No More Party Favours

As Canadian political parties fight their way through highly visible election campaigns, a second, quieter campaign is waged. This second campaign is not geared at the average voter, but at the wealthy interests that provide most of the money for the visible campaign. And while success of the public campaign is measured in votes and seats, success of the "stealth" campaign is measured in dollars, as well as how effective the party is at hiding from public scrutiny its efforts to reap large financial contributions.

In classic Canadian fashion, we look to the United States to determine the standards of "clean politics." When we see the staggering cost of running for elected office, and the blatant influence and access that money can buy in Washington, we breathe a collective sigh of relief, intuitively thinking that our system does not suffer from these deficiencies.

However, as noted in a study of the 1988 federal election by Donald Macdonald, then-chairman of the Ontario Commission on Election Finances, Canada spends more on elections per capita than the United States. Moreover, he noted, "[i]t is easier to obtain reliable data on United States' spending because all major expenditures must be reported to the Federal Election Commission (FEC). These include expenditures not only by parties and candidates, but also the nearly 5,000 Political Action Committees (PACs) established by corporations, trade unions or public interest groups."

The lack of disclosure in Canada is troubling, particularly given how political fundraising occurs.

A majority of the money raised by the Liberals and Conservatives is from companies. The Liberals, for example, consistently raise more than half their funds from corporations, and 20 percent from just 100 corporations. Even the Reform Party has had steadily increasing success in courting corporate donors, from 8 percent of its total donations in 1993 to more than 15 percent in 1995. And while the NDP takes in only a small amount from companies, one third of their donations during the 1993 election were from unions.

These corporations and unions may have vested interests in particular government policies.

And yet the Bloc Quebecois, which voluntarily adheres to Quebec's election laws that ban corporate donations, has demonstrated that candidates can get elected without corporate cash.

In addition, parties often send out invitations to lavish fundraisers. In April, major Liberal supporters were given the opportunity of special access to the Prime Minister at a summer-time gathering at Chrétien's official residence for a $1,000 fee. Such pay-per-view fundraisers are not uniquely Liberal affairs. They are major revenue earners for whichever party is in a position to capitalize on the power of governance. In 1990, for instance, the Tories' reaped $1.7 million from dinner fundraisers, three times what the Liberals netted from such events at the time.

On occasion, party members may choose a more direct fundraising approach. Last August, David Walker, chair of the House Industry Committee about to review Canada's drug patent legislation, sent a fundraising appeal to the very companies affected by the review, Canada's large pharmaceutical firms. The letter, signed by Walker's fundraiser Harvey Zimmerman, reviewed the activities of the Committee and highlighted that "[i]n the coming year, David will be involved in a number of issues, including a review of pharmaceutical legislation and a reform of the banking system." It then invited company representatives to a fundraising dinner.

For the companies, which had a great deal at stake in the legislation, the timing of the letter likely did not go unnoticed.

What was remarkable about the letter was the lack of public attention it received. Opposition members, rarely at a loss for words when the opportunity arises to embarrass the party in power, scarcely commented on it, saying only that it was a tactic also used by other MPs.

Politicians and corporate executives argue that donations and lobbying do not affect how governments decide on policy issues, and do not, in fact, create conflicts of interest. But common sense says it is unlikely that companies would invest in these tactics without receiving something in return.

Moreover, under the current ethics code for public officials, the standard is not whether an actual conflict of interest has occurred, since such conflicts are nearly impossible to prove. The standard is whether there is an appearance of conflict of interest, because if the public perceives the system to be tarnished, public trust -- key to the system's survival -- is eroded.

Parliament placed electoral financing under close scrutiny in the 1991 Lortie Commission. The many recommendations of the Commission's report, none of which have been acted upon, include making disclosure of party donations and expenses more comprehensive, timely and publicly accessible through a computerized database. Currently, information about annual party donations are not available until midway through the following year, and in a cumbersome paper format. In contrast, the U.S. requires monthly donations in presidential elections to be disclosed in a public database.

In addition, donations should be subject to limits, such as in Quebec, which has a $3,000-a-year limit, with no corporate or union donations allowed. To compensate for the potential revenue shortfall parties may face from having to rely only on donations from individuals, more free-time radio and TV broadcasts should be made available for party campaigns.

Those who argue that limits on donations are too complicated and costly to administrate ignore both the benefits of limits, and the fact that there are always costs to maintaining democratic processes. However, if administrative burden is the main concern, there is another, simpler way of applying the principle of one person, one vote to the campaign donations system. Simply put, political parties could be financed with public funds. Instead of reimbursing donors for their donations through tax deductions and candidates who garner enough of the popular vote through refunds -- a system which currently costs the federal government about $20 million each year -- a fund for financing parties could be set up with a one-dollar-per-voter annual endowment. As proposed by Liberal MP Mark Assad, the fund could be distributed as follows: each party would receive a base amount; the remaining funds would be divided according to a formula that would take into account the percentage of the popular vote each party received during the previous election, the number of seats held by the party in the House of Commons, and the number of candidates the party ran in the previous election.

This system, while simpler than limits on donations, causes other problems such as barriers to new parties. Some combination of spending limits and public financing, however, would solve many of the problems with the current system.

Canadians deserve a democratic system where the potential for wealthy interests to have disproportionate influence on policymaking is kept to a minimum. Enacting these measures will help ensure that parties respond to voters, not vested interests.