Peter Aucoin
Director of Research
PREFACE
Twenty-five years ago, following a review of the costs of election campaigns, the pattern of party finance and related issues, the Committee on Election Expenses (Barbeau Committee) issued its report. The Committee’s conclusions provided the basis for the 1974 Election Expenses Act, which led to what was then considered Canada’s most comprehensive regulatory framework for party and election finance. The main elements of the 1974 reforms were: limits on the election expenses of registered political parties and candidates; disclosure of parties’ and candidates’ revenue and spending; and public funding through postelection reimbursements to parties and candidates, as well as an income tax credit for contributions to either.
While amendments in 1977 and 1983 did not alter the main lines of the federal regulatory framework, developments during the past 15 years or so have led to calls for an assessment of its operation and effects. Some have asked whether the objectives on which the 1974 legislation was based are still being met - or, indeed, remain valid. A number of factors account for this, among them changes in party and campaign management techniques, the implications of the adoption of the Canadian Charter of Rights and Freedoms in 1982, the role of interest groups in elections and developments in the regulation of political finance at the provincial level.
The Royal Commission on Electoral Reform and Party Financing was mandated to consider, among other issues, “the appropriate principles and process that should govern … the financing of political parties and of candidates’ campaigns, including … the means by which political parties should be funded, the provision of funds to political parties from any source, the limits on such funding and the uses to which such funds ought, or ought not, to be put.” To assist it in carrying out these aspects of its mandate, an extensive series of research studies on party and election finance was undertaken by members of the academic profession, consultants and research analysts employed by the Commission. The principal studies are published in this volume and the four others in this research area.
The research projects in the party and election finance area were intended to assist the Commission in taking decisions on a number of issues at the heart of its mandate. In this regard, the studies in these five volumes are relevant to three of the six objectives of electoral reform referred to in Volume 1, chapter 1 of the Final Report: promoting fairness in the electoral process; strengthening the parties as primary political organizations; and enhancing public confidence in the integrity of the electoral process. These studies canvass issues relevant to these objectives, draw on comparative experience (both within Canada and elsewhere) and discuss possible reforms. In so doing, they address fundamental questions such as how to circumscribe the influence of money in politics; how to encourage greater participation in the financing of parties and candidates and in the electoral process, including the nomination stage; how to ensure a high degree of transparency in relation to political finance; and whether and in what ways public funding should be part of the system.
In considering possible reforms, the Commission looked at developments in this area at the provincial level (see Volume 3 of the Research Studies) and in other democracies. This volume includes four research studies on political finance and its regulation in the United States and Western Europe. Additional comparative work was carried out by Commission analysts; four research notes (on Great Britain, France, the Federal Republic of Germany and Australia) are to be published as part of the Commission’s Working Papers.
The first study in this volume, “The Regulation of Election Finance in the United States and Proposals for Reform” by Herbert Alexander, traces the evolution of the American federal regulatory framework since the early 1970s. He describes the framework as a hybrid: the highly regulated presidential campaign structure (with spending limits and public funding) contrasts with the congressional regimen (where, apart from disclosure and contribution limits, in Professor Alexander’s words, “the political equivalent of the free market reigns"). The study surveys major issues in debate in the United States and recent legislative proposals. There is also a discussion of the relatively comprehensive regulatory approach adopted by New Jersey, Minnesota and New York City.
Robert Mutch, in his study “The Evolution of Campaign Finance Regulation in the United States and Canada,’charts the development of federal legislation in the two countries, starting early this century. He concludes that scandal has been the most important factor in prompting reform in this area and discusses how scandals in the United States have influenced Canadian lawmakers. The concluding section of Dr. Mutch’s study analyses the impact of judicial review in the two countries, particularly the Buckley and National Citizens’ Coalition decisions.
In “Innovation and Equity: The Impact of Public Funding,” Jane Jenson draws on Western European experience as a basis for her critique of public funding for Canadian federal parties and candidates. In her view, the Canadian system discourages pluralism and access because of the procedures for party registration and the thresholds for access to public funding; rewards fund-raising and spending more than the ability to gain votes; and is unduly focused on “the electoral moment.” She proposes several options intended to foster greater fairness and strengthen political parties as “a crucial bridge between the citizen and the state."
Michael Pinto-Duschinsky’s study, “The Party Foundations and Political Finance in Germany,” describes the origins and activities of the Stiftungen, each of which is legally independent but linked in practice with one of the political parties represented in the Bundestag. As a major element of public funding of the political process, government funding of the foundations currently accounts for some 97 percent of their income. The study indicates that the foundations have been relatively successful in promoting participation and party membership, fostering effective party research and organization, and securing fairness. At the same time, as Dr. Pinto-Duschinsky notes, the role of the foundations within the broader system of German political finance is sometimes criticized.
The Commission owes a considerable debt of gratitude to the researchers who agreed to undertake the studies in this area. Through their dedication and professionalism, their responsiveness to the Commission’s priorities and their cooperation in meeting deadlines, all those whose work appears in these volumes have contributed greatly to the research program. A number of the researchers presented their findings at Commission seminars and/or meetings. We valued their participation on these occasions, as well as their willingness to respond to a range of questions and requests for information, particularly during the period when the Commission’s Final Report was being prepared. I would also like to express my personal gratitude to Peter Aucoin, whose suggestions and counsel helped in so many ways as these research studies were planned, discussed and carried forward for publication.
The Commission’s publication program reflects the central role research played in the work of the Royal Commission on Electoral Reform and Party Financing. It is hoped these studies will illuminate debate on the Commission’s recommendations and, in so doing, help chart the way to a modem and responsive regulatory framework for party and election finance that will bolster electoral democracy in Canada.
F. Leslie Seidle
Senior Research Coordinator
1
THE REGULATION OF ELECTION FINANCE IN THE UNITED STATES AND PROPOSALS FOR REFORM
Herbert E. Alexander
Throughout the past generation, the integrity of the electoral process has been an issue in both the United States and Canada. The result has been simultaneous efforts to regulate the financing of the electoral systems of