or [email protected]
Money and parties
• History of party finance
• Recent data
• Courts and third party advertising
• The 2003 law
PC Fund of Canada – fundraising firm for the PCs
The new Cons might be using the same PR firm
Consider the Hill Times
The articles that we were to have read for class today – since they have been written, the
laws have changed again.
It’s a very dynamic environment.
History of part financing in Canada
The reason the MacDonald govt fell was because of the Pacific Finance Scandal (CPR in
the west). It became public, and the Liberals came in without an election. There have
been money scandals throughout history. They tarnish parties and the images of leaders.
Over time, whereas MacDonald was directly involved, party leaders and parties have
created an arms’ length group that raises money on their behalf. Generally, the leaders
get to pick the people who run this. The Cons, in this case, also put them into the Senate.
They are never an MP, though.
They are Bag Men. It’s a racketeer assigned to collect and distribute pay off money.
After WWII and until 2004, the Liberals and the Cons parties were heavily dependent on
corporate contributions, esp. in Toronto and Montreal and esp. on oil and fuel companies
in places like Alberta. There were also more direct mail campaigns.
All this money was raised by relatively autonomous fundraising committees that were
separated from the parties themselves. Often the leaders of these things are appointed to
the senate (but they are selected by the leaders in the first place).
Since 1874, you have to have an agent if you’re running, but there were always still
improprities. You didn’t have to disclose where you got your money from. And you
didn’t have to disclose wherehter it was in exchange for a favour. It didn’t refer to
political parites – they didn’t exist legally – they were voluntary organisations. By law,
there were only candidates. There were also no verifications of reports by agents. There were no sanctions imposed
and the law was not enforced if there was an issue.
Between 1965 and 1974 there were 4 elections. 26% did not report their finances. This
was illegal. Some were elected, but no one was prosecuted.
In the 19 century, 1891, the dominion elections act was modified because of another
scandal. It was now illegal to promise favours and appointments in exchange for funds,
but it was a useless law because nothing changed.
The Beauharn Weau Scandal – Mackenzie King nearly lost PMship and leaving
disgraced. Afterwards, he wanted to protect himself by raising money but purposely not
knowing anything abou tit. They are now autonomous. It’s THEIR job to comply with
The dominion elections act is now the Canada elections act – it has been amended several
In 1908, American influence, therefore now says corporations can’t contribute to the
elections. By 1920: in 1919 there were labour strikes. Now the law changed to prevent
unions also from giving money. No one was prosecuted, but there were under the table
In 1930 – legislation changed so that unions could now contribute, as well as
corporations. Therefore the Beauhorn Wow scandal broke out.
There are many bills that die in parliament.
Money is the mother’s milk of politics – Chretien. It’s like grease – lubricating oil – it
will give after putting it on a rusty screw. You may not notice it at first, but eventually it
gets through. We keep changing the law, but the money gets through always, no matter
what you change the law to. There are too many loopholes.
There were failed attempts in the 30s and 40s. Then in the 40s 50s and 60s,
__________. In the 60s the sentiment for reform grew a lot – form the party organisers
themselves. We had 5 elections, and we also were in a TV period – they wanted changes
that would allow them to raise enough money. There was also a corrupt Duplessis
regime – it wanted kick backs. Quebec was the first govt in Canada, via the Quiet
Revolution, to completely overhaul the system.
It limited financing and also gave reimbursement to candidates; also gave legal status to
parties (the Quiet Reform). Barbeau Commission (Lib 1964-66); they had the most
elaborate study of election finance ever done until the Lortie Commission.
1966 recommendations, but nothing happened until 1974. legally recognised, registered,
responsible for financial activity, financial equality for candidates and parties, permitted free mailing privileges as partial reimbursement, and also free tv and radio time, limited
in how much they could spend per voter, restrictions on when to run ads (only in last 4
weeks of campaign), must disclose income and expenditures – parties and candidates, tax
credits to voters who contribute, etc. Led to the 1972 bill, which died. Then in 1973, a
Trudeau minority, C203 (Election Expenses Act, 1974). This act is the most significant
one. It was dramatically modified in 2003.
The reasons for its adopted were: (a) media and public opinions, (b) provinces into
election finance regulation, (c) water gate and other issues, (d) the NDP held the balance
of power and it was their issue for a while. The NDP wanted to give credits to people,
but it should be: the lower amount you give, the bigger percentage you get back.
The income tax act, the broadcast act and other acts were also modified. Now parties
were liable to the law if they broke the law.
Now parties and candidates can get reimbursed, depending on the amount of percentage
of votes you get.
The rationale is to increase public confidence in the electoral process. The 1974 act was
revolutionary: (a) it controlled the spending of the parties, (b) provided public funding,
(c) the tax system now incorporated political contributions, and (d) it required financial
statements of the central parties but not of constituency associations or candidates (this
was the black hole of election finance – because MPs didn’t want their finances
revealed). They argued that this would equalise things for smaller parties.
Party transfers – were permitted until 2003 (in and out scandal of the Cons). Basically,
you write a cheque to the Con Fin of Canada, and then they send it to our riding. So there
are 90% of the funds from this one donor – this prevents people from being shown as
Does money buy elections? The NDP spent $20,000 more than the other parties. But
they are still not rewarded in the same way. The Bloc spent the least amount of money,
and look at how many seats they’ve got.
But of course money counts, yet there are other factors that are more