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Canada Elections Act - Bill S-239

Honourable senators, I rise today to speak to Bill S-239, An Act to amend the Canada Elections Act (eliminating foreign funding).

This bill, introduced by Senator Frum, closes a loophole in the Canada Elections Act that allows foreign involvement in Canada’s electoral process — a loophole that allows unlimited foreign money to pour into Canada to be used by third parties to influence and distort Canadian elections. This is not a hypothetical problem. It is very real. It has had an impact in the past and will have a greater impact in the future if we don’t fix it.

There were 114 third parties registered in the 2015 federal election, up from 55 in 2011, and they spent a combined $6 million in advertising alone. No one knows how much they spent in other election activities such as polling, event organizing or paid campaign staff because that information is not tracked.

And according to the Commissioner of Canada Elections, Yves Côté, in testimony last year at the Standing Senate Committee on Legal and Constitutional Affairs, third party involvement “will likely continue to grow.” He suggested it is time for Parliament to re-examine this issue “with a view to ensuring a level playing field is maintained for all participants.”

According to the commissioner’s office, there were 105 complaints about the activities of third parties in the 2015 election, up from just 12 in 2011. Much of the third-party involvement in the 2015 election was focused on defeating the Conservative government, and groups such as the Dogwood Initiative and Leadnow were funded, in large part, by foreign sources. For example, the Tides Foundation, a U.S. group that takes donations and washes them so that donors are anonymous, contributed nearly 700,000 to eight registered third parties during the last election year.

This is the same Tides Foundation that has spent tens of millions of dollars to try to shut down Canada’s resource sector. What those third parties did with that money is anybody’s guess because the Canada Elections Act, when it comes to preventing foreign influence in Canadian elections, has significant shortcomings.

I realize this is of little concern to some of my friends on the other side of the aisle, who were happy to see an international effort bring sunny ways to Ottawa. But we should all care about this. Last time, it was George Soros helping to decide who should govern Canada, but it might be Vladimir Putin or the Koch brothers next time. Unless we close the door to foreign funding, we are inviting them in.

Section 331 of the Canada Elections Act would lead most people to believe there is no place for foreign funding in Canada’s elections. Here is what it says:

No person who does not reside in Canada shall, during an election period, in any way induce electors to vote or refrain from voting or vote or refrain from voting for a particular candidate unless the person is (a) a Canadian citizen; or (b) a permanent resident . . . .

But Elections Canada does not consider donating money as contributing to inducement. Really, I find that extraordinary. They do not track donations that come in more than six months prior to an election, which means that a foreign state that wants to interfere in a Canadian election can contribute as much money as it wants to a registered third party, provided the donation is received more than six months before the campaign. Then, the money becomes indistinguishable from the organization’s domestically raised funds as far as Elections Canada is concerned. In an era of fixed-date elections, this is a loophole that must be closed.

To compound matters, the only prohibition Elections Canada puts on foreign money is when it is spent on advertising, and they use a very narrow 20th century definition of advertising. This bill clarifies and strengthens section 331 by specifying that donating money is a form of inducement too and that third parties are not allowed to accept foreign contributions for any purposes related to an election at any time.

It also makes it an offence for a third party to accept such contributions. It is a very simple fix for a very serious problem.

I find it surprising, first, that the government has not already acted on this and, second, that any parliamentarian could disagree with this bill. But we have heard from both Senator Omidvar and Senator Woo that they oppose this bill for various reasons, some of which I find astonishing. For example, Senator Woo, in suggesting that Senator Frum’s bill may be motivated by parochialism, makes the argument that . . . “foreign nationals may be conveying truthful information to counter untruths propagated by sources within the country.”

Maybe we should go to the United States or Europe? Maybe Angela Merkel could have used our help in the last election? I’d like to think Canadians are a bit more savvy than that.

Canadian elections are to be decided by Canadians, without foreign intervention. Both Senator Omidvar and Senator Woo believe Bill S-239 has a loophole because it continues to allow the funding of third parties by Canadian subsidiaries of foreign corporations. Senator Omidvar called this “a significant and unfair advantage for business interests.” Her concern is that foreign corporate interests could still influence Canadian elections by funnelling money through Canadian subsidiaries. While it is true that a corporate subsidiary based in Canada would still be able to contribute to a registered third party, so would a foreign-based trade union that holds bargaining rights for employees in Canada.

The reality is that many firms operating in this country are subsidiaries of large multinationals. There is no reason why these companies, which contribute to Canada’s social and economic well-being, should be excluded from playing a small role in the democratic process.

Another problem identified by both Senator Woo and Senator Omidvar was the risk of advocacy groups being unwittingly caught by the new rules. Senator Woo argued:

. . . potentially hundreds of policy advocacy organizations and charities . . . could be seen to be in violation of the act because they accepted donations from foreign sources . . . .

Senator Omidvar said a charity or non-profit could run afoul of this section simply by going about daily business of advocacy in public education. She cited a hypothetical scenario where a refugee organization could be at risk of facing charges under the Elections Act for advocating for a compassionate response to the Syrian refugee crisis.

With the greatest respect to both my colleagues, they are either creating a straw man to attack, or they have a fundamental lack of understanding of what is actually in Bill S-239.

First, the proposed prohibition on foreign donations to registered third parties is for purposes related to an election, not to prevent organizations from conducting their day-to-day affairs or advocating on public policy.

Second, and more important, this bill has no impact on most advocacy groups. It affects only those who registered with Elections Canadian as third parties, and it does not change any of the rules regarding registration or what is considered a third party.

Both senators raised questions of clarity, but I would submit that the problem with the current Elections Act is a lack of clarity and logical consistency. A $10 million cheque to a third party from a foreign entity, written six months and one day prior to a campaign is legal, while one written two days later is not.

An advertisement in The Globe and Mail is governed by the limits on advertising, but costs associated with producing content for a website, flyer, call centre or promotional event face no restrictions at all.

If clarity is the issue, it won’t be found in the current Elections Act or in the way it is interpreted or enforced by Elections Canada.

This bill moves it light years ahead in terms of clarity. Both senators questioned if this bill is a sufficient response to the multiple challenges posed by advances in technology. Does Bill S-239 really consider the big picture? I think Senator Gold raised the same question in his very thorough speech.

Senator Frum’s goal was never to solve every problem in the Elections Act. It was to solve this one problem: The bill is designed to tackle a very specific problem that was clearly identified in the 2015 election, and it’s a problem that election officials, past and present, have invited — indeed urged — Parliament to address.

Jean-Pierre Kingsley, who served 17 years as Chief Electoral Officer, in an interview with the Calgary Herald, said:

This back door whereby foreign money came into Canada must be shut. We have got to slam it shut for the sake of the integrity of our electoral system.

One final point. Senator Omidvar questioned whether sufficient consultation went into the design of this bill. There is no question that an individual senator or member of Parliament does not have the resources to consult to the degree that ministers’ offices can, but the Senate has a mechanism to deal with the problem. It’s called committee.

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