The System Is Working

As the media reported earlier this week, environmentalist groups are angry at Elections Canada, which has warned them that spending money to raise awareness of climate change in the run-up to the coming federal election would subject them to the rules on “third party” participation in election campaigns. Many are feeling that they will be required to keep quiet during the campaign, which rather defeats the purpose of being advocacy groups. Even the BBC has a story on this.

For its part, Elections Canada has issued a response claiming that the Canada Elections Act doesn’t prevent advocacy groups from advocating, so long as they register if they spend $500 or more and comply with the spending cap. Elections Canada adds that the registration requirement “leads to increased transparency” and has been in place “for nearly 20 years”. Helpfully, I suppose, the statement concludes with an acknowledgement that the rules “can be complex”, and Elections Canada is happy to answer questions about them.

The rules are indeed somewhat complicated, as I explain below. But the bottom line is simple enough. Despite the officials’ protestations, NGOs ― be they environmentalist or other ― have a point when they say that they are being muzzled. To some extent, that’s what the Canada Elections Act is designed to do; to an even greater extent this might be an unintended consequence of the Act’s pursuit of transparency, but an entirely predictable one. The issues are well known; I, for one, raised them in my statement to the House of Commons Select Committee that considered the latest round of amendments to the Canada Elections Act. The only surprising thing is the degree to which people still end up being surprised when problems of sort arise.

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The Canada Elections Act‘s regulation of political spending is predicated on the idea that attention during election campaigns should be focused on politicians ― individual candidates and political parties, especially parties. Parties, if they run candidates in all ridings, are able to spend tens of millions of dollars on advertising ― which they are entitled to buy at favourable rates, in addition to an allowance of free airtime. Non-politicians ― that is, individuals, labour and student unions, corporations, and NGOs ― are known as “third parties” in the election law jargon and, as I explained here, their participation in electoral debates is viewed as anomalous, indeed suspicious, and is strictly limited.

One set of limits concerns the amounts of money third parties are allowed to spend, which are only a small fraction of the spending allowed political parties. The Supreme Court has upheld the limitation of third party spending during election campaigns, notably in Harper v Canada (Attorney General), 2004 SCC 33, [2004] 1 SCR 827, although there is good reason to be critical of that decision, which I have even rated as one of the worst in the last fifty years. (As I noted here, the High Court of Australia was also quite skeptical of Harper in a recent decision.) Last year, Parliament enacted further limits that apply even before the formal campaign begins, and their constitutionality has not yet been tested; Harper, in my view, does not dispose of the question.

In addition to spending limits, “third parties” are also subject to onerous registration and reporting requirements. Some of these are the cause of the latest dust-up. Specifically, Division 1 of Part 17 of the Canada Elections Act imposes such requirements on “third parties” that incur more than $500 of expenses on, notably “partisan activities” and “partisan advertising” during the “pre-election period”, which begins on June 30 of the year for which a fixed-date election is scheduled and ends with the start of the election campaign. During the election campaign itself, governed by Division 2 of Part 17, “election advertising”, as well as “partisan activities” count for the spending thresholds that can trigger registration and reporting requirements.

The definitions of “partisan” and “election advertising”, found in section 2(1) of the Canada Elections Act, are very broad. The former term “means the transmission to the public by any means during a pre-election period of an advertising message that promotes or opposes” a party or a candidate, further defined in section 2(7) as “naming”, “identifying” (“including by … logo” or picture, as the case may be, and “providing a link to an Internet page that” names or identifies the party or candidate. “Election advertising” includes the same things as “partisan advertising”, but also “taking a position on an issue with which a … party or candidate is associated”, even without naming that party or candidate. Since issues with which no candidate or party “is associated”, come election time, are about as common as colour pictures of a Maple Leafs Stanley Cup parade, the definition of “election advertising” encompasses pretty much any advertising that has anything to say on matters of government or policy.

