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Federal Campaign Finance Laws in Canada

Campaign finance refers to the rules that govern the use of money in electoral processes such as general elections, by-elections, and referenda. In this context, Canada has adopted a broad set of rules in relation to key political actors, including election candidates, political parties, electoral district associations, and third parties. This article provides an introduction to federal campaign finance laws, including their history, content, and administration. It also explores a number of key issues regarding the regulation of money in elections.

History of Campaign Finance Laws in Canada

Historical overview of the development of campaign finance in Canada

Overview of Federal Campaign Finance Laws

Summary of Canada’s legislated campaign finance regime

Administration of Federal Campaign Finance Laws

Oversight and enforcement of campaign finance laws in Canada

Issues Concerning Federal Campaign Finance Laws

Philosophical debates, impact on the party system, and the Charter

Sources and Links to More Information

List of article sources and links to more on this topic

History of Campaign Finance Laws in Canada

Historical overview of the development of campaign finance in Canada

Early Federal Campaign Finance Laws

Concerns regarding the role of money in elections are not a modern issue in Canadian politics. Scandals early in Canada’s history focused public attention on campaign finances, while spurring the development of new laws.

In 1873, then Prime Minister Sir John A. Macdonald was accused of demanding large campaign contributions from promoters of the Canadian Pacific Railway — actions that eventually led to the toppling of his Conservative government. The subsequent Liberal government enacted the Dominion Elections Act, which required election candidates to disclose how and where campaign funds were spend. The Act did not, however, apply to political parties (political parties were not recognized in law at the time), nor did it limit the amount of candidates’ expenses or require disclosure of their contributors. Moreover, the Act failed to assign responsibility for administering and enforcing campaign finance rules.

Over the next several decades, the Act was reformed on a number of occasions. In 1891, it was amended to include the provision that assisting a candidate in exchange for money or other valuable considerations would be considered a federal offence. Subsequently, in 1908, corporations were barred from making campaign contributions. In 1920, candidates were required to reveal the names of contributors and the amount of their donations. The continued absence of an overseeing administrative body, however, rendered many of these reforms ineffective (Chief Electoral Officer of Canada, 2007). Businesses, for example, continued to donate campaign funds freely to whomever they wished.

Barbeau Committee and Reform in the 1970s

Between 1920 and 1960, campaign finance laws were left virtually unchanged. In the late 1950s and early 1960s, however, public attention again focused on the issue. Of particular concern was the dawning of the electronic age and the resulting rise in political spending on forms of mass communication, such as television. Political parties began to engage in expensive television advertising. In addition, parties were doing more polling, which was also expensive. Combined with a series of minority governments, and the resulting frequent elections, political parties were facing considerable financial pressures.

In 1964, the federal Liberal government helmed by Prime Minister Lester Pearson created the Advisory Committee to Study the Curtailment of Election Expenses (known as the “Barbeau Committee”) to recommend legislation regarding election expenses.

The Barbeau Committee released its report in 1966. One of the central recommendations it made was to extend legal recognition to political parties. The Committee contended that such reform was necessary to equalize the money available to electoral candidates, and to more fully enable public disclosure of electoral financing. In this context, the Committee went on to recommend spending limits, public subsidies, and public disclosure laws, but did not recommend any limits on the size or source of contributions. Moreover, the Committee concluded that so-called “third parties” should be prohibited from spending money on election advertising (third parties referring to individuals and groups not directly running in an election, such as concerned citizens and interest groups). The Committee made this recommendation on the grounds that it was necessary to protect the campaign finance regime applicable to candidates and political parties.

The Barbeau Committee’s Report was followed by a number of reforms to campaign finance legislation. In 1970, the Canada Elections Act was amended to include a process whereby political parties could register and receive legal recognition. In 1974, the Election Expenses Act was passed, requiring political parties to limit their election spending and report the sources of their contributions. In addition, the new legislation permitted registered political parties to receive public reimbursements for a portion of their election expenses, introduced tax credits for donations to political parties, and required television and radio broadcasters to allocate airtime to political party advertising. The Act also banned so-called “third party” spending on election advertising. This ban, however, was later struck down by the courts.

