|
PDF
W. Scott Thurlow
In the last decade, we have seen a litany of changes to the Canada Elections
Act and various provincial electoral law statutes regarding financial contributions
to candidates and political parties. It was under the auspices of accountability
that these changes to fundraising were introduced – getting big money out
of politics to ensure that the system was not artificially influenced by
large contributors or corporations. Setting aside whether or not those
limitations are constitutional, the more important question is whether
or not the changes have made a difference to the democratic discourse and
to the composition of the House of Commons. This paper will focus on two
specific changes and what effect, if any, these changes have had on the
electoral process.
Money is speech. All modern jurisprudence relating to campaign contributions
stems from the idiom that in order to effectively communicate your ideas
in the modern era of politics you have to spend your way onto the agenda.
This is the most important conclusion of the leading case on the issue
– a United States Supreme Court (“USSC”) decision of
Buckley v. Valeo.1
In Buckley, the USSC linked property rights with the freedom of speech
and found that using one to exercise the other was a natural vehicle towards
truly free expression. In the decision, the USSC held that individual contribution
limits to a campaign were a constitutionally permitted safeguard to help
avoid the appearance of corruption. The Court conceded that placing limits
on the amount of money a person could spend was tantamount to limiting
their ability to assemble and be heard, noting that spending limits on
campaigns constituted “direct and substantial restraints on the quantity
of political speech”. The Court wrote that “the First Amendment denies
government the power to determine that spending to promote one’s political
views is wasteful, excessive or unwise.” The Court did not, however, accept
those limits were permissible when contributing to one’s own campaign.
In Canada, similar limitations have featured prominently in both federal
and some provincial electoral laws. The courts have considered them and
linked the right to vote (section three of the Charter of Rights and Freedoms2)
with the right to free expression (section 2 of the Charter). The key elements
of the judicial discussion in Canada on campaign financing were summarized
in the Supreme Court of Canada’s reasoning in Figueroa v. Canada.3
In Figueroa,
the Supreme Court stated that effective participation in the process was
about much more than voting and the protection of the right to vote. The
Court held that the right to vote was strengthened by ensuring that no
political movement was disadvantaged because it could not be a registered
party under the Canada Elections Act. The Court ruled that the right to
vote was about having access to a wide array of views and information in
advance of election day. Meaningful participation requires that a voter
be able to hear all sides before casting his/her vote. It includes the
ability to hear political positions that might otherwise be left out of
the debate because the proponents of those positions have limited resources.
The result of the decision is that the smallest parties are able to issue
receipts and qualify for reimbursements, which were previously reserved
to the parties that ran at least 50 candidates.
In its most recent pronouncement on the influence of money on elections,
the Supreme Court took a decidedly different approach. In R. v. Harper,
the Court held that the purpose of section three was to ensure an effective
vote, which requires the equal dissemination of points of view.4 By limiting
the election advertising by third parties, an egalitarian model of elections
creates a more level playing field for those who wish to engage in the
electoral discourse with limited resources. These limits, while infringing
the right to freedom of political expression for wealthy electors, were
saved as a reasonable limit under section 1 of the Charter because the
influence of those electors had was so significant, that they drowned out
all other voices.5
It was determined that the capital that could be infused
into the process by the wealthy deprived their opponents of their corresponding
opportunity to speak and be heard, and undermined the voter’s ability to
be adequately informed of all views.
In the absence of those spending limits, the Supreme Court articulated
that it was possible for the affluent, or any number of persons pooling
their resources, to dominate the political discourse. By limiting the ability
to spend, the Supreme Court argues that everyone’s ability to participate
is protected. In so doing, the Court has defended the provisions of the
Elections Act that place limits on an individual’s right to free assembly
and the right to make one’s voice heard. The limitation on 3rd party spending
is permissible because a group is restricted in the same manner as an individual.
For example, 150,000 contributors of one dollar to one cause are restricted
the same way a single contributor of $150,000.00. It is counterintuitive
to justify a limit on the ability of the truly poor to come together to
speak collectively by saying that the truly wealthy would dominate the
discourse. There was no evidence, anecdotal or otherwise, that the wealthy
were dominating the discourse prior to the changes being introduced to
the Canada Elections Act.