Now, some means of communicating with the public are exempted from these definitions. In particular, the exemptions cover anything that the media will print or broadcast without charge to the speaker ― things like quotes in news items, interviews, and op-eds. Also exempt are organizations’ communications with their members, shareholders, or employees, as well as “the transmission by an individual, on a non-commercial basis on the Internet, of his or her personal political views”. Note, though, that on its face the latter exemption doesn’t cover ― indeed, it rather pointedly excludes ― a group’s or an organization’s online communications, even if not paid for (for example, tweeting under the organization’s handle). And of course, any communication that the media are not interested in carrying free of charge will count as an advertising. In effect, for groups and organizations, the media are the gatekeepers of their ability to communicate with the public without having to register as “third parties”.

So what’s the big deal about registration? Well, although you won’t know it from the Elections Canada statement linked to above, registration doesn’t just mean filling out a form. There are a number of other requirements. To begin with, unions and corporations cannot register before their board has adopted a resolution authorizing them to incur expenses on “partisan” or “election advertising” (sections 349.6(5) and 353(5) of the Canada Elections Act). All “third parties” are also required to have a “financial agent” who will be responsible for collecting money to be spend on “partisan” or “election advertising” and for spending it (sections 349.7 and 354). These transactions must be done through a separate bank account (section 358.1) After the election is over, a detailed report on the money collected, advertising taken out, and costs incurred must be filed (section 359). And this is not all. Those “third parties” that spend more than 10,000$ are also required to file interim reports during the course of the election campaign and, most significantly, to appoint auditors (section 355) and file the auditor’s report on their spending (section 360).

Needless to say, this is all quite costly, at least in time, but also ― especially for those third parties that spend more 10,000$ ― in money. Big trade unions, whose budgets are extracted from workers who don’t get a say on whether to contribute or on how the money is spend, may not be especially troubled by these costs. But for NGOs, whose income comes from voluntary (albeit taxpayer-subsidized) donations, and which need to be much more careful about how they spend it, compliance with the Canada Elections Act may be too expensive. From their perspective, the sensible if unfortunate thing to do may well be to keep quiet for the duration of the election campaign, or even starting with the beginning of the pre-campaign period.

This means that for a period of almost four months preceding the election ― the period when the most people pay attention, even if it’s still sporadic and fragmentary attention, to political and policy issues ― civil society organizations may indeed be prevented from expressing their opinion about politicians, except to the extent that the media will let them. Again, the bigger and better-known you are, the less of a problem this may be for you. Smaller groups, whose views are (naturally and fairly) of less interest to the media, will find it more difficult to get across to the voters. The more unusual voices, in other words, are the ones who are the most at risk of being silenced ― in effect if not, perhaps, in intent ― by the Canada Elections Act.

And of course even for larger groups, having to pass through the media means sound-bite-sized interventions have a much better chance of getting across to the voters than anything more serious. Say that a politician or party is anti-environment, or pro-worker, or something equally inane, and the media may well pick it up. But they’re not going to run a detailed report card assessing the competing parties’ platforms on some issue ― but publishing it on an NGO’s website, let alone running it as an advertisement would mean having to comply with burdensome registration and reporting requirements under the Canada Elections Act.

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No wonder, then, that environmentalists are feeling muzzled and frustrated. And of course groups pursuing other agendas may be feeling that way too ― or may come to feel that way when the occasion arises. They have more than a little justification. And they shouldn’t be the only ones feeling wronged. The voters should be too. You may not miss the presence of a particular set of activists in the election campaign, but the rules that silence them silence the activists on your side too. You may not be all that interested activists generally have to say, but you should be interested in politicians’ feet being held to the fire.

The ostensible rationale for registration and reporting requirements is that they serve to promote transparency, in addition to assisting in the enforcement of spending limits applicable to “third parties”. It is on that basis that the Supreme Court upheld those requirements that apply in the course of the election campaign ― although not those applicable in the pre-campaign period, which weren’t yet in the Canada Elections Act ― in Harper. Yet one needs to weigh the value of transparency against the costs that its pursuit imposes on those subject to the Canada Elections Act ― and, as I have just explained, on the voters who are being deprived of important contributions to the electoral debate.