With regard to administration, the Act established the position of the Commissioner of Election Expenses, who was responsible for overseeing compliance with, and enforcement of, legislated election expenses provisions. In 1977, the position title was changed to the Commissioner of Canada Elections.

1989 Royal Commission on Electoral Reform and Party Financing

The Royal Commission on Electoral Reform and Party Financing (often referred to as the “Lortie Commission” after its chair, Pierre Lortie) was appointed in 1989 by the federal Conservative government, helmed by Prime Minister Brian Mulroney, to undertake a comprehensive study of Canada’s electoral laws. In its reports, the Lortie Commission advocated six objectives of electoral reform:

  • Securing the democratic rights of voters
  • Enhancing access to elected office
  • Promoting the equality and efficacy of the vote
  • Strengthening political parties as primary political organizations
  • Promoting fairness in the electoral process
  • Enhancing public confidence in the integrity of the electoral process

With regard to “promoting fairness,” the Commission concluded that fairness ought to be the central value in the development of electoral laws. Moreover, it also concluded this fairness required realizing equality of opportunity in electoral processes and institutions. In the context of campaign finance, the Commission recommended a wide range of reforms, including extending finance restrictions to party leadership and candidate nomination processes, public funding of political parties, and continued restrictions on election spending by third parties.

Campaign Finance Reform in 2000 and 2003

The 1980s and 90s, saw several small reforms of campaign finance legislation. The next broad set of legislative changes occurred in 2000, when the federal Liberal government, helmed by Prime Minister Jean Chrétien, enacted a new Canada Elections Act. The new Act reflected recommendations made by the Lortie Commission, in addition to addressing a number of judicial decisions rendered in the 1990s relating to the Canadian Charter of Rights and Freedoms.

  • See the Issues Concerning Federal Campaign Finance Laws section of this article for more information on the Charter and campaign finance laws.

With respect to campaign finance, the new Act represented more of a fine-tuning, as opposed to a major departure from the previous law. In this context, the Act instituted more robust financial disclosure requirements for registered political parties, candidates, and third parties. Moreover, while the Act maintained limits on the amount of money third parties could spend on advertising during elections, it significantly increased the ceiling.

For more information on the 2000 Canada Elections Act:

In 2003, the Chrétien government passed An Act to Amend the Canada Elections Act and the Income Tax Act. This Act amended the Canada Elections Act to include stronger financial disclosure and registration requirements for political entities, introduced new limits on political contributions, and tighter restrictions on contributions from labour unions and corporations to political parties and leadership contestants. The Act further implemented new public financing provisions, allowing political parties to access public funding to support their activities. The Act also amended the Income Tax Act, increasing the maximum tax credit for a political contribution.

  • See the Federal Campaign Finance Laws section of this article for an in-depth overview of contemporary campaign finance legislation.

Recent Reforms of Campaign Finance Laws

In 2006, the new Conservative government of Prime Minister Stephen Harper passed the Federal Accountability Act, instituting a number of significant reforms regarding the operation of government and the conduct of political officials. In regard to campaign finance, the Act set out new rules for political donations, a ban on candidates accepting gifts that might be seen as influencing them, and a ban on transferring trust-fund money to candidates or political parties.

For more information on the Federal Accountability Act:

In its 2008 mini-budget, of November 2008, the Harper government further proposed to significantly cut public funding to political parties under the Canada Elections Act. The government publicly justified its action on the basis that it would save taxpayers approximately $30 million annually. Opposition parties took issue with the mini-budget on a number of grounds, primarily the proposed cuts in public funding for political parties, and threatened to vote against the mini-budget and defeat the minority Conservative government. As a result, the Conservative government dropped the proposed cut that had proved so controversial. .

Overview of Federal Campaign Finance Laws

Summary of Canada’s legislated campaign finance regime

Expense Limits for Election Participants

Restrictions regarding the spending of money by election participants, such as candidates and political parties, constitute a key element of Canada’s campaign finance rules. In this context, Canada differs significantly from other jurisdictions, such as the United States. Whereas the US approach to campaign finance focuses on limiting the amount of money individuals and groups can contribute to candidates and political parties, historically, the Canadian approach has been to limit the amount these political entities can spend.

  • See the History of Campaign Finance in Canada section of this article for more information on Canada’s historical approach to campaign finance.

