Speech: S-239 – An Act to Amend the Canada Elections Act

Honourable senators, I rise to speak on Bill S-239, an Act to amend the Canada Elections Act.

I want to commend Senator Frum for raising the issue of foreign influence in Canadian elections. I certainly welcome her efforts, and from everything we read in the media these efforts are certainly extremely timely.

As we all know and read, in jurisdictions south of our border and indeed outside our continent, foreign interference during elections is the topic of the day. From fake news to hackers, the world is alive to the very real and present danger facing our democratic institutions. For instance, we learned this week that Russia-backed fake news reached 126 million Americans through Facebook during the 2016 presidential election. Canada is certainly not immune to this.

But Canada also has its own unique context. Currently our laws allow foreign corporations, groups and individuals to make unlimited and unreported contributions to third parties that engage Canadian electors. This type of foreign contribution is entirely lawful under the current law so long as these contributions are made outside an election period. Foreign funding cannot be used to produce or share an election advertisement, such as in print, TV or radio, but it can be used, strangely enough, for surveys about voting intentions, telephone calls to voters and establishing websites, et cetera.

This bill is almost all about third parties. I thought I would spend a little time telling you who third parties are. Third parties include the likes of the National Citizens Coalition, the Canadian Medical Association and LeadNow, an organization that was referenced by Senator Frum in her second reading speech.

Some third parties constitute themselves simply for the purpose of engaging with voters during an election. However, the larger share of third parties are those that engage on public policy issues year round, and some register as third parties to engage voters directly during the writ period. This legislation, Bill S-239, speaks to all of these groups, regardless of their electoral intention or broader purpose and whether or not they choose to register.

I should note that in this era of online engagement and mobilization, the number of third parties that have registered with Canada elections has grown exponentially, from 54 to 114 in the last election, and the predictions are that this number will continue to grow.

So it is no wonder that issues around third party involvement and funding engagement have grabbed the attention of the public. Minister Gould, the Minister for Democratic Institutions, has been mandated to conduct a review of third party spending limits.

Earlier this year, the Senate’s Legal and Constitutional Affairs Committee tabled a report on this issue after studying the annual reports of the Chief Electoral Officer. In its report, the committee concluded that the Canada Elections Act must be modernized to protect Canadian electors properly from improper influence. The report called for a re-examination of the third party regime. Senator Frum has said that the committee’s report was the impetus for her bill that is before us today.

Senator Frum’s approach is very straightforward. It will prevent registered third parties from accepting any foreign funds, not only for election advertising but for anything related to an election. It also expands the list of foreign contributions, clarifies further who is a foreign entity and enhances the fines associated with its contraventions.

The issue, therefore, of how foreign money is deployed would be irrelevant because there would be no foreign money. The definitions of advertising that could be paid for by foreign money would also become irrelevant because, again, there is no foreign money. And the issue of when the money could be deployed, how far ahead of the election, et cetera, would likewise become moot because there would be no foreign money.

This is a very clean and simple fix, and to some extent I agree that it is exactly that — clean and simple — but as we all know, nothing in life is quite as simple as it may look.

I am certainly no expert on this issue. Because of that, I had to read and research and I contacted many third party organizations on all sides of the political spectrum, academics and interested parties. The questions that I raise today are a result of these conversations and my review of both the intended and unintended outcomes of this bill.

My first question is: Have significant consultations been undertaken to support these changes?

My second question is: Does Bill S-239 fix the problem of foreign funding and influence, and in doing so, does Bill S-239, even if unintentionally, create an unfair advantage for some voices over others?

My third question is: Does Bill S-239 provide sufficient clarity to the third party regime?

My fourth question is: Will Bill S-239 create unexpected challenges for Canadians and their capacity to participate in Canadian elections?

And finally: Will Bill S-239 modernize the Canada Elections Act to reflect the modern era in which foreign influence pervades?

Let me start with my first question on the issue of consultations. The Legal Committee’s report examining this issue was based on two hearings and the testimony of three witnesses. At that time I was a member of this committee, and these were very compelling witnesses. No outside stakeholders from third parties and no academics were consulted, and I am not sure to what extent Senator Frum engaged in consultations.

I raise this point, honourable senators, because changing the electoral system goes to the very heart of our democracy. We must ensure that any changes have widespread support.

