Opinion

Democracy for Sale

Part Two: The Solution. BC shares with Alberta the dubious distinction of employing the fewest safeguards against big money in politics.

By Matt Price, 31 Mar 2005, TheTyee.ca

Democracy for Sale 2

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BC shares with Alberta the undesirable distinction of having the least fair election financing system, as measured by employment of potential legal tools. This and other problems with the way BC finances its campaings are discussed in Part One of this essay. There are five primary tools that provinces and the federal government use to make their systems fair: bans on corporate and union donations, limits on individual donations, election spending caps, public financing of campaigns and third-party controls.

Of these five measures, BC employs only one – caps on election spending. And even these caps are so high as to be largely irrelevant.

Ban corporate and union donations

Manitoba and Quebec have banned corporate and union donations outright. Other provinces have capped these (and individual) donations. BC does neither, with the result that corporations and unions dominate political financing in BC even though they have no vote.

The federal government almost banned corporate and union donations starting in January 2004. The federal bill originally proposed an outright ban on corporate and union donations, but was changed to allow the $1,000 amount, probably to placate Liberal backbenchers and party officials concerned about the loss of funds.

But, by capping individual donations at the higher level of $5,000 a year, the Canada Elections Act implicitly acknowledges that there is a qualitative difference between voters and non-voting entities, and that voters take precedence.

This $1,000 compromise, however, not only undermines the principle of campaign finance reform, but is also logistically awkward to implement. It leads to a situation where officials are “using dollars to chase nickels,” because significant staff resources are used to try to verify that corporate subsidiaries, for example, are not being used to violate the $1,000 rule. A clean ban is easier to implement.

Limit individual donations

Limits on donations of voters level the playing field, not allowing any one voter to be able to buy access or influence.

For Manitoba and Quebec who ban corporate and union donations, contributions from individuals are also limited to $3,000 per year. New Brunswick, Ontario, and Alberta also cap individual donations along with union and corporate donations. As seen above, the federal cap is $5,000 for individuals.

There is a question of what the amount of the cap on individual donations should be in order to be meaningful. The $3,000 cap of Manitoba and Quebec seems reasonable for BC also, since this would represent almost 10 per cent of the average annual salary in BC – an amount that the very politically concerned could in theory still donate. Beyond that amount, the wealthy begin to dominate. Removing big money out of politics – whether corporate, union, or individual – leads to parties paying more attention to the grassroots, and by definition to voters themselves.

Cap campaign spending

In theory, spending caps on election spending level the playing field by not letting any one party or candidate so outspend another as to skew the political discourse with money.

Caps on election spending is the only fairness measure that BC employs in its election financing. Spending caps are only meaningful, however, if they are set at an appropriate level.

The spending caps across the country are difficult to characterize quickly, but they generally depend on various formulas multiplying numbers of voters by an allowed expenditure per voter.

BC falls somewhere in the middle of the provinces in the amount it allows parties to spend spent per registered voter – $1.25. There are also limits per electoral district. In 1996 the BC Liberals spent $2.4 million under a $2.6 million cap, and the BC NDP spent almost the same. In 2001, the cap was $2.7 million, yet the Liberals spent $2.1 million (despite having much more to spend), and the BC NDP spent $1.8 million.

In 2005, the cap could be higher than $3.8 million.

While in 1996 the cap seemed to have kept the two major parties within sight of one another, there is still a question as to whether it was fair to other parties. Then, in 2001 the cap seemed to play little role in spending, and appears ready to take a large jump in 2005. It would be worth investigating whether BC’s spending formula is a fair one.

Direct Public Financing

A well functioning democracy requires investment from its participants. If the public wants political speech to be equal, diverse, and fair, then public financing is required to achieve these goals.

For those who argue that taxpayers should not pay for the political process, they need to know that taxpayers already do. Currently in BC those who donate to political parties can claim back much of their donation (if it is in the hundreds rather than thousands of dollars) at tax time. This is clearly already a public investment in our political process.

While this tax incentive encourages public investment in the political process, it is flawed in three key ways: There is no necessary connection between the expenses of candidates running for office and where the public investments end up; tax incentives for parties reinforce the gatekeeper function of political parties in the BC political process; and there is no assurance, even for a candidate receiving much of the popular vote, that investment is forthcoming from voters.

The alternative – implemented in every province other than BC and Alberta – is to directly finance the campaigns of candidates for office. The federal process also directly funds candidates. The Canada Elections Act refunds 60 per cent of election and personal expenses for candidates who received at least 10 per cent of the votes in their riding, thereby allowing individual candidates to make a realistic run for office. Federal parties are also allowed to recoup 50 per cent of their expenses if they receive at least two percent of the overall vote, or else five percent in the ridings where they ran.