In this context, Canadian law places election spending limits on political parties, election candidates, and nomination candidates. These limits are based on such factors as the number of electors and the population density of constituencies in which they are running. For example, limits on election spending by political parties are determined by multiplying $0.70 (adjusted for inflation) by the number of names on the registered list of electors for constituencies in which the party has endorsed a candidate (Canada Elections Act, Section 422). The table below provides total election expense limits for all registered political parties in the 2008 federal election.

2008 Federal Election: Expense Limits by Party

Animal Alliance Environment Voters Party of Canada

$272,020.62

Bloc Québécois

$5,066,811.35

Canadian Action Party

$1,312,843.11

Christian Heritage Party of Canada

$3,789,711.98

Communist Party of Canada

$1,599,036.86

Conservative Party of Canada

$19,999,230.62

First Peoples National Party of Canada

$291,658.89

Green Party of Canada

$19,751,412.68

Liberal Party of Canada

$20,014,302.76

Libertarian Party of Canada

$1,880,168.34

Marijuana Party

$537,560.73

Marxist-Leninist Party of Canada

$4,109,588.81

neorhino.ca

$481,352.40

New Democratic Party

$20,063,430.10

Newfoundland and Labrador First Party

$169,243.46

People’s Political Power Party of Canada

$91,748.49

Progressive Canadian Party

$706,935.92

Western Block Party

$76,810.64

Work Less Party

$64,845.31

(Source: Heard, 2009)

In regard to other electoral actors, individuals seeking a party’s nomination to run as a candidate in an electoral district are limited to spending 20 percent of the expense limit in that district. Leadership candidates, however, are permitted unlimited expenses when vying for the leadership of a political party, though they are required to register with Elections Canada and must submit to a number of disclosure requirements.

Contribution Limits to Election Participants

While the historic approach has been to limit spending by participants in a federal election, reforms under the 2003 amendments to the Canada Elections Act and the 2006 Federal Accountability Act have sought to bring greater regulation to private contributions. Key rules regarding contributions are as follows:

  • Only Canadian citizens and permanent residents may make contributions to registered parties, registered electoral district associations, leadership and nomination contestants of registered parties, and all candidates.
  • Individual contributions to these political participants are limited to a maximum of $1,000 annually (adjusted for inflation).
  • Individuals may also make contributions that do not exceed $1,000 (adjusted for inflation) in total per contest to the leadership contestants of a registered political party. This is an aggregate cap applying to all the contributions given by one individual to all leadership contestants in the same leadership contest.
  • Corporations, trade unions, and other unincorporated associations are prohibited from making contributions to registered parties, registered electoral district associations, leadership and nomination contestants of registered parties, and all candidates.

Public Disclosure for Election Participants

Federal campaign finance laws also impose disclosure and reporting requirements on election participants. Election candidates must submit an audited electoral campaign return to the Chief Electoral Officer within four months of election day. In the return, the candidates must show all electoral campaign expenses incurred; the amounts of all contributions; and the names, addresses and dates the contributions were provided for all contributions exceeding $200.

Within six months of election day, registered political parties are also required to submit an audited return of their election expenses to the Chief Electoral Officer (this is in addition to annual fiscal returns and by-election expense returns). In these various reports, registered political parties must submit the amount and sources from all contributions; the names and addresses of those whose aggregate contributions exceeded $200; and the dates upon which the contributions were provided.

Summaries of these election campaign returns for election candidates and registered political parties are then published by the Chief Electoral Officer. Copies of election candidate returns are kept by Elections Canada and available to the public.

Disclosure and reporting requirements are not limited to just election candidates and registered political parties. Contestants for the leadership of a registered political party must also publicly disclose the names and addresses of each person who contributed a total amount of more than $200 to their leadership campaign, the total amount from each of these contributors, and the date on which the contestant received the contribution. Registered electoral district associations must also provide regular financial reports to the Chief Electoral Officer in which they must disclose such information as the names and addresses of all contributors of more than $200 and statements of assets and liabilities and revenues and expenses. Furthermore, contestants for a registered political party’s nomination in an electoral district must report contributions and expenses to Elections Canada if they exceed $1,000.

