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Levelling the Playing Field: Reconsidering Election Financing

Election financing rules play a critically important role in democracy in a number ways:
  • Caps on individual donations, and restrictions on types of donors (e.g. no corporations or unions) reduce the capacity and the public perceptions of capacity of specific donors to influence favourable treatment through large donations.

  • Caps on spending by parties and by individual candidates during election campaigns limit the advantage held by parties with superior financial capacity.

  • Alternatively or additionally, publishing the names and addresses of all donors contributing over a certain amount provides transparency and a natural check on the provision of large donations.

  • Taxpayer subsidies for campaign spending to all parties that gain a certain threshold of voter support reduce the dependency of all parties on individual donations and, depending on the threshold, increase access to elected office for small and new parties.

Across Canada and beyond, the trend has been to reform election financing systems to increase transparency, ensure fairness, and promote participation. In PEI, legislation was first passed in 1988 and then updated significantly in the spring of 1996. Since then, only housekeeping changes have been made to the Election Expenses Act, although voluntary improvements to practices have occurred in some instances. In the current context of debate about electoral systems, various matters regarding election financing might be addressed, including the following.

  1. Restrictions on who may donate: Currently, contributions to a political party or election campaign in PEI may be made by individuals, corporations, and unions, with no requirement for residency. This is similar to the majority of other Canadian jurisdictions; currently, only Canada, Quebec, and Nova Scotia restrict donations to resident individuals, while Manitoba restricts donations to individuals, resident or otherwise.

  2. Caps on individual donations: Currently, there are no upper limits on how much an individual donor, either a person or a corporation or union, may give in Prince Edward Island. The majority of provinces (Nova Scotia, New Brunswick, Quebec, Ontario, Manitoba and Alberta) currently have maximums ranging from $1,000 (in Quebec) to $6,000 (in New Brunswick.) Federally, the limit on individual donations is $1,500.

  3. Caps on campaign spending: The Election Expenses Act sets out limits on the amount that may be spent during the campaign period, which is defined as the period from the dropping of the writ until three months after ordinary polling day:
    •  Total expenses province-wide incurred by a registered party or any person, corporation, trade union, unincorporated corporation, or organization acting on its behalf are capped at an amount equal to $9.00 per voter in the districts in which the party is competing.
    • Total expenses incurred by any individual candidate or any person, corporation, trade union, unincorporated corporation, or organization acting on his or her behalf are capped at $2.63 per voter in the candidate’s district.
    Should spending at either level exceed those limits, the amount of subsidy if any (see below) shall be reduced by the amount of the excess. The Act also provides for a fine of up to $1,000.

  4. Taxpayer subsidies to the electoral process: Currently, the Election Expenses Act provides for a subsidy to candidates winning at least 15% of the vote within their ridings.5 This funding support recognizes the value of a vibrant electoral process to our democracy, and helps to reduce the dependency of candidates and parties on individual and corporate donations. It also recognizes and mitigates the impacts of stricter campaign financing rules. Following the May 2015 election, however, the system has been criticized for setting the bar too high at 15% of vote share, and thus disadvantaging small or new parties with province-wide rather than regionally concentrated support.
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