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Bill S-239: The Eliminating Foreign Funding in Elections Act - Second Reading

Honourable senators, it is a fundamental tenet of Canadian democracy that Canada's electoral process belongs to the Canadian people and only to the Canadian people. Nothing is more central to preserving the integrity and legitimacy of Canadian elections than ensuring that no outside influence is involved — especially when not disclosed.

A nation that permits foreign meddling in its politics cannot claim to be truly sovereign. Clandestine foreign meddling is the most dangerous of all, because it subverts sovereignty in a way that denies citizens even the knowledge of what is being done, which is why I introduced Bill S-239, the eliminating foreign funding in elections act.

I suspect that if you asked most Canadians, including those of us in this chamber, whether or not foreign interference is legal in Canadian elections, the answer would be: obviously not. And yet, alarmingly, that answer is wrong.

Foreign entities and interest groups not only can, but they have poured millions of dollars into Canada for the purpose of attempting to influence the outcome of our elections. Foreign contributors are able to impose their foreign agendas on Canadian elections because of lax rules surrounding third-party election activity in Canada, and also, frankly, because of what appears to be indifference on the part of Elections Canada.

Honourable senators, with Bill S-239, I am proposing that the loopholes in the Canada Elections Act that have allowed foreign interests to pour unlimited funding into Canada be closed, and closed definitively.

Now, it is true that if you look at section 331 of the Canada Elections Act, it appears as though a ban on foreign influence in Canadian elections has already been safely codified by Parliament.

Section 331 reads:

No person who does not reside in Canada shall, during an election period, in any way induce electors to vote or refrain from voting or vote or refrain from voting for a particular candidate unless the person is

(a) a Canadian citizen; or

(b) a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act.

That seems clear enough — except for a canyon-sized loophole found in section 358. Section 358 of the Canada Elections Act declares that no third party shall use a contribution from a foreign source for election advertising purposes.

Honourable senators, as is so often the case, the loophole is created not by what the act says but by what the act does not say. By prohibiting the foreign funding of third-party election advertising — and only election advertising — all other third-party election-related activity is left unguarded from foreign influence.

That is not my opinion. That is the way the act is interpreted by the Commissioner of Elections Canada, Yves Côté, who, in his 2014-15 annual report, stated that third parties:

. . . can use foreign contributions to fund activities that do not include the transmission of election advertising messages. This includes carrying out election surveys, setting up election-related websites and using calling services to communicate with electors.

To make matters worse, Elections Canada's interpretation of what does and does not qualify as the "transmission of an election advertising message" may surprise you in its 19th century scope.

Take, for example, the costs associated with creating content for a professionally designed website that explicitly endorses a political candidate and/or a political party. Is that an advertising cost? According to Elections Canada, it is not.

How about robocalls, or phone banks operated by paid employees for the purposes of inducing voters to vote one way or another? Are the costs of promoting a message via robocalls or paid phone banks considered advertising costs? According to Elections Canada, no, they are not.

What about the costs of conducting polling to create content to put in promotional flyers? Is this considered an advertising cost? According to Elections Canada, no, it is not.

What about the costs associated with producing and promoting a cross-country concert tour with remunerated, internationally recognized talent; staffing those concerts with paid staff; and using those concerts, which have been promoted via social media, to transmit a political message or endorse a political candidate or party? Is that advertising? According to Elections Canada, no, it is not.

I could continue with more examples, but I think you get the point. Virtually nothing, short of a full-page print ad in The Globe and Mail, is considered by Elections Canada to be an advertising cost.

All of those activities that I mentioned above fall outside the prohibition contained in clause 358, which restricts only the foreign funding of election advertising or, more precisely, that which Elections Canada deems to be advertising. Therefore, all of the activities that I mentioned above can be funded, in part or in whole, by foreign entities and in the 2015 election, they were.

How do I know that? Well, this part gets tricky. For compliance purposes, Elections Canada requires third parties to produce a report on all "contributions made for the purposes of advertising" within four months after an election. But this report need only include contributions received by that third party six months prior to an election. If a contribution of money from a foreign source is received greater than six months before an election, it is considered Canadian money. I know that sounds nonsensical, so I will repeat it: If a foreign contributor donates money to a third party more than six months before an election, that money is not considered foreign money.

As former Chief Electoral Officer of Elections Canada, Marc Mayrand, testified during his appearance at the Standing Senate Committee on Legal and Constitutional Affairs testimony in November:

Once the [foreign] funds are mingled with the organization in Canada, it's the Canadian organization's funds. That's how the act is structured right now. And they can use those funds, between or during elections.

In other words, this means that there's no way to know for sure how much foreign money was spent in Election 2015.

However, we do know this much: Almost $700,000 in contributions from the American foundation Tides was donated to eight Canadian registered third parties in the 2015 election year; Dogwood, one of those registered third parties, received nearly $1.1 million from Tides between 2011 and 2015; and LeadNow, one of the most active third parties in the last election itself, claims that 17 per cent of its funding came from foreign sources.

Were any of these funds spent on election advertising in either their 19th or 21st century forms?, We can only make a logical guess. There's absolutely no way to know for certain because Elections Canada does not independently audit third parties unless a private citizen makes an evidence-based complaint — based on banking records no private citizen can ever have access to.

Honourable senators, what is absolutely certain is that Canada's foreign funding prohibitions are entirely inadequate. And if they continue to be left unchecked, foreign influence in our politics will only grow. The political parties which benefited from foreign funding in the past election may not be the same ones to benefit in the future. Today it may be private actors that are funding these interventions. Tomorrow it could be state actors, including hostile state actors. We've already seen democratic processes corrupted in other countries by clandestine foreign interests. We must ensure this does not happen in Canada.

With the introduction of Bill S-239, I'm hoping to close the door firmly on allowable foreign influence in Canada. It is time for Canadians to take back control of our electoral system.

It's gratifying to know that the testimony heard by the Standing Senate Committee on Legal and Constitutional Affairs has hit a chord with Canadians who are calling for an end to foreign financing.

Jean-Pierre Kingsley, who served as Canada's Chief Electoral Officer from 1990 until 2007, said to the media last week:

We simply cannot allow any kind of money that is not Canadian to find its way into the Canadian electoral system.

He went on to say:

A general election is a national event, it's not an international event and foreign interests have no place and for them to have found a back door like this, that is not acceptable to Canadians. I think the overwhelming majority of Canadians care about foreign money playing a role in our elections, regardless of what party they favour. This issue is about the overall fairness in our elections, about keeping a level playing field.

The following day, The Globe and Mail published an editorial calling for limiting or banning foreign donations to groups that want to be registered as third parties during elections. "Close the loophole for foreign money in Canadian elections," they wrote.

Honourable senators, the remedy to the foreign funding loophole is now tabled in this measure. My bill, Bill S-239, will amend section 331 of the Canada Elections Act to provide clarity that foreigners may not contribute to election-related activities at any time. It defines the list of foreign entities that are not permitted to contribute to Canadian third parties. It clarifies that foreign entities are not permitted to provide loans to third parties.

Finally, Bill S-239 will add a sanctioning clause to the Canada Elections Act to hold third parties to account. Any breach of the act will be liable to a fine equal to the amount of the illegal contribution received.

Honourable senators, I hope you will agree that nothing less than the legitimacy of the outcome of our elections is at stake. It is imperative that we put a stop to the foreign financing of election activity in Canada.

Bill S-239 is not a partisan bill. It is a patriotic bill. Let our chamber be united on this issue in the name of Canadian sovereignty and in the service of the democracy we all have the honour and duty to protect.

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