Public Funding of Election Participants

Federal campaign finance laws also provide for public financial support of election candidates and political parties. This support comes in two different forms: 1) tax credits for private contributions, and 2) direct financial transfers to election participants.

The oldest source of public financial support comes in the form of tax credits for private contributions. Under the federal Income Tax Act, individuals are permitted to claim a portion of their contributions to political parties and election candidates as a credit on their annual income taxes. This tax credit is large, with the purpose of encouraging individuals to contribute to election participants.

Under amendments to the Canada Elections Act in 2003, election candidates and political parties are also entitled to direct public subsidies. Political parties are entitled to a reimbursement of 50 percent of election expenses, while individual candidates may receive 60 percent of their election expenses (up to the maximum expenses allowable). It is important to note, however, that political parties and candidates must meet certain performance criteria in order to obtain these reimbursements. With respect to political parties, candidates endorsed by the party must receive at least 2 percent of valid votes cast in an election or 5 percent of valid votes cast in constituencies in which the party endorsed a candidate. Individual candidates must receive at least 10 percent of votes in their electoral district.

Registered political parties are also entitled to an annual allowance of $1.75 for every vote received by the party in the previous election, provided the performance criteria outlined above are met. This allowance is provided quarterly and adjusted for inflation.

Since the 2003 changes to the Canada Elections Act, state subsidies have become an important source of revenue for political parties. The precise significance, however, differs widely from one political party to another. In 2007, for example, 86 percent of the Bloc Québécois’ revenues stemmed from public monies, while subsidies only represented 37 percent of revenues for the Conservative Party of Canada.

Public Support as Portion of Total Funding by Political Party (2007)

Bloc Québécois

86%

Green Party of Canada

65%

Liberal Party of Canada

63%

New Democratic Party of Canada

57%

Conservative Party of Canada

37%

(Source: CTV.ca, 2008)

It’s important to note that public financial support specifically targets political parties and election candidates. Other election participants, as well as third parties (see below), are not eligible for public funding.

Regulation of Third Party Election Advertising

In addition to regulating the finances of electoral participants (such as candidates, political parties, and electoral district associations), federal campaign finance laws also deal with so-called “third parties.” This includes any individual or group not directly contesting an election, such as concerned citizens and interest groups.

With regard to election expenses, the Canada Elections Act restricts third parties to spending a total of $150,000, and no more than $3,000 per electoral district on election advertising (adjusted for inflation). The term “election advertising” refers to forms of communication in which a third party promotes or opposes the election of one or more candidates in a given electoral district. There are, however, a number of qualifications to these limits on third parties. The restrictions apply only during election periods. Outside election periods, third parties are free to engage in unlimited spending on political advertising. The law, moreover, does not extend to a number of forms of communication, such as the publishing of a book, interviews, privately distributed memos, or the reporting of news.

Unlike electoral participants, there are no restrictions on who may contribute to a third party in support of its election advertising, or how much may be donated. Nevertheless, the Canada Elections Act does require third parties to disclose all contributions received for election advertising purposes during an election. Third parties must report the number of contributors and the total amount for each class of donor (such as total amounts by individuals, businesses, governments, and trade unions). For contributors donating more than $200, a third party is required to disclose the name, address, and class of the contributor, as well as the amount and date of the contributions.

Administration of Federal Campaign Finance Laws

Oversight and enforcement of campaign finance laws in Canada

Elections Canada and Key Electoral Officers

Elections Canada is the primary agency for the administration of federal campaign finance laws. In general terms, Elections Canada is responsible for preparing for, and overseeing, the conduct of federal electoral events, such as general elections, by-elections, and referenda. In this capacity, Elections Canada is organized as an independent agency within the federal government which operates at arm’s length from the prime minister and cabinet, reporting directly to Parliament.

With regard to campaign finance laws, Elections Canada is responsible for registering electoral participants, such as candidates, political parties, electoral district associations, and third parties, as well as administering federal legislation pertaining to their conduct during elections. This includes overseeing such matters as the disclosure and reporting of financial activities; restrictions on contributions; limits on election spending; and public reimbursements and allowances for candidates and political parties.

Additionally, Elections Canada is responsible for providing regular reports to Parliament regarding the federal electoral system’s operation. In these reports, Elections Canada provides information on the conduct of elections and assessments of whether they operated in a manner consistent with federal laws (such as those dealing with campaign finance), in addition to offering recommendations for reform. It is important to note that Elections Canada does not have the authority to implement reforms, only to provide recommendations to Parliament and the government of the day.

The head of Elections Canada is the Chief Electoral Officer of Canada (CEO), who is responsible for overseeing the day-to-day operations of the agency, and its long-term planning. The CEO is assisted by the Deputy Chief Electoral Officer, as well as several internal and external committees. With respect to the latter, the CEO works with the Advisory Committee of Registered Political Parties, which is comprised of representatives of Elections Canada and registered federal parties. This external committee discusses administrative issues related to the operation of elections, including campaign finance laws.

While Elections Canada and the Chief Electoral Officer are responsible for many administrative aspects pertaining to federal campaign finance, responsibility for enforcing these rules falls to the Commissioner of Canada Elections (CCE). This is an independent elections officer, first created in 1974, who is appointed by the Chief Electoral Officer. The CCE is mandated to ensure the provisions of the Canada Elections Act and the Referendum Act are complied with and enforced. Alleged violations of campaign finance laws are to be submitted to the CCE. If the CCE finds sufficient grounds for the allegation, he/she has the authority to order an investigation of the matter and to apply to the courts for remedies.

Dealing with Violations of Campaign Finance Laws

Alleged violations of campaign finance laws may be dealt with in two manners. On the one hand, the Commissioner of Canada Elections has the authority to negotiate compliance agreements with any person he/she believes has violated the law. These are voluntary agreements in which the alleged offender agrees to terms and conditions necessary to ensure compliance with federal law.

In the alternative, the CCE may decide that legal prosecution is the more suitable approach. In these situations the CCE will refer the matter to the Director of Public Prosecutions, who makes the final decision of whether to initiate a prosecution. No prosecution of an offence may be initiated by a person other than the Director. Moreover, prosecutions must be initiated within five years after the day in which the CCE became aware of the facts, and not later than 10 years after the day on which the offence was committed.

The Canada Elections Act lists the offence provisions regarding violations of campaign finance rules, as well as the legal thresholds that must be met to successfully prosecute them.

Penalties for Violation of Campaign Finance Laws

If an individual is convicted by a court for violating federal campaign finance laws, he/she may receive a fine or a period of imprisonment (depending on the offence). The Canada Elections Act also permits the courts to impose additional penalties, such as:

  • performing community service
  • performing the obligation that gave rise to the offence
  • compensating for damages
  • a fine of up to five times the election advertising expense limit exceeded by a third party
  • with respect to certain offences, the deregistration of a political party, the liquidation of its assets, and the liquidation of the assets of the party’s registered associations

Issues Concerning Federal Campaign Finance Laws

Philosophical debates, impact on the party system, and the Charter

Legitimacy of Regulating Money in Elections

An important debate centres on the need or legitimacy of regulating money in elections. In this context, perspectives may be divided into two sorts of camps: those that hold that the state should restrict campaign finances as minimally as possible, and those who contend that the state should place tight regulations on money in elections.

The former perspective is often referred to as the “laissez-faire” view of elections. Central to this view is the idea that citizens should be left as free as possible from state interference in their electoral activities. From a campaign finance perspective, citizens should be free to contribute as much money as they like to election participants, and to spend unlimited amounts where they wish (such as on election advertising). Moreover, this view holds that candidates and political parties should be free to spend unlimited amounts on their own electoral activities.

This laissez-faire view is often justified on a number of different grounds. Some, for example, argue the government cannot be trusted with the power to regulate citizens’ electoral conduct based on the fear that politicians will use this power to manipulate the electoral system for their own gains. Another view, associated with free market ideology, holds that optimum political outcomes and decisions occur when citizens are left in a state of liberty to compete in elections. Just as free markets bring equilibrium to supply and demand in the economic realm, free competition in the political sphere ensures optimum political outcomes. Yet another view, stemming from radical libertarian thought, holds that citizens have a moral right to choose their political conduct for themselves, free from state interference.

It’s important to note that this laissez-faire approach does not necessarily entail the complete absence of campaign finance rules. Instead, it simply seeks to minimize state interference and maximize individual choice as much as possible. A free market approach, for example, would reject the ideas of limits on spending and the use of public subsidies. According to this view, the free market, not the state, should decide how financial resources are distributed in elections. Nevertheless, a free market advocate may support certain financial rules, such as the requirement that candidates and political parties publicly disclose their contributors. The argument in favour of this notion is that this information is highly relevant for voters who wish to make an informed choice as “consumers” in the political market.

Advocates of stricter campaign finance laws usually stress the importance of such laws in ensuring fair or equitable electoral participation or outcomes. Central here is the recognition that money plays a critical role in modern democracies. Candidates and political parties, for example, need to hire staff and purchase equipment, as well as spend considerable funds on disseminating their political messages to the electorate through such mediums such as television, radio, print and the Internet. The decision to participate in an election and the quality of a candidate’s campaign, it is argued, is often directly correlated to a campaign’s financial resources.

With this in mind, one may argue for campaign finance rules in order to prevent specific public harms, such as political corruption and bribery. The issue here is that a candidate or political party may sell favours to private individuals in return for needed financial support for their campaign. To prevent such corruption from happening, there must be regulations on who can contribute to a candidate or political party, and how much money they may donate.

Another perspective holds that campaign finance is necessary to ensure a level playing field for candidates and political parties. Central here is the concern that wealthy segments of society may be able to perpetually dominate the democratic process simply because they are able to outspend their competitors during election campaigns. To prevent this sort of harm, the electoral system must be structured so that it is an open and fair competition in which money is not the deciding factor of success. This, in turn, may require limits on the revenues and expenses of election participants, as well as access to public funding to ensure that all have a fair opportunity to compete for public office.

Yet another perspective, often associated with radical egalitarians, holds that citizens should, as much as possible, have equal influence on political decision-making. The concern here is not simply preventing the harms associated with political corruption and/or domination by the wealthy, but ensuring that all citizens have their views equally heard and considered in political institutions. In this context, campaign finance is an important mechanism for ensuring equal political influence for all. Spending limits, for example, place a ceiling on the political influence of wealthy citizens, candidates, and political parties. Access to public resources, moreover, helps to ensure that economically disadvantaged individuals and groups are able to have their views and interests heard and taken into account.

Impact of Campaign Finance Laws on the Party System

Another significant issue regarding Canadian campaign finance laws has been their impact on the federal party system. This has become a particularly important issue since the 2003 amendments to the Canada Elections Act, and the introduction of tighter regulations on contributions and the provision of public financing for election candidates and political parties. A 2008 study by Harold Jansen and Lisa Young, entitled The Impact of Changing Finance Laws on Canadian Political Party Competition, suggests the new finance campaign laws have resulted in significant changes to political party revenues, as well as have had a positive impact on election competition.

With respect to revenues, the new campaign finance regime has been challenging for some political parties, while highly beneficial for others. The Liberal and New Democratic parties, for example, were traditionally dependent on corporate and labour contributions respectively. With the tighter restrictions on, and eventual ban of, these sources of revenue, both parties have lost significant portions of their customary income. Moreover, neither has been able to make up the shortfall through increases in individual contributions. As a result, the Liberals and NDP have become increasingly dependent on public financial support in funding their operations and election activities.

The Conservative Party and its predecessor, the Canadian Alliance Party, have benefited greatly from the campaign finance regime. Unlike the Liberals and NDP, the Conservatives have traditionally enjoyed a large individual contributions base, which has not been restricted by campaign finance laws. The Conservatives have been so successful at collecting individual contributions, that public financial support represents a relatively small portion of their overall revenues. Jansen and Young note that the only barrier to the Conservatives exploiting this financial advantage has been the legislated spending limits on political parties.

Both the Bloc Québécois and the Green Party of Canada have also benefited greatly from the new campaign finance rules. The BQ typically has lower election costs than the other political parties due to the fact that it runs candidates only in Quebec. Moreover, the BQ had very little income from corporate or labour sources prior to the restrictions. The party is able to cover most of its operation and election costs through the system of public subsidies and, as such, has little need to engage in fundraising. The Green Party was successful in meeting the performance thresholds for receiving public subsidies in the 2004 election. With this public money, it has been able to expand and professionalize its operations, and raise its national profile.

Overall, Jansen and Young’s study suggests greater competitiveness between political parties in elections. In sum, there has been a closing of the gap between political parties in terms of what they spend on election activities. The Liberal and Conservative parties have continued to spend at or close to the election spending limits. Under the new regime, the BQ has also been able to spend near its limits. While the spending of the NDP and Green parties has been significantly lower, their spending has nevertheless increased over time, significantly closing the gap with other political parties.

Campaign Finance Laws and the Charter

Another important issue has been the impact of the Canadian Charter of Rights and Freedoms on federal campaign finance laws. As discussed above, reforms in 2000 and 2003 were instituted in part to address several judicial decisions regarding federal campaign finance laws and the Canadian Charter of Rights and Freedoms. Two issues in particular were the focus of these judicial decisions: 1) requirements for maintaining registered political party status and 2) limits on third party spending on election advertising.

With respect to the first of these issues, the Canada Elections Act had previously stipulated that a political party must nominate at least 50 candidates in an election to maintain its status as a registered political party. A political party that became deregistered as a consequence of failing to meet this nomination requirement would no longer enjoy the financial benefits associated with registered status, such as issuing tax credits to contributors and retaining unspent election funds. Moreover, as a consequence of deregistration, a party was forced to liquidate its assets, pay all its debts, and remit the outstanding balance to the Chief Electoral Officer.

In 2002, the Supreme Court of Canada heard the case of Figueroa v. Canada (Attorney General), rendering its decision in 2003. In that case, Miguel Figueroa, leader of the Communist Party of Canada, challenged the nomination threshold on the grounds that it violated the Charter right to vote. The Supreme Court of Canada agreed and declared the provisions of the Canada Elections Act unconstitutional. In its decision, the Court ruled that withholding the right to issue tax receipts and retain unspent election funds from candidates of parties that have not met the nomination threshold undermines the right of citizens to meaningful participation in the electoral process. In response, the federal government dropped the 50-candidate nomination requirement when it introduced its 2003 amendments to the Canada Elections Act and Income Tax Act. In its place, the amendment simply required political parties to regularly show that they have at least 250 members in order to maintain registered status.

Another key issue regarding campaign finance laws and the Charter has been advertising spending limits on third parties (any individual or group other than a candidate or registered political party). Limits on third parties were first imposed under the 1974 Election Expenses Act (see above), when the federal government prohibited any advertising expenditures by third parties except where intended to gain support for a policy stance to promote the objectives of a non-partisan group. In 1983, the government changed the legislation to prohibit all third party election spending directed at supporting or opposing a candidate or political party, unless officially authorized.

In 1984, the Alberta Court of Queen’s Bench, in the case of the National Citizens’ Coalition Inc. v. Canada (Attorney General), struck down the limits on third parties on the grounds it was an unconstitutional infringement of the Charter right to freedom of expression. In response, the federal government introduced new restrictions in 1993 which allowed third parties to incur expenses up to a total of $1,000 during an election. These new limits were also struck down by the Alberta Court of Appeal in its 1996 decision in Somerville v. Canada (Attorney General). In 1997, however, the Supreme Court of Canada provided a new legal interpretation of third-party spending restrictions in its decision in Libman v. Attorney General (Quebec). This case dealt not with federal campaign finance laws, but spending restrictions imposed by the Government of Quebec for provincial referendums. In its decision, the Supreme Court concluded that governments could constitutionally limit third-party spending as a means of promoting equality of participation, as long as the restrictions were not so stringent so as to effectively exclude third parties from the political discourse.

In response to these decisions, the federal government introduced new restrictions on third-party election spending under the 2000 Canada Elections Act (see above). Under the new law, third parties were permitted to spend up to a total of $150,000 nationally on election advertising, but no more than $3,000 in any given electoral district (adjusted for inflation). These restrictions were again challenged under the Charter, with the Supreme Court hearing arguments in the 2004 case of Harper v. Canada (Attorney General). In that case, a majority of the Court concluded the new spending thresholds imposed by the federal government were constitutional under the Charter. All provisions of the third- party legislation were therefore upheld.

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