Update, November 22: Bill C-2, formerly Bill C-83, is now being studied by the House Standing Committee on Procedure and House Affairs. The hearings are being published here.
Update, November 22: Bill C-2, formerly Bill C-83, is now being studied by the House Standing Committee on Procedure and House Affairs. The hearings are being published here.
Summary
Tabled and given first reading in the House of Commons on June 7 by Liberal house leader Don Boudria as Bill C-83, Bill C-2 is the first major overhaul of the federal Canada Elections Act since 1974. Elections Canada says that C-2 will improve the disclosure of election finance information, and to a large extent this is true: the bill will require the publication of addresses of contributors and information about federal parties' trust funds, for instance.
However, C-2 is marred by two serious flaws:
1) C-2 misses a major opportunity to give Canadians prompt and transparent information about election finance of the kind that is available in other jurisdictions.
2) C-2 will reduce the number of federal political donations open for scrutiny by the media and the public by between a third and a half.
1) C-2 misses a major opportunity to give Canadians prompt and transparent information about election finance of the kind that is available in other jurisdictions.
Ideally, the Canada Elections Act should require Elections Canada to match the standards for prompt disclosure of campaign donations set by the Federal Elections Commission in the United States, or by well-organized state electoral commissions like California's. At a minimum, it should meet the standards set by Ontario's Elections Finances Act. The bill does neither.
Three major features of successfully transparent election finance reporting systems in other jurisdictions are missing from both the Canada Elections Act and Bill C-2: prompt reporting by parties, reporting of donations from all points where they are received and prompt publication in electronic format by government.
a) Prompt reporting by parties.
United States. In the United States, federal law gives a committee representing a candidate or PAC 20 days to submit a monthly, semiannual or quarterly report to the FEC, and 30 days to submit an annual report. Year-end reports have a filing deadline of January 31. In the last few weeks before an election, committees are required to report contributions over US$1,000 within 48 hours of receipt; they are immediately published on the FEC's Web site. The FEC's 1999 legislative recommendations call for a uniform reporting deadline of 15 days after the end of a reporting period.
Ontario. Parties are required to file annual financial statements by May 31, and statements related to an election by six months after the date of the poll.
Federal. Parties are given six months after the end of the year to file an annual report, and statements related to an election by six months after the date of the poll.
The only good reason to give parties a grace period after the end of a reporting period is to allow them time to finalize their statements to the last day, audit them, and have them submitted. If American parties can accomplish this in three weeks, it's not clear why it should take Canadian parties six months.
b) Reporting of donations from all points where they are received.
United States. Under American federal electoral law, central party committees, committees supporting a candidate for the presidency or for either house of Congress, and PACs are all required to file reports of donors with the FEC.
Ontario. In Ontario, there are four ways to give money to a party: to a riding association, to the party's central fund, to a central campaign's fund during an election, and to a riding-level campaign fund during an election. In all four cases, parties are required to file returns of donations over $100, which become part of the public record in electronic and paper form. Unlike the federal system, there is no legal way to give money to a party in sums over $100 that will not eventually become part of the public record.
British Columbia. In British Columbia, both parties and constituency associations are required to file annual reports of contributions and expenditures.
Federal. On the federal level, riding associations are under no obligation to file public returns of contributors, subject to a rule explained below. This loophole enables parties to raise money at the riding level in ways that are invisible to the public.
It is true that section 45 of the Canada Elections Act requires riding associations giving more than $100 to a central party fund to file reports of contributors giving more than $100 to the association. However, donations at the riding level are interesting in and of themselves, independent of a relationship with the central party, and should form part of the public record.
In passing, I should note that unlike the returns of central party funds, riding-level records submitted in compliance with section 45 are not put on the Elections Canada Web site for download. To take the Reform Party as an example, eight Alberta Reform riding associations between them gave more than a quarter of a million dollars to the party's central fund in 1997. Who originally donated that money at the point where it entered the party's financial system? We have no way of finding out.
"At the present time," explains a paper prepared for Ontario's Commission on Election Finances, "local or constituency associations of political parties are barely recognized by the Canada Elections Act."
Incomplete reporting of political contributions means failure in the goal of guaranteeing transparent information about election finance.
c) Prompt publication in electronic format by government.
United States. The FEC publishes details of freshly filed contribution information daily on its Web site. Publication of last-minute contributions before elections is discussed above.
Ontario. In Ontario, the Elections Finances Act now requires the publication of parties' financial statements on the Internet. Parties' statements are due by May 31, and tend to be made available for download on the Commission's Web site by early summer. In June 1999, while Ontario's Commission on Election Finances was posting 1998 records of provincial contributions on its Web site, Elections Canada was posting 1997 records of federal contributions on its site.