The CEO of Elections Canada, whom we did hear from, Marc Mayrand, said during the electoral reform debate that “changing the rules of that competition . . . should require a broad consensus — the broadest possible.”

I believe we need that standard here, and I am not sure we have it — at least not yet.

My next question focuses on foreign influence and foreign funding.

Section 358 of the current Canada Elections Act contains a list of foreign contributors that third parties cannot accept election advertising-related funds from. This includes persons who are not Canadian citizens or permanent residents, as well as foreign corporations and associations that do not have a presence in Canada. Senator Frum’s amendment adds to this list by including trusts or partnerships with at least one member who is not a resident of Canada.

However, a significant loophole remains. A bill, honourable senators, is important not only for what it sets out to do but what it leaves aside. Whilst the bill would prevent the flow of any foreign money into Canada for the purposes of funding third parties, there is no clause that prevents a foreign corporation from facilitating such donations through a Canadian subsidiary. Therefore, Canadian subsidiaries may safely give voice through donations to their foreign, private or sectoral interests.

For example, General Motors could foreseeably fund a third party through GM Canada to carry out an issues-based campaign for bailouts or against unionization, as the case could be. Starbucks could equally fund a third party through Starbucks Canada to engage the electors, let’s say, on food security issues. Facebook could easily engage with electors through Facebook Canada to focus on digital privacy. In contrast, no such possibility would exist for those groups — like foreign foundations, civil society groups, affinity networks, et cetera — that do not have a corporate or business arm in Canada but that may have a legitimate concern about a variety of issues. Conceivably, the vacant space could be filled with corporate interests. I do not believe this is the level playing field that we are looking for.

The Supreme Court, in the Harper case of 2004, placed significant emphasis on ensuring that we maintain a level playing field in our electoral system. For our justices, this was a key issue.

Honourable senators, this bill will certainly stop the flow of foreign money to third parties, but it will not stop the flow of foreign influence. It will create a significant and unfair advantage for business interests with subsidiaries in Canada.

My third question is the following: Does Bill S-239 provide sufficient clarity to stakeholders and to third parties, and will it impact on Canadians’ Charter rights?

The newly proposed section 331.2 states that no third party can accept a contribution “at any time” from foreign sources outlined in section 358, “for any purposes related to an election.”

According to the British Columbia Civil Liberties Association, this could place a non-partisan charity, not-for-profit or advocacy organization in contravention with the Canada Elections Act simply by accepting foreign funds that allow them to advocate and engage in conversations on public policy and go about doing their daily business. Third parties with public education campaigns that unintentionally mirror the platforms of one or more political parties or candidates may therefore be forced to consider efforts as election-related and may be accused, therefore, of political partisanship. If they do not register, it is possible that someone, somewhere, will file a complaint against them that would then need to be investigated by Elections Canada.

Let me provide an example. I ask that you recall how Canada’s response to the Syrian refugee crisis became a ballot-box issue in the 2015 election. Political parties, in October 2015, were forced to react to a groundswell of public compassion. In response, all the political parties in Canada during the election period made commitments — some were like this and the others were like that — to allow specific responses to the Syrian refugees and their resettlement in Canada.

Many of these commitments were grounded directly in the recommendations made by prominent advocacy organizations that have worked on refugee issues for several decades —many of which I was involved with —and that had been advocating for a compassionate response before the election and that will continue to advocate for a compassionate response after. This is what they do on a daily basis. These organizations often rely on grants from philanthropic organizations outside Canada to fuel their public policy research and engagement. Their efforts were entirely removed from the fact that an election was imminent, and therefore they did not register with Elections Canada, and I doubt they even ever thought of doing that.

Under this legislation, though, someone, somewhere, a citizen or an organization, either opposed or in favour of some particular political position of a party, it could be argued that they are politically engaged in this issue, and an investigation could ensue. I should remind everyone that Elections Canada does not proactively monitor third parties; it only monitors them when a complaint is issued.

Imagine that a complaint is issued. Third parties would have to turn themselves inside out to prove certain points. This could lead, I believe, to a tremendous advocacy chill at a time when, in fact, more voice is needed rather than less.

