephen Harper went even further in 2006 to remove the influence of corporate money from the electoral process. Still more legislation is currently before the Canadian parliament, designed to close loopholes regarding “loans” to parties and candidates.

At the federal level (and in provinces such as Quebec and Manitoba) the Canadians ban all corporate or union donations to parties and candidates and limit individual donations to relatively small amounts. At the federal level this is currently $1100 (adjusted annually for inflation). Individual donations can only be made by Canadian citizens or permanent residents - Lord Ashcroft’s millions are off limits.

The reasons for controlling political contributions are both old concerns over undue influence and newer concerns over rising costs and unequal access to the money needed for campaigning. The Canadians have shifted from a system largely based on corporate funding to one largely based on public funding, combining reimbursement of campaign expenses and tax credits with annual allowances paid quarterly to political parties.

To ensure a level playing field Canada also limits party and candidate expenditure and polices those limits effectively. After a search warrant was issued at the request of Elections Canada just last month, the Canadian Mounties searched the headquarters of the governing Conservative Party after it appeared that transfers between the federal and local levels of the party had been used to circumvent the expenditure limit. The search warrant did not endear Elections Canada to the government but is widely regarded as evidence of the independence and integrity of the electoral monitoring system.

But what of the third party problem - the possibility that donations will go instead to party-aligned organisations like the notorious Swift Veterans for Truth, which campaigned for George Bush in the 2004 US presidential elections? Cynics refer to the hydraulic nature of political finance - money will simply find its way into other channels. Canada’s answer to this appears to be working reasonably well. Third parties need to register with Elections Canada once they spend more than $500 on election advertising and are limited to expenditure of $150,000 during the election campaign period. In the 2006 Canadian federal election about 80 individuals or groups registered as third parties, including unions, Christian groups, sporting shooters and even the Association of Universities and Colleges of Canada.

Does the limiting of third party election advertising infringe constitutional rights to freedom of expression or of political communication? In 2000 the National Citizens Coalition, then headed by Stephen Harper, mounted a constitutional challenge on these grounds. However in Harper v Canada (2004) the Supreme Court found that the restrictions were reasonable in the interests of electoral fairness. It concluded that the restrictions were necessary to provide a level playing field for political discourse and to prevent wealthy voices from overwhelming others. The restriction of some voices was necessary so that others might be heard.

All four parties in the Canadian House of Commons have a stake in the reforms, which are also supported by a majority of Canadian voters. The strict limits on contributions were an attempt by a scandal-ridden Liberal government to redeem itself at the eleventh hour. They were taken further by a Conservative government elected on an accountability platform. The Bloc Qu©b©cois supports reforms that are after all based on the original Quebec model of 1977. While the NDP is a social democratic party with affiliated trade unions, it has always supported political finance reform.

It is the Liberal Party that has suffered most from the reforms. It grew lazy in government, relying on big business donations. The present Conservative Party derives from a merger between two elements - one of which has its roots in Western Canadian populism and is good at mobilising large numbers of small donations. In the first quarter of 2008 the Conservative Party raised around $5 million from over 44,000 contributors. It was followed by the NDP, with the Liberals, the official Opposition, coming a poor third.

Minor parties like the Greens, who were never recipients of corporate largesse, have benefited significantly from the annual allowance now paid to political parties to make up for the banning of large donations. Parties that have gained at least 2 per cent of the national vote or 5 per cent in a riding in which they stood a candidate are entitled to an annual allowance of $1.75 for each vote received in the last election. While public funding helps promote political equality, electoral reform to reduce the bias against minor parties that are not geographically concentrated would also help.

What can Australia learn from Canada? Basically, that good can come out of political scandals and reform is both possible and desirable. It is time for Australia to catch up with good practice regarding the regulation of money in elections. Let’s hope that Senator Faulkner’s Green Paper grasps this nettle.

Marian Sawer is director of the Democratic Audit of Australia-ANU. This article first appeared in the Canberra Times.

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