Federal. Unlike Ontario's Elections Finances Act, neither the Canada Elections Act nor Bill C-2 require the Chief Electoral Officer to publish parties' financial statements electronically. As a practical matter, Elections Canada seems to get around to it eventually.
2) C-2 will reduce the number of federal political donations open for scrutiny by between a third and a half.
Bill C-2 raises the threshold for disclosure of political contributions from $100 to $200. While the implications of this change aren't immediately obvious, a look at federal and Ontario donations from the mid- to late 1990s shows that between a third and a half of contributions tend to fall into the $100-200 range.
In 1997, for example, there were 19,748 reported donations of sums under $200 to the central funds of the five major federal parties, totalling about $2.7 million. About a third of the recorded donations fell under the $200 mark. Broken down further by party, contributions between $100 and $200 ranged between one fifth and one half of the total. Under C-2, none of those donations would have been public.
| Donations $100-200 | All donations | Percentage $100-200 | |
| BQ | 1,721 | 3,676 | 46 8% |
| NDP | 5,868 | 13,389 | 43 8% |
| Reform | 3,495 | 10,957 | 31 9% |
| Liberals | 5,546 | 17,648 | 31 4% |
| PC | 3,118 | 10,495 | 29 7% |
| All | 19,748 | 56,165 | 35 2% |
| Party | Donations $100-200 | All donations | Percentage $100-200 |
| Liberals | 12,027 | 23,407 | 51 4% |
| NDP | 8,311 | 22,307 | 37 3% |
| PC | 17,542 | 51,888 | 33 8% |
| All | 37,880 | 97,602 | 38 8% |
Recommendations:
Canada's federal electoral system is simpler than the American federal electoral system. Also, while it is larger than that of a province, it is not inherently more complex. Elections Canada, supported by a strengthened Canada Elections Act, should be able to at least match the standard of transparency set by the FEC.
Today, the Canada Elections Act is a feeble tool for giving the public insight into the financing of political parties. Bill C-2 does nothing to seriously change this. However, four modest and achievable changes would fundamentally improve campaign finance disclosure at the federal level in Canada. They are: mandatory electronic filing, a low threshold for reporting donations, requiring riding associations to report contributions, and requiring parties to file reports quarterly, rather than annually.
1) Mandatory electronic filing.
The only serious way of doing campaign finance reporting, where a journalist may have to organize tens or hundreds of thousands of individual data, is through database or spreadsheet analysis. Large-scale paper publication is neither practical for electoral authorities nor useful to the reporter. Publishing the 1997 central party returns for the five major federal parties, for example, would take 1,123 pages in Microsoft Excel; publishing the 1995-7 returns for Ontario's major parties would take almost 2,000 pages. Even then, a reporter would not be able to sort or run searches.
From this, it can be seen that to be committed to transparency in election finance is to be committed to the prompt publication of parties' audited statements in electronic form. The Federal Elections Commission is an outstanding example of commitment to this principle, and Ontario's Commission on Election Finances is not bad by Canadian standards.
Elections Canada, however, which has not released electronic information about election contributions later than 1997, has failed to make a serious effort. Judging by C-2, they will fail to make a serious effort in the future.
The principle involved is important enough for it to become part of the statute, as has happened in Ontario.
2) A low threshold for reporting donations.
The threshold for reporting donations should be a token amount over the maximum sum allowed as a cash donation to the party for a purpose like a membership fee. In the case of donations over this amount, parties have to process a cheque or electronic transaction in any case, so they might as well be required to include the donor's name on their public statements.
The amount of money involved varies across the country, and some provincial election laws don't mention one. Some examples are: Manitoba, $10; Ontario and PEI, $25; British Columbia municipal elections and Alberta, $50; New Brunswick and the Northwest Territories, $100; Quebec, $200; Saskatchewan, $250. On the federal level, an amount slightly over the highest amount a party might charge as an ordinary membership fee - say, $25 - would be appropriate.
3) Require riding associations to report contributions.
The loophole in the Canada Elections Act, and also in Bill C-2, under which riding associations can avoid making their lists of donors public - as if giving to a riding association wasn't just another way of giving to the party - is a serious abuse that must be ended. It ensures that campaign finance information that is made public is permanently incomplete.
4) Require parties to file reports quarterly, rather than annually.
All parts of a party should be required to file quarterly, rather than annual, reports of donations. A moment's thought tells us that it is unlikely that a major party's fundraisers would be allowed to report the details of donations only once a year, any more than officers of a company would be allowed to report the company's statistics only once a year. It follows that the parties can provide current information to the public more frequently than they do, given that the necessary information must exist internally.