Expert says change to election finance act may allow unlimited donations

A government amendment to Alberta’s election finance act creates a loophole that appears to allow unlimited donations to a political party through the candidate nomination process, an expert in election finance says.

Justice Minister Kaycee Madu introduced Bill 81, the Election Statutes Amendment Act, in the legislature on Thursday. 

The bill amends the Election Act, the Election Finances and Contributions Disclosure Act and the Alberta Personal Income Tax Act. The bill has yet to be debated in the legislature.

One of the bill’s amendments would allow unlimited contributions to candidates in nomination races, although these donations would not be tax deductible. 

Madu previously said the lack of a donation limit is not an issue because nomination candidates are not allowed to spend more than $12,500 on their nomination campaigns. 

But University of Calgary political scientist Lisa Young said the amendment may allow an unlimited amount of money to be transferred to the winning candidate’s election campaign — capped around $53,000 — or to the party. 

“I can’t find any mention in Bill 81 of amendments regarding the use of surpluses, so I have to assume that the provisions remain in place,” Young said.

“This absolutely creates a back door to solicit contributions above the minimum and then transfer them into the campaign.”

This would effectively circumvent the limit on donations to the campaign of a party’s nominated candidate.

“It makes it meaningless to say that you can only give [about $4,000] to a candidate who is running for election if you can give an unlimited amount to that candidate in the nomination, and then they transfer that over to the election,” Young said.

She said the loophole makes many of the legislative restrictions “almost meaningless.”

Negative impact on public trust

Young said the United Conservative government is going against the trend federally and in most provinces of tightening campaign finance laws.

“The government has not been able to give a rational response to why they are doing this. There is no reason for it.

“And I think it is going to have a negative impact on the integrity of the regulatory system and also on public trust in the system.”

Madu’s press secretary said he was unavailable for an interview. They did not respond to a request for a statement explaining why the government believes this amendment is necessary.

Young said it’s troubling because the amendment is contrary to the accepted reasons for limiting donations. 

Fairness is a major reason. Limits are employed to ensure candidates who are more likely to be supported by wealthy people don’t have an unfair advantage, she said. 

Another reason is to avoid even the appearance of a quid pro quo situation in which a person who gives a large donation to a politician can expect, for example, “either a policy concession or an advantage when it comes to bidding on government contracts,” Young said.

Reduced transparency of party finances

Another amendment proposed by Madu would eliminate the requirement for constituency associations to provide quarterly financial reports to Elections Alberta.

Young said the Alberta NDP traditionally raises money through its provincial office while the UCP fundraises through constituency associations. 

“This is just essentially an accounting difference,” Young said, adding that the public will have less information about the party’s fundraising and donors.

“This is not a move forward from the point of view of transparency.”

The NDP has raised more money than UCP for the past four quarters. 

The bill also increases the amount that parties can spend on a campaign. The NDP government capped campaign spending at $2 million in 2018 but a proposed new formula – $1.16 per voter – would raise that amount to about $3.27 million.

Young said that nearly a 50 per cent increase could mean much higher spending on campaigns in the future. The increase is not out of line with other provinces, she added.

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