Marking 20 years
of bold journalism,
reader supported.
News
Politics

Are Canada's Corporate Giants Re-engineering US Politics?

CN Rail and others raised millions for political parties down south in 2014.

Jeremy Nuttall 30 Oct 2014TheTyee.ca

Jeremy J. Nuttall is The Tyee's Parliament Hill reporter in Ottawa. Find his previous stories here.

This coverage of Canadian national issues is made possible because of generous financial support from our Tyee Builders.

Canadian corporations helped raise significant amounts of money for political parties in the United States and spent big bucks on lobbying efforts, according to a paper released Wednesday.

The report, from the Shareholder Association for Research and Education (SHARE), details involvement of Canadian corporations in Political Action Committees (PACs) and lobbying in the U.S. this year. The group is an advocate for ethical investment.

Author Kevin Thomas hopes the report draws attention to how Canadian corporate donations affect politics here and outside the country, and a lack of transparency for investors.

A 2010 U.S. Supreme Court decision that protected corporate and union political donations prompted an increase in those donations. More than $800 million in corporate money has been spent trying to sway voters for the 2014 U.S. mid-term elections.

PACs are associations that are set up to raise financial contributions to support political initiatives and give funds to political campaigns. Corporations can sponsor PACs, but cannot contribute directly from their finances and often get shareholders and employees to donate.

Contributions top $1 million

The study shows PACs registered to Canadian corporations on the Toronto Stock Exchange's list of 60 most valuable Canadian companies, have solicited more than a million dollars in contributions for political causes.

Contributions to PACs registered to Canadian corporations and people associated with them totalled nearly $1.2 million U.S., while lobbying efforts hit more than $15 million.

According to SHARE, so-called superPACs are an even larger concern because companies -- foreign ones included -- can donate to them by funneling the money through non-profits first.

Non-profit organizations don't have to disclose their donors, so companies can give as much as they wish while concealing their identity, leaving Canadian investors in the dark.

SHARE director Kevin Thomas said Canadian disclosure rules don't go far enough, and investors deserve more access to information on political activities by corporations.

"You get glimpses of what's out there, but you don't really know how much they're [corporations] spending and on what," Thomas said. "We consider that, from the investment side, to be a hidden risk."

If there's not enough oversight, investors may end up supporting causes they don't believe in or could hurt other investments in their portfolio.

Another risk is the potential harm to a company's reputation -- and stock prices -- if it comes to light that a corporation donated to a political cause that ends in controversy.

The paper also questioned spending on fundraising and lobbying in a democracy and if it yields any positive results for shareholders.

If investors have broad portfolios, Thomas said, they need to work hard to make sure they haven't invested with corporations actually working against their interests or principles.

CNR tops lobby list

The study also shows that Canadian companies spent big bucks lobbying in the U.S., with Canadian National Railway topping the list with $2.9 million in costs.

Second was Blackberry at $2.6 million.

Thomas said the information came from publicly available figures in the U.S.

Dermod Travis of the government watchdog group, IntegrityBC, said it isn't good practice for Canadian companies to be involved in U.S. politics, noting that Canada was accused of interfering in the 2008 Democratic primaries.

"I'd be very concerned, if I was a shareholder, about a company tying its tail to a political party that might not win power," Travis said.

He described PACs as a "back door around U.S. campaign financing laws."

By contrast, Travis said Canadian laws are stringent when it comes to outside influence, with the exception of British Columbia, which allows outside donations to political parties.

Thomas said his group will continue to raise the issue on both sides of the border, adding the research paper is part of a three-year project about the degree to which Canadian corporations affect the political system and the interests of investors.  [Tyee]

Read more: Politics

  • Share:

Facts matter. Get The Tyee's in-depth journalism delivered to your inbox for free

Tyee Commenting Guidelines

Comments that violate guidelines risk being deleted, and violations may result in a temporary or permanent user ban. Maintain the spirit of good conversation to stay in the discussion.
*Please note The Tyee is not a forum for spreading misinformation about COVID-19, denying its existence or minimizing its risk to public health.

Do:

  • Be thoughtful about how your words may affect the communities you are addressing. Language matters
  • Challenge arguments, not commenters
  • Flag trolls and guideline violations
  • Treat all with respect and curiosity, learn from differences of opinion
  • Verify facts, debunk rumours, point out logical fallacies
  • Add context and background
  • Note typos and reporting blind spots
  • Stay on topic

Do not:

  • Use sexist, classist, racist, homophobic or transphobic language
  • Ridicule, misgender, bully, threaten, name call, troll or wish harm on others
  • Personally attack authors or contributors
  • Spread misinformation or perpetuate conspiracies
  • Libel, defame or publish falsehoods
  • Attempt to guess other commenters’ real-life identities
  • Post links without providing context

LATEST STORIES

The Barometer

Do You Think Naheed Nenshi Will Win the Alberta NDP Leadership Race?

Take this week's poll