We must ask ourselves whether this bill unduly limits the rights of Canadians by limiting their right to freedom of expression. The Supreme Court has explicitly stated that any changes to elections must not infringe Charter rights.

Mr. Yves Côté reminded the Senate Legal Committee of the following:

The Supreme Court has been clear that in the political domain, that is probably where the values underlying the freedom of expression are at the highest, and where the courts will be the most attentive in ensuring that, if Parliament intervenes, it does so in a way that respects fundamental values.

Further, what else would be covered under the broad language of Bill S-239? The amendment says that no funding of any kind can be received by third parties for any expenses that are election-related. If these parties operate year-round on issues, would their overhead costs — like salaries, rents, websites — be covered? It is not clear; and without clarity, I fear that Bill S-239 would result in an avalanche of complaints.

My fourth question is the following: Will Bill S-239 create unexpected challenges for Canadians abroad and their capacity to participate in elections?

Colleagues, I think we all know that Canadians travel a great deal, and some choose to live overseas. There are 2.8 million Canadians who live abroad. While both sections 331.02 and 358 state that non-Canadians and non-permanent residents do not have the right to donate to third parties, it does not, in my view, sufficiently safeguard the rights of Canadian expatriates.

Simply put, many overseas Canadians will make donations online by using credit cards, in all likelihood issued by a foreign jurisdiction. Let’s say you are a Canadian citizen living in the U.K. and you use your U.K. credit card. The onus then gets put on third parties to prove, if called upon, that these donations were from Canadians. I’ve been told by third parties that they worry about this. They don’t know whether they have the capacity to find the proof that their donations were from Canadian residents or not.

I believe this is a simple problem. This is not where I have my greatest concerns. This is a simple problem and can be fixed, but it must be appropriately discussed and analyzed.

My final question is: Will Bill S-239 modernize the Canadian Elections Act to reflect the modern era in which foreign influence pervades?

Honourable senators, I believe that foreign influence in Canadian elections is not reliant simply on the flow of foreign money. Canadian electors will continue to be subject to foreign influence through the reach of online and social media platforms. This is where the biggest culprits may lurk and this is where I believe we must focus.

The truth is that the rules have been overtaken by technology and we could not have imagined this technology a few decades ago. This has placed an informal governance burden on Elections Canada and ultimately on social media platforms themselves that de facto have become public spaces of their own.

In the U.S., Republican and Democratic senators have joined together — yes, they have joined together — as they try to pass the “Honest Ads Act,” a bill that would require Facebook and the Googles of the world to disclose information about the political advertising campaigns targeting American electors on their platforms.

Here, meanwhile, the conversation has just started. Currently, Facebook determines what is and what is not a political advertisement — not Elections Canada. While Facebook may now be taking on initiatives to improve its transparency around election advertising, more needs to be done and we’re just starting the conversation.

I like what Mr. Bruce Anderson of Abacus Data and Summa Strategies writes in Maclean’s. He says, “We need better tools to protect our democracy from abuses we couldn’t have imagined when our rules were drawn up.” He asks for a task force that would bring together representatives from social media platforms, Internet service providers, news organizations and others to try and visualize modern political election rules.

I agree. We need to have a conversation about foreign influence and digital advertising online because this is really the big elephant in the room.

In conclusion, the question that this bill poses and the opportunity it gives us is important. I believe it proposes to fix a small part of the puzzle. Is it sufficient? Does it create unintended consequences? Does it have broad support? Should we in the chamber of sober second thought be looking at the big picture or the small leaky hole?

Yves Cote emphasized:

. . . in my view [it] deserves Parliament taking the time to look at the situation and to try to understand what has happened and what is likely to happen and then taking measures . . . .

The big picture tells us that foreign influence is more pervasive than any money attached to third parties. It tells us that we must strike a balance between allowing participation in a digital and global age while protecting Canada’s democracy. It tells us that people associate and agitate now in different ways, in different networks and in different movements, and that many of these movements cross national borders and national politics. This is indeed the brave new world that we must learn to navigate, negotiate and regulate.

Honourable senators, Bill S-239 is certainly timely, but we must consider whether it is the right fix for the problem. We must ask whether it will modernize the Canada Elections Act sufficiently, and we must be sure that there is support for this approach.

I would like to thank Senator Frum again for her initiative in tabling bill and for catalyzing this most important conversation.