Loopholes could allow foreign money into elections, Perrault says

Loopholes in election financing rules could allow money from foreign countries to influence Canadian elections, the chief electoral officer told the inquiry probing foreign interference Tuesday. 

Stéphane Perrault noted that, under the law, only citