Finance bill flawed

OTTAWA--Many of the measures being proposed by the federal government's proposed Bill C-24, intended to improve political finance rules, are being lauded by the watchdog organisation, Democracy Watch. But they raise concerns about the excessively high donation limits and public financing amounts that are being permitted under the new bill.

On the positive side are the disclosure requirements for nomination contestants, riding associations and party leadership candidates; the spending limits for nomination contests; and the ban on corporate, union and other organisation donations to political parties and to party leadership candidates, including penalties for any attempt to violate the ban.

Unfortunately, Bill C-24 proposes a system that will allow excessively large donations by individuals; secret donations to the slush funds of members of parliament (including cabinet ministers); delayed and vague donation disclosure requirements; donations from corporations, unions and other organisations; and more public funding than the parties should need.

A key flaw in the bill is that individuals will be allowed to donate an annual total of $10,000 to each political party (including its riding associations and candidates) -- an undemocratically high amount.

In Manitoba and Quebec, individuals are limited to an annual total of $3,000 in donations, to all parties combined.

"Only a tiny minority of wealthy Canadians can afford a $10,000 political donation," says Aaron Freeman, a Democracy Watch member who also chairs the national organisation, Money in Politics Coalition. "The limit on individual donations must be affordable to most Canadians, and low enough to make abuses, such as funnelling of donations, very difficult."

Another serious flaw in Bill C-24 is that MPs will still be allowed to have a secret slush fund to receive unlimited, secret donations without any disclosure required, he notes. The government claims that the bill prohibits such funds from being used for "political purposes," but this rule will be almost impossible to enforce, and such funds could still be used by politicians in ways that will benefit them politically or personally -- such as for causes or events they support, or for their retirement, or for holidays.

"Continuing to allow MPs and cabinet ministers to receive unlimited, secret donations is a recipe for corruption," Freeman says. "Limits and disclosure requirements must apply to all donations or politicians will continue to be influenced behind closed doors by wealthy corporations, interest groups and individuals."

Bill C-24 also allows a delay of up to 18 months in disclosing a donation, possible because parties and riding associations will not have to disclose their annual list of donations and donors until five or six months after the end of each calendar year. And with the date of the donation not having to be disclosed, it will be impossible to connect a donation with a particular government action.

In addition, adding a measure requiring individual donors to disclose their place of employment and corporate or union affiliations would be key to preventing the funneling of donations abuses.

Another problem area is that corporations, unions and other organisations will be allowed to donate $1,000 combined annually to nomination and election candidates and riding associations, even though these entities don't vote and already have enough levers of power. This will also add to the difficulty in determining who is donating to politicians.

If the bill ends up allowing corporate donations, disclosure of each donating corporation's parent company must be required.

"In the United States, donations are disclosed monthly and key information, such as employer and parent company, is listed," Freeman says. "Canadians have a right to know, in a timely way, exactly who is bankrolling the political system."

Democracy Watch believes the amount of public financing proposed in Bill C-24 is too high. The watch group calls for a lowering of the proposed $1.50 vote subsidy for each political party (based on the number of votes the party received in the last election). The proposed subsidy would likely provide even more annual funding for parties than they currently receive -- especially if the overly high $10,000 annual individual donation limit is kept as part of the new system.

The Money in Politics Coalition, comprised of 50 groups and coordinated by Democracy Watch, will push the federal government to correct these undemocratic flaws in Bill C-24 before it is passed by Parliament.

Aaron Freemon can be reached at Democracy Watch in Ottawa at 613-241-5179. Visit the website of the Money in Politics Campaign at