Ottawa needs a reality check -- No more excuses, clean up campaign finances

Let's review the reasons to oppose Prime Minister Jean Chrétien's new political fundraising bill.

"The appearance of this legislation at this time is too driven by internal Liberal politics," says Stephen Harper, suggesting the prime minister is only using the bill as to "whitewash various scandals from his record" and to undermine his rival Paul Martin.

"Why did you wait until you are leaving?" asked Conservative Leader Joe Clark, suggesting it was hypocritical for the prime minister to bring in fundraising reforms now, after a decade of using the rules to maximum benefit on the rubber chicken circuit.

Others have criticized Chrétien for failing to consult other parties on the new rules.  Similarly, some Liberal backbenchers have suggested that, while banning corporate donations and limiting individual donations might be a good idea, we should do it later, when there isn't a leadership campaign on the go.

The trouble is, all MPs, even those in opposition, are in a conflict of interest on this issue.  Parties are indeed often consulted before electoral changes are proposed.  And for that reason, the fundraising rules, on which all parties coasted to office, have remained more or less unchanged for 29 years.

Saying we should wait for the prime minister's successor to take power is a lot like saying we should wait for more research on nicotine addiction before figuring out whether itís worthwhile to quit smoking.

Of course, these criticisms have nothing to do with the content of the bill.  But in a town where every muscle spasm is seen through the Liberal leadership lens, the actual substance of a major policy initiative seems to matter little.

Ottawa needs a reality check.  Polls show that two thirds of Canadians favour banning corporate and union donations.  The transparency provisions in the bill address loopholes that have been identified by citizens' groups, the chief electoral officer and even a Royal Commission that examined electoral finance issues 13 years ago.  Most importantly, Canadians have a right to know who is bankrolling their elected leaders.

True, the bill's public subsidy provisions are excessively generous, replacing all the corporate and  high-end donations with publicly financed dollars, rather than encouraging the parties to broaden the base of their support by appealing to more small donors.  But a hard look at Canada's antiquated fundraising rules shows that the problem with Bill C-24 is not that it goes too far.  Quite the opposite -- it doesn't go far enough. 

The proposed $10,000 donation limit is ludicrously high, far in excess of what is affordable for the average Canadian.  Ten thousand dollars represents more than one sixth of the average household income in Canada.  A donation of this amount would hardly be a prudent expenditure for the vast majority of Canadians.  Quebec and Manitoba both have complete bans on corporate and union donations, and an individual donation limit of just $3,000. 

Not that one should point to the United States as a model for reining in the influence of wealth in politics, but even there, the limits on donations to candidates are US$2,000 a year.  For parties, it's US$2,500, and for the political action committees (the only vehicle through which businesses and unions can donate to parties or candidates), the limit is strictly held to US$5,000. 

Undoubtedly, problems in the U.S. donations system exist.  The most serious was "soft money" -- unregulated funds that flowed into party and candidate committees that undertook election advertising and other campaign expenses.  But that loophole was closed by Congress last year.  There is still a problem with "527 organizations" -- entities that can receive donations and then advertise in favour or against candidates, provided they don't use "magic words" like "Vote against candidate x" or "Support candidate y".  These organizations are prohibited from coordinating their efforts with official campaign teams, but can be decisive in an election.

But these loopholes are trivial compared to those in the Canadian system.  Bill C-24 closes some of the most serious by applying disclosure and donation limits to leadership races, nomination races and riding associations.  But left unregulated are trust funds, a ubiquitous term covering any account controlled by a candidate or party that can receive unlimited hidden funds.  Nothing in the U.S. system approaches the breadth of this loophole.

Unlike the quarterly and monthly reporting requirements in the United States, disclosure in Canada does not take place until up to 18 months after each donation is made, making it impossible to tell whether a monetary gift was timed with a particular government initiative.  And because there is no requirement to list a donor's employer or whether they sit on the board of a company -- as is required in the United States -- it is difficult to know who the donor really is, and to see whether companies are funneling donations through their employees and executives.

It will now be up to MPs to close these and other remaining loopholes.  But some may try to water the bill down, offering flimsy arguments about the motives behind the legislation, or parliamentary tradition. 

Let's hope they instead stick to facts and substance, and address the real need to clean up the system.