That having been said, $3,000 per riding and $150,000 nationally (adjusted
to inflation to $3,666 and $183,300, respectively) is a relatively paltry
sum when compared to how much the political parties themselves are able
to spend.6
Campaign Contributions and Corporate Participation
The Liberal Government first capped individual contributions at $5,000,
and allowed modest corporate contributions of $1,000 (adjusted for inflation
to $1,100) to individual candidates and riding associations of each registered
party in 2003. When it passed the Federal Accountability Act in 2006, the
Conservative Government reduced the personal contribution to $1,000 (adjusted
for inflation to $1,100) and banned corporate contributions entirely. These
are not the first examples of caps on individual donations, but the most
recent limitations are by far the most severe. For example, the provinces
of Quebec and Manitoba both limit contributions at $3,000 per individual
and ban corporate contributions altogether.7 Other provinces have no contribution
limits for either individuals or corporations, and do not even require
residency for eligible donors.
The assumption underlying both the personal and corporate limitations is
that financial contributions have a negative impact on the results of an
election – ostensibly buying candidates and political parties with the
funds they need for re-election. There is no evidence, anecdotal or otherwise,
that these contributions were corrupting the political system. In fact,
many larger contributors contributed to more than one party to avoid that
very problem. Large corporate contributors would often muse (off the record)
that their contributions actually led to further regulation of their businesses
by the very candidates and parties to whom they made contributions – in
order to avoid the appearance of impropriety.
Anecdotal observations on how these changes favour one party over another
aside, ultimately, the changes to the contribution rules are more about
changing fundraising practices than they are about changing the composition
of the House of Commons. While the bans on corporate contributions may
not adversely affect parties which can now rely on the quarterly allowance,
it has tied the hands of local MPs and candidates who are looking to mount
their own campaign, which is separate from the national campaign. This
is best illustrated by looking at the debts of the most recent aspirants
to the 2006 leadership of the Liberal Party of Canada, who were unable
to use corporate contributions to raise funds for their leadership campaigns.
By comparison, the race for the leadership of the Conservative Party won
by Steven Harper, was contested under the old rules, and did not have lingering
debts 18 months later. A fact not lost on future candidates for sure.
As a direct result of the changes in the rules, there has been a concerted
push towards cultivating the individual contributor and some parties are
more effective at it because it was on that model, they were built. Tying
a small contribution ($10-$20) to a specific intra-party initiative, is
a great way to energize the grassroots elements of a party and to engage
individual party members. To that end, some political parties are using
their quarterly allowances (described below) to fund their fundraising
activities with increasingly aggressive direct mailing campaigns soliciting
contributions. Not surprisingly, it is easy to encourage an elector to
make numerous small contributions as opposed to one large contribution
per year.
There are some philosophical drawbacks to the changes. Campaign contribution
rules that limit individual contributions to one’s own campaign are contrary
to the principle that persons can create their own platform from which
they can engage in a debate. Whether it is local or national, individuals
should be able to share their own ideas. Separate and apart from whether
it is acceptable to contribute to a campaign that shares your ideals, it
is a direct affront to individual freedom of speech that persons cannot
use their own resources to further their own political ideals – as a member
of a registered party or otherwise. Whether or not that affront could survive
constitutional analysis remains to be seen.
Unfortunately, the changes that impose contribution limits under the auspices
of avoiding influence peddling and levelling the playing field for all
candidates may lead to the exact opposite result. The changes may further
disadvantage new candidates who would not otherwise have access to the
same sources of revenue. Wealthy individuals who may present themselves
as candidates have wealthy clients and friends who are statistically more
likely, and have greater capacity, to make the maximum contribution. It
should come as no surprise then, that the executives of corporations, who
once contributed through their businesses, now make personal contributions
to local campaigns and national parties. It is important to note that the
Canada Elections Act makes it illegal for corporate money to flow through
and individual to a registered entity. Attending political fundraisers,
however, remains a key networking tool for those most affected by government
decisions.
Another unintended consequence of the move was that political parties in
provinces where the same stringent rules on corporate contributions do
not exist, have been the beneficiaries in the immediate short term. In
2007, the provincial parties, particularly in Ontario, aggressively targeted
those funds, knowing that these corporate contributions were still in the
budgets of large corporations and national trade associations. Yet another
unintended result was the increasing importance of campaign bundlers –
people who can get several maximum level donors – to the parties and candidates
to make the maximum possible contribution.