Controversially, the federal law also makes provisions for a quarterly allowance to parties who meet the threshold above. For Canada, this ends up being the largest pot of public financing, reaching $24.1 million per year divided between the qualifying parties based on the number of votes received.

This concentration of resources in parties rather than with candidates reinforces concerns about the function of parties as gatekeepers of the political process. When direct public financing of election campaigns is targeted predominantly at candidates, this contributes towards the public’s desire to lessen the dominance of political parties.

Third Party Controls

If corporations and unions aren’t exerting their influence directly through BC’s political parties, this desire for influence will seek other avenues. Already in BC, groups like the BC Business Council and BC Federation of Labour routinely run parallel advertising or organizing campaigns before or during elections in order to influence the vote.

While these actors have a right – and some would say a duty – to express themselves in a democracy, the same principle of electoral fairness regarding this kind of speech applies, namely that wealth should not be the main determinant of speech. Indeed, the Supreme Court’s clearest ruling on electoral fairness has come via its ruling upholding limits on third party spending during elections.

BC has its own history with regards to controlling third party political speech. In 2000 BC’s law governing third-party advertising was struck down, but in 2004 the Supreme Court of Canada ruled that governments can indeed pass third-party limits. Unfortunately, since the Supreme Court of Canada ruling BC has yet to reinstate its third-party spending provisions, even though it can now do so with legal precedent on its side.

The Government of Canada limits third party election advertising to $3,000 in any given riding, and to $150,000 for the entire country.

We need, however, to control the full range of potential third party political campaigning. A narrow definition that governs only paid advertising with media outlets will not capture the paying of canvassers to distribute leaflets, for example, even though this may reach just as many voters.

As long as an entity is attempting to sway an election, its full range of expenditures must be included in reasonable expenditure caps that prevent other political speakers from seeing their viewpoints overwhelmed through sheer force of money.

Recommendations for restoring democracy in BC

BC and Alberta share the dubious distinction of having the fewest measures in place that promote fairness in political financing. Conservation Voters of BC believes it’s time for BC to catch up to other jurisdictions that have strengthened their democracies by implementing the following fairness measures:

  • Allow only individual voters to make political contributions; place an absolute ban on corporate, union, or association donations. Also add provisions banning “indirect contributions,” the circumventing of the ban through organized employee giving or in-kind contributions, for example.

  • Limit the amount that an individual voter may contribute each year to $3,000 in order to remove the ability of wealthy voters to exert greater influence over candidates or parties.

  • Investigate whether BC’s current election spending caps are fair and effective – that is, whether they serve the objective of levelling the playing field, or whether they are too high as to be irrelevant.

  • Implement direct public financing of candidates in BC, indexed to support achieved in elections. If direct public financing of parties is needed, ensure that this amount is the minor portion of overall public financing when compared to direct candidate support.

  • Reinstate controls on third-party campaigning in BC. Establish a spending cap for third party campaigns that includes not only advertising expenses, but also paid grassroots organizing expenses.

Matt Price is coordinator of Conservation Voters of BC, which tracks the environmental performance of BC’s elected officials, advocates the passage of a progressive policy agenda for BC, and supports environmentally minded candidates for office. [Tyee]

14 Comments:

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  • dearpremier.ca

    7 years ago

    Comments on "Democracy for Sale"

    I'm surprised you haven't endorsed Mr. Penner for his work on SE2. Any particular reason?

  • Sideshow Bob

    7 years ago

    It all makes so much sense. However, the individuals who would be changing the laws, are the ones who have the most to lose. It is interesting that Chretien made the changes when he was retiring from politics so that he had nothing to lose.

  • The punisher

    7 years ago

    Dear sideshow bob,

    As a matter of interest, Chretien was the Prime Minister of Canada. - Not BC

  • BrianWhite

    7 years ago

    Tax breaks for political contributions are not exactly much use to poor people, are they? Has anybody suggestions to make apathetic poor people vote? (All across the world, rich people are better voters). I worked with an australian for a while and he said that they had fines for people that didnt vote. I thought the idea bad at the time but he defended it pretty vigorously. My theory is that if you could get poor people to vote, they wouldnt be so poor anymore. Compulsory voting would end the "get the vote out" stuff where they try to scare people out of their homes to vote. (I think this is a bigger issue in the US than here).
    Good deep article! But compulsory voting should be added to the list of democracy improvers. It helps level the playing field too.

  • Geronimo!

    7 years ago

    "But compulsory voting should be added to the list of democracy improvers. It helps level the playing field too."

    Surely you jest.

    http://www.infowars.com/images2/Bush/republicrat.jpg

    American Dictators: Documenting the Staged Election of 2004
    BBC Reporter Greg Palast: "Alex Jones is a national treasure, a light breaking through the electronic Berlin Wall of the US media establishment."

