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(August 2003)

In June 2003, the federal government passed Bill C-24, a long overdue updating of Canada's political fundraising rules.  Democracy Watch and the Money In Politics Coalition (organized and coordinated by Democracy Watch since 1999), have been the leading citizens' voice advocating changes to these rules to make them more transparent and democratic.

The new law, which will come into force January 1, 2004, includes the following measures:

Each of these measures are part of the recommendations advocated by the Money in Politics Coalition.  Several, including the quarterly donations reporting requirement for parties and disclosure of the terms of bank loans, were specifically passed as amendments by a parliamentary committee in response to Democracy Watch's efforts.

There are some elements of the law not supported by Democracy Watch, as follows, and these flaws must be corrected in order to have a fully transparent, democratic, and ethical federal political donations system:
Donations can still be made in secret directly to federal politicians, as long as the politician does not use the secret money for "political purposes."  This loophole will encourage donors to continue to funnel money to politicians in secret, a recipe for corruption.

Also, donations made during election campaigns still do not have to be disclosed before the vote takes place on election day.  This loophole means that voters will not have a right to know who is bankrolling candidates and parties in federal elections.

In addition, new public subsidies will more than compensate the parties for the expected shortfall in revenues from the new donation limits.  In total, parties will receive about $40 million annually in public funding.  The proposed subsidies, including a provision granting parties an annual subsidy of $1.75 per vote received in the previous election, are excessive, and will not encourage the parties to increase the base of their support.

Also, the new law will increase the election campaign spending limit for parties by roughly $1 million.  Typically, only the governing party spends the maximum amount allowed, so this measure will increase the advantage of the governing party in elections.

Overall, to be fully transparent, democratic and ethical, the federal political donations system still needs to be strengthened through the following measures:

However, the positive measures in Bill C-24 will mean it will be more difficult for those who bankroll Canadian politics to remain in the shadows.  And while there is still work to be done to improve how federal political parties and candidates are funded in Canada, and the transparency of the political donations system, the law will help make running for office more accessible, and political leaders more accountable.

For a complete analysis of improvements made to the bill by the committee that were eventually passed into law, please see: Bill C-24 Analysis (June 6, 2003)

For an analysis of Bill C-24 as it was when it was first introduced in Parliament , please see: Bill C-24 Analysis (March 5, 2003)

Duff Conacher, Coordinator of Democracy Watch
   Chairperson of the Money in Politics Coalition
Tel: (613) 241-5179
Democracy Watch's Money in Politics Campaign

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