Election law should show us the money

With his new report on Canada's election law, Chief Electoral Officer Jean-Pierre Kingsley has set a solid standard by which to judge whether the federal Liberals take democratic principles seriously.

His recommendations, as he writes in the introduction, "proceed from the same basic principle: the public's right to know," which he refers to as "the basis of electoral democracy."

When looked at from any objective standard, his recommendations to make political fundraising rules more transparent and democratic are remarkably common-sense.

The current rules make it all too easy to hide donations by giving to a riding association, a party leadership candidate, or to an MP outside the election period. Kingsley recommends closing these loopholes, and others.

Under the law, the amounts of loans given to parties and candidates are reported, but not the terms of those loans. Canadian financial institutions play a fundamental role in financing all the major parties in Canada, and as a regulated industry, they also have an enormous stake in government decision-making. As Kingsley recognizes, if parties or candidates are given preferential loan treatment, the public should know. (Indeed, transparency itself would likely prevent such treatment.)

Kingsley also recommends a cap on donations. Limits exist in several provincial election laws, but there is no limit on the amount a donor can contribute to influence the democratic process at the federal level.

One of the down sides of Kingsley's report is that his proposed donation cap is ludicrously high. Each year, a donor would be able to give $50,000 to a registered party, plus $7,500 to riding associations. These limits would double in an election year. Because corporate donors often give through multiple subsidiaries, this would allow a donor to continue giving hundreds of thousands of dollars to parties and candidates by giving the maximum amount through each of its affiliates.

As a result, the proposed measure would do nothing to reduce the parties' reliance on a small number of high-end donors. Kingsley himself points out that 45 percent of the money raised by candidates comes from just 3 percent of donors. These donors tend to have a huge stake in government decisionmaking -- regulated industries, government contractors, recipients of government loans and subsidies, and those lobbying public officials on policy matters.

A far more sensible approach is Quebec's system, which has been in place for more than two decades and was adopted last year in Manitoba. Under the Quebec law, the donations cap is $3,000, and there is an outright ban on donations from corporations, unions and other organizations. These entities do not vote, and should not otherwise be able to use money to influence politicians.

One of the more puzzling sections of the report is the proposition to raise the threshold for reporting donors' names from $200 to $1,075. This threshold was doubled last year as part of the federal government's overhaul of the Elections Act. The report says that raising the threshold further would "enhance the privacy interests of Canadians and encourage the political participation of Canadians."

Suggesting that those wishing to hide political donations should be allowed to do so because of a right to privacy ignores the very public role that parties play as the primary actors in a parliamentary democracy.

Parties make law, and those who are governed by the law have a right to know to what extent private special interests are bankrolling the political process.

The privacy argument is especially repugnant when one considers the public subsidies that parties enjoy during elections, in the form of access to free broadcast time on the public's airwaves, tax credits for donors, and expense reimbursements for candidates and parties. These subsidies account for between one third and two thirds of total party revenues. If taxpayers are footing the bill for party budgets, we have all the more right to require a basic level of disclosure.

This exception aside, Kingsley's recommendations would go a long way toward modernizing Canada's 27-year-old fundraising rules. But Parliament's appointed expert on election issues will have a hard time getting these initiatives passed. MPs will be reluctant to change the regime that helped each of them get elected. House Leader Don Boudria has long rejected calls for greater transparency, and has already come out against disclosure for leadership race donations.

Nonetheless, there is evidence of a potential Cabinet split on this issue. Fisheries Minister Herb Dhaliwal supported closing the leadership race loophole last week in response to Kingsley's report. Dhaliwal is considered a distant long-shot for the Liberal leadership, but if he sticks to his guns on this issue his candidacy may place a spotlight on how candidates are financed. Combined with a widespread expression call from Canadians for changes, this will hopefully, and finally, convince the Liberals to democratize Canada's political fundraising rules.