    American Dictators is a 90+ minute expose chronicling the degeneration of America's political process. Alex Jones rips away layer after layer of the false left-right paradigm and finally reveals the 2004 election for what it is -- stage managed theater that would make Shakespeare proud.

    American Dictators details:

    * That Bush and Kerry are closely related on both sides of their families,
    * That Bush the Skull and Kerry the Bone have both sworn an oath to a secret society with deep connections to organized crime, intelligence agencies, and the occult.
    * That the "Order of Death" known as Skull and Bones has its members at the highest levels of every sector of the US economy -- from banking to government.

  • Mooney

    7 years ago

    Good articles.
    But if the idea is to democratize the elections process, why permit any loophole which would allow fat cats to spread three thousand buck donations through their executives, relatives and other shoe shiners?

  • sdgreen

    7 years ago

    I do not agree with the recomendations as listed above. The only thing that government out to do is finance the electorial process, NOT the campaign costs of candidates!

    Elections must be based on the principal of what ever Party platform achieves the largest support, wins, and that includes the attraction of funding from either individuals, unions, corporations or any other source.

    For government to support these costs does not achieve the need for competition.

    Concievably, one could start up a party with some strange purpose, with no chance of winning any support, have candidates in all of the ridings do nothing, yet expend public taxpayer dollars. Even indexing makes no sense, as the largest winner gets the greater amount of money and those with lessor wins are no further ahead.

    There should be zero caps on advertizing or donation levels from any source.

  • Bailey

    7 years ago

    sdgreen. Good to hear from you again.

    Again you insist on behaving as if everything is above board and everybody is trustworthy. You are not alone in that belief, but you are more alone in it every day.

    In fact, the whole basis for the discussion above here is a growing suspicion that some parties are 'attracting funding' through the illicit conversion of public property and funding to private interests. Who just happen to have made substantial 'contributions' to candidates and party funds.

    I've been wondering myself whether a chart could be drawn showing the size of the public benefit, property or contract in relation to the size of the 'contribution'. That would be an interesting correlation to make, don't you think?

    Your theory about competition as a mechanism for selection is a great theory, if you don't look at the realities too closely. In a pure state, where everyone has principles and ethics, it operates a bit like you think it does. For a while at least.

    But introduce one ruthless or sociopathic element, and you get an instant game of Biggest Asshole Wins. The ethical are at a distinct disadvantage over the ruthless. And a sociopath will not balk even at causing deaths. Few sane people will ever try to 'compete' with that. None will compete successfully unless they become sociopaths themselves.

    All these Capitalist mechanisms work well only if they are regulated by strong public checks and balances. Rules to impose some order in the playground. Keep the bullies from taking away all the little kid's lunch money.

    When the bullies get to make the rules, even for one term, those checks and balances will be the first to go. Then let the game begin.

  • anne cameron

    7 years ago

    Bailey...interesting you would use the term "sociopathic"...the same personality markers which produce a Paul Bernardo are the ones which also produce CEO's and Supreme Court Judges, the markers which give us Carla Homulka also give "high power" politicians and stock brokers. Those sociopaths who can pretend to be acceptable long enough to get a good education seem to spend less time in jails and bins than those who are less educated. Obviously, if a person is to be a sociopath it would be better to be born into a wealthy family where you get taught the good manners which cloak your predilictions than to be born a slum kid who gets busted at age ten for setting cats aflame.


    sdgreen: When I was a child I thought as a child, I spake as a child, but now I am a man..and I still speak and think as a child... In a perfect world what you suggest might work, for a time. It would , of course, in a perfect world, be redundant.

    Why are we subjected to weeks of "cult of the dead" TV worship, actual hour-long specials on the life of Terri Shiavo, now the prolonged dying and disposal of a nice old man who happened to be Pope...while the real mounds of dead in Iraq, in Africa, in areas where poverty is so extreme our fat-cat North American minds cannot envision it, languish and die unnoticed, unmourned, and, it would seem unimportant? Who benefits by this skewed journalism? Is it an accident we are given day after day of Michael Jackson's fright-mask and nothing at all of real substance?

    Geronimo, you are spot on! It was a tale told by an idiot and repeated ad nauseum on CNN and the world will pay dearly.

  • dearpremier.ca

    7 years ago

    Jean Binette writes:

    Anne Cameron - Does your use of the term "sociopathic", include Justice Wally Opal?

  • Budd Campbell

    7 years ago

    To me the most important problem has less to do with the legislated rules, important as those are, and more to do with popular attitudes.

