This five-part series by John Whistler on local election financing is a good example of the kind of coverage Price Tags aims to increase: well-researched analysis by knowledgeable insiders, regardless of political persuasion. While we’ll be counting on voluntary contributions from people like John, we’d also like to commission more investigations and analyses of interest to people like you – readers of PT. You can help by making a contribution.
John has been active in election campaigns for over 15 years and has served as a financial agent for the Green Party at the federal, provincial and local levels. Currently he is the Treasurer of the Green Party of Vancouver, the Secretary of the Vancouver Pride Society and Treasurer of Pedal Society.
This is the first posting of a series about how the BC Local Elections Campaign Financing Act (LECFA) will impact the upcoming elections.
This posting describes the historical context.
WHY BC’S LOCAL ELECTIONS CAMPAIGN FINANCING ACT NEEDS REFORM
And how to do it.
Campaign financing regulations are often a forgotten component of the many factors that impact election campaigns and the democratic processes. Or debate centres around a few central issues, such as who can contribute and how much. It has been said “the devil is in the details” and this applies to LECFA.
Best-practices campaign financing regulations:
- have contribution and spending limitations
- facilitate a diversity of candidates regardless of their financial resources
- have auditable and transparent reporting that is simple for the public to understand.
Worst practices regulations:
- allow for unlimited contributions and expenses
- facilitate the election of corrupt politicians
- favour incumbent candidates
- have confusing and opaque reporting requirements.
The LECFA was first passed by the Liberal Provincial Government on May 29, 2014 and was then an example of worst-practices legislation. It was rushed through the legislature to take effect for the November 14, 2014 local elections and was retroactive to January 1.
Electoral organizations and candidates had to scramble to adjust to the new reporting requirements which were only published that summer. The initial LECFA regulations included:
- No contribution limitations. Corporations, unions and foreigners could contribute unlimited amounts. (The media referred to it as “the wild west”.)
- No public subsidies.
- Complex reporting requirements with multiple reporting periods, confusing expense categories and no administrative tools or requirement for audit.
The Elections Canada regulations are an example of better practices and are a retiring legacy of Jean Chrétien in 2004. They include:
- Individual Contributions limits ($1,575 in 2018) and contributors limited to Canadian residents only (contributions from corporations, unions and non-profits are prohibited).
- Public subsidies which include income tax credits for contributions, reimbursement of a portion of campaign expenses for candidates that obtain a minimum threshold of votes, and reimbursement of audit costs. (Steven Harper’s legacy was to eliminate the per-vote subsidies in 2015.)
- Simple and standardized reporting requirements. (Elections Canada provides a software package that political parties and candidates use to produce their disclosure reports in a standardized auditable framework.)
The provincial and local election financing regulations are regarded as a factor that caused the Liberals to lose the 2017 Provincial Election. There was widespread dissatisfaction at the corrupting influence of corporate, union and out-of-province contributions, in particular from the real estate industry at the local levels and the associated housing affordability crisis. It was a priority election promise of the new NDP government and their Green Party minority partner to bring in contribution limits and restrict contributions to individuals only.
I expect the NDP government faced a dilemma as the LECFA was widely regarded as worst-practices legislation and their political priority was to manage contribution limits at the provincial level. Should they start fresh with new best-practices legislation or amend the flawed LECFA as an add-on to manage the provincial limits? They chose to amend the LECFA and implemented contribution limits on October 31, 2017 ($1,200 per year, restricted to BC residents only).
That decision is now coming back to haunt the NDP. Further amendments were rushed through on April 27, 2018 to limit how electoral organizations can use their operating funds in an election year. (The next posting will explain how electoral organizations have operating bank accounts that are not subject to contribution limits or public disclosure reporting.) No doubt, after the October 20, 2018 local elections, there will be further amendments to the LECFA.
To give the Liberals some credit, one good thing from the LECFA was that the oversight, submission and management of disclosure reporting were centralized under Elections BC. Prior to 2014, oversight and disclosure reporting management was the responsibility of each municipality. Most municipalities did not have processes or the capacity to perform any oversight or review of the disclosure reports. Indeed, they were put in the uncomfortable position of reviewing the disclosure reports of their elected Mayor and Councillors, whom they report to.
The LECFA was a significant challenge to Elections BC, to take on the increased activities to manage local elections and to manage the numerous flaws that accompany bad legislation. For the 2014 elections they were able to react with new guides, forms and processes for the disclosure reports. Hopefully in the future, Elections BC will have the capacity to review the disclosure reports in a comprehensive fashion to ensure compliance.
For this to happen, the Provincial Government will need to consider further changes to the LECFA, further resources to Elections BC and election campaign subsidies.