Finally, preventing corporations from making contributions does not remove
them from the political process. In fact, they simply shift their capacity
– away from the coffers of parties and candidates, and into those of registered
third parties – who are not precluded from accepting their contribution
for election expenses. The ability to spend their funds directly in individual
contests or as part of a national coalition on an issue of particular importance
– which would openly support or oppose a candidate – removes the accountability
that previously existed when their corporate name appeared on an election
expense return for parties and individuals. While they still have to register
their respective third parties – those returns are not scrutinized in the
same way that contributions to political players are reviewed. A direct
contribution to a candidate will lead to closer examination than a contribution
to a third party who campaigned against that candidate’s opponent. The
effect, however, is likely the same.
Cash for Votes
In 2003, Parliament passed a significant change to the way that political
parties are funded. In creating the “quarterly allowances,” Parliament
ensured that any party receiving 2% of the total votes cast or 5% of the
votes cast in the electoral districts where the registered party endorsed
a candidate would be provided with government funding every three months
(the threshold). That quarterly allowance equals $1.75 per year for every
vote cast for the party, which is adjusted for inflation by the Chief Electoral
Officer every year based on the consumer price index.
While the quarterly allowance may not make a radical change to the results
of elections, it has certainly changed campaigns. Parties who would now
not expect to make electoral gains in certain regions or specific ridings
are now using the allowance to leverage voters who would otherwise stay
at home. Parties are convincing electors that their vote is no longer meaningless
in the first past the post system and those electors can go and vote for
his/her preferred party to ensure a financial benefit. The quarterly allowance
can now legitimize a protest vote or buoy against strategic voting. In
the past, said voter would either not bother voting, or direct his/her
vote in order to achieve a strategic result whereas now, casting their
ballot for their preferred option will ensure that some benefit, however
minor, will accrue to his/her party of choice. Their vote is not for this
election, but in preparation of the next one. Perhaps ironically, since
the inception of the new program, voter turnout has been very low, with
the voter turnout in 2008 being the lowest on record.8
Creditors look at the allowance as a predictable, stable and guaranteed
source of income for the parties who are seeking loans. Parties whose coffers
are close to, or over, the maximum allowable expenses will launch pre-writ
spending knowing that they will be assured to recover the capital after
the election.
In Longley v. Canada, the Ontario Court of Appeal ostensibly reversed the
principled position described above in Figueroa which requires that a broader
spectrum of political views be heard.9 In so doing, the Court made a compelling
case for the obverse result. While holding that resources are essential
to the ability of a party and its supporters to communicate their message
and views to the public, and that garnering resources is an area in which
smaller parties are already disadvantaged in comparison to larger parties,
the court refused to grant relief to the petitioners – a melange of small
parties that frequently run candidates in multiple ridings. The Court even
went so far as to note that the vote-based thresholds themselves enhanced
the imbalance on an already tilted playing field between larger and smaller
parties. The Court noted that this imbalance exacerbates the discrepancies
in the respective parties’ ability to communicate their message to voters.
In considering the quarterly allowances (and registered party qualification
for reimbursements) the Court noted that while the threshold was unconstitutional,
it was justifiable under section one of the Charter.
The Crown successfully argued that the threshold test prevented fraudsters
from abusing the process for pecuniary gain and that previous incidents
involving registered parties could emerge again if the section was struck
down. In preserving the legislation, the Court ruled that the goal of upholding
the integrity of that regime overshadows the value of absolute equality
in the treatment of all political parties in terms of access to public
funding.
It is not a logical decision. While pushing aside the section three Charter
analysis in Figueroa, it assumes that voters would be fooled into voting
for an otherwise registered party whose participation in the electoral
discourse can have no value to the discourse because of their true intentions
to use the system to generate capital. It assumes that ensuring the participation
of the smallest parties is not worth the potential of using the system
to create wealth. The decision ignores the fact that there is nothing in
law that would prevent use of the system for that specific purpose. Small,
issue specific parties are pushed out of the debate because they cannot
qualify for comparatively small amounts of money. They cannot build on
their existing support until they meet the threshold, which may be impossible
without those funds.