    First off, let's remember that with refundable tax credits (where individuals do get subsidized even if they have zero taxable income) there is already substantial public funding for federal and provincial parties by way of tax expenditures. If BC does not have explicit subsidies for campaigns, I wonder how important that really is in the overall scheme of things.

    From what I have seen, it looks like most candidates in BC, both federal and provincial, are not spending well below the riding level limits, largely because the donors have dried up to the point where, even with the tax credits, they are having a hard time raising money. To me, that's a pretty large vote of non-confidence in the whole system, and it's something that wasn't there ten years ago. In the 1990s, it was common for riding level campaigns to spend at least two thirds to three quarters of the allowable limit, and there was even talk of the ceiling becoming the floor. Well, not any longer, money is hard to find because people are just not willing to donate.

  • Anne

    7 years ago

    Bailey and Anne Cameron, I agree with everything you've said here. Brian White, one reason poor people don't vote is that none of the parties support their interests! Back in the 80's when the Socrudes were still in, the poor were urged to vote N.D.P. I'm sure many poor people's votes helped the N.D.P. to victory in 1991. Then, in their second term, especially, the N.D.P. threw the poor to the wolves. Next election was the one where I voted Green in protest, but I was still a poor person who voted. That election the N.D.P. lost so badly that there isn't even a proper Opposition. Hey, maybe the N.D.P. shouldn't have sucked up to the Right and screwed the poor? Maybe this growing group of poor folk are not voting, not because they are too drunk, too ignorant, too lazy--but because they don't believe in voting anymore! Now, for myself, I will be voting, and voting N.D.P., in this coming election, but it's not because I like them--it's because if no one but the well-off votes we'll keep getting the Fiberals.

  • Anne

    7 years ago

    Another thing, Brian, it isn't just the poor who don't vote. When I enumerated for the federal ele ction about 8 years ago, all the people who said they didn't vote were living in affluent-looking houses!

    If I were forced to vote, I'd simply spoil my ballot in protest, but as long as I'm not forced to vote I'll probably keep voting for the lesser evil.

  • BC Mary

    7 years ago

    "The Quebec sponsorship scandal isn't just a Quebec sponsorship scandal, it's a national shame. Only a country determined to delude itself would believe a system so sophisticated, sinister and carefully concealed was limited to use in one province. Much more than just a misguided attempt to wrestle separatists to the ground, it smells of a multi-purpose, much-used scheme to pay Liberal party bills with your money." [Quoted from Jim Travers' column, Toronto Star, 9 April.]

    With taxpayers' money? Or with the proceeds of crime?

    It's impossible imagine that with more than $6 Billion cash wafting annually in and out of the British Columbia crime economy, some of that illicit money isn't being stuffed into envelopes for key persons in Vancouver and Victoria, too, in what could be called B.C.'s own Legislature Scandal.

    If the danger to democracy and the eroding of government is the measure, British Columbia's scandal is far, far bigger than the eastern Sponsorship Scandal.

    So how is it better to ignore organized crime that could be buying favours from key government personnel in B.C.? Most of those "persons of interest" in the RCMP raids on the BC Legislature were Paul Martin's federal Liberal campaigners.

    How is it smart to pretend otherwise? Or to delay the truth by saying "I know nothing!" Or that "it's before the courts therefore we cannot discuss the situation." When was the last time a politician demanded, on behalf of the public interest, that either British Columbia's courts begin to hear the trials of those who are accused -- or that the Search Warrants be fully opened -- or failing all that, that BC or Ottawa have a Public Enquiry into the Raids Scandal?

    If democracy requires an informed public, how can we vote keep voting as if blindfolded, deaf and mute?

    It's foolhardy to assume that organized crime would unselfishly donate unmarked envelopes of cash for the good of the nation. Criminals are buying personal favours, too -- favours which no honest citizens could expect to get. Unemployment strengthens the conditions in which organized crime flourishes. Reduced police budgets, more casinos, reduced access to health and education are all door-openers to the despair from which citizens grasp the only way out: through joining organized crime networks so handy in every neighbourhood. Recall Sgt. Ward's warning: "It has reached critical mass" in the past 2 or 3 years?

    Do the math: there's $6 Billion minimum of illicit cash sucked out of the B.C. economy each year which nobody can check -- compare it to the $250 million Sponsorship Scandal in Eastern Canada.

    Is crime money less dangerous? Is taxpayers' money more significant?

    David Basi might well take a good look at Jean Brault's example and decide that he, too, will become an instant folk hero by telling the truth. Apparently people still recognize the truth when they hear it, and appreciate that it's the beginning of the clean-up, or they wouldn't have applauded Brault as he concluded his astounding testimony at the Gomery Enquiry in Montreal.

    It could happen to Basi in Vancouver, too. That is, if he ever comes to trial.

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