The Harper majority’s analysis on this point was quite perfunctory. There is no real discussion of compliance costs and their deterrent effects. Instead, the majority is content to baldly assert that “[t]he appointment of a financial agent or auditor is not overly onerous. Rather, it arguably facilitates the reporting requirements.” [145] Even worse, the majority did not at all consider what I think is the crucial issue: the thresholds at which the registration and reporting requirements kick in. All it said was that the requirements “vary depending on the amount spent on election advertising”. [145] Yet one can accept the principle of imposing such requirements on heavy spenders while also acknowledging that the existing rules go much too far.

In New Zealand, “third parties” are not required to register until they spend NZ$13,200 (ca. C$11,000); more detailed reporting requirements only apply once a “third party” spends NZ$100,000. (Even then, third parties aren’t peremptorily required to provide an auditor’s report, although they may be asked to do so.) These strike me as rather more reasonable figures than those in the Canada Elections Act, though even they should probably be multiplied several-fold to account for the fact that New Zealand’s population is only a small fraction of Canada’s.

It is difficult to believe that a “third party” spending a few thousand, or even tens of thousand of dollars is going to have any substantial impact on an election by itself. At most, it may be successful enough in getting other people ― voters, media, or politicians ― to discuss the issues it is raising. It is this discussion, rather than anything published on an NGO’s website or even a Facebook ad, that might, conceivably albeit theoretically, matter. In the abstract, this discussion might be enriched by more disclosure. In practice, the very real costs of the disclosure requirements end up preventing the conversations from happening at all. I fail to see how the voters benefit from this.

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As Elections Canada points out in its response to the environmentalist groups, the “advertising during the election period has been subject to the Canada Elections Act for nearly 20 years”. This is true. (As noted above, rules on advertising in the pre-election period are new.) For about half of this time, it has been known, at least to those who study these things, that the rules tend to hobble not business interests, but labour unions and civil society groups. Colin Feasby wrote about this in 2010; I did (in the context of Québec elections, which are subject to similar but even more draconian rules) in 2012; also in 2012 Tom Flanagan came out in support of rules like those in the Canada Elections Act, whose enactment he had opposed, with the declared intention to muzzle unions; I updated Dr. Feasby’s findings in an article published in 2015. And in my statement to the House of Commons Standing Committee on Procedure and House Affairs when it was studying amendments to the Canada Elections Act last year (which, among other things, introduced restrictions on “third parties” in the pre-campaign period) I specifically mentioned both the registration and reporting requirements’ tendency to muzzle civil society, and the needless low threshold at which these requirements apply. Needless to say, that had no effect on the resulting legislation.

Yet at every election the impact of restrictions on “third parties” seems to surprise. It happened in Québec in 2014, when the Chief Electoral Officer tried censoring a short documentary a group of citizens had produced to oppose the election of the Parti québécois and the enactment of its “values charter”. Eventually, the Chief Electoral Officer changed his mind; but he was wrong to do so. It happened again in Québec in 2018, now with environmentalist groups being targeted. And now it’s happening at the federal level. The system, one might say, is working. It was designed to shut down political debate not dominated by politicians or the media. That’s what it’s doing.

It will be obvious that I don’t think it’s a good system. Like the National Post’s Chris Selley, I think the rules need to be changed. Whether any restrictions on political spending are justified is debatable but, as noted above, one can accept the premises of Canada Elections Act and still support relaxing its requirements a great deal. Ideally, the next Parliament will take up the issue. But there is also room for litigation. Certainly rules on pre-campaign spending, whose constitutionality has not yet been tested all the way to the Supreme Court can be challenged. But perhaps even the registration and reporting rules upheld in Harper could be attacked, provided that the courts are forced to consider solid evidence of their pernicious effects.