The circularity mentioned above works both ways. A strong correlation can
be drawn between the gradual ascension in popularity and subsequent stability
in popularity of the Green Party of Canada and the changes ushered into
law by Liberal Prime Minister Jean Chrétien. The quarterly payments issued
to the party have provided them with the capital required to insert them
directly into the national discourse. It is perhaps not surprising that
their message has begun to resonate with Canadians. To a certain extent,
however, the Green Party’s experience is a self-fulfilling prophecy. Once
they have the money required to run a larger campaign, they will need more
money to run a national campaign that builds on their previous success.
The axiom, known to all salespeople, is that you have to spend money to
make money. There is little doubt that the party’s profile was increased
significantly (almost 2% nationally). However, this electoral support
for the Green Party did not translate into any seats.
That having been said, in what would seem to be a counterintuitive and
financially detrimental move, some Green Party candidates encouraged their
supporters to vote for other parties to ensure a different electoral result.10
Some have even argued that the leader herself became a shill for another
party.11
While the leader of the party denied suggesting this approach,
any form of ‘strategic’ voting would have an adverse impact on the financial
solvency of an elector’s first choice.
Conclusion
This fall, Canadians participated in their third federal election in four
years. The one truth that most informed observers can agree on is that
the current rules have entered into the calculus that party leaders will
have before they ‘force’ another election. The new rules will also play
a profound impact on an individual’s decision to seek a nomination or the
leadership of a registered party.
From both sides of the equation, courts across the country have said that
money seriously affects democracy. In some cases, it is a requirement that
allows smaller actors to effectively participate in the debate. In other
cases, money is an impediment to informed debate – and when too much of
it is thrown around, it restricts effective participation of those involved.
We have heard mixed messages from the Courts on the issue of money. On
the one hand, we have heard that money is required to ensure that you and
I can cast an effective ballot and broadening our section three right.
Not long after, the Court held that too much money being spent by some
people adversely affected our ability to participate – by forcing out those
without the resources to compete. Not long after that, we are told that
there are some views that are too small to be protected because doing so
would expose the system to abuse. Judicial clarification on the interplay
between speech, money and section three of the Charter is needed.
Sceptics would argue that two new parties were able to emerge in 1993 without
any fundraising assistance. The Reform Party of Canada and the Bloc Quebecois
won over 100 seats combined. What most people fail to recognize, however,
is the value that money played in building the profile of their respective
leaders. Both Mr. Bouchard and Mr. Manning were active participants in
the 1992 Charlottetown Accord referendum – and both of whom benefited,
directly or otherwise, from public money used to fuel the respective “no”
campaigns.
While the changes may have improved the appearance of propriety, they have
done little to change the actual outcomes of elections. Ultimately, to
be competitive, individual candidates still require significant funds to
run their campaigns. The playing field has been angled upwards for everyone
simultaneously. We have had too few elections to assess whether the changes
will have the desired long term effect. However, in the immediate short
term, we have seen a marked change in how the largest parties raise funds
for elections. The smallest political parties will continue to face significant
hurdles to qualify for federal funding.
Notes
1. Buckley v. Valeo, 424 U. S. 1 (1976).
2. Charter of Rights and Freedoms, Schedule B to the Canada Act 1982 (U.K.)
1982, c. 11 (“the Charter”).
3. Figueroa v. Canada (Attorney General), 2003 SCC 37 (CanLII) (“Figueroa”).
4. Harper v. Canada (Attorney General), 2004 SCC 33 (CanLII)
5. R. v. Oakes, [1986] 1 S.C.R. 103 established the “reasonable limits”
test where judges balance a violation of the right in question against
other demonstrably justified and pressing and substantial policy goals.
There must be also be proportionality between the effects of the limiting
measure and the objective.
6. Upwards of $20,000,000 nationally if a party runs a full suite of candidates
and an average of approximately $1.00 per elector per riding, depending
on the size of riding in question.
7. A complete compendium of financing rules is compiled by Elections Canada,
and can be found at:
http://www.elections.ca/loi/com2008/compoverview2008_e.pdf
8. http://www.cbc.ca/news/canadavotes/
story/2008/10/15/voter-turnout.html
9. Longley v. Canada (Attorney General), 2007 ONCA 852 (CanLII).
10. http://www.cbc.ca/news/canadavotes/
story/2008/10/12/may-strategic.html
11. http://network.nationalpost.com/np/blogs/
fullcomment/archive/2008/10/16/national-post-editorial-board-next-time-let-greens-pay-their-own-way.aspx
| 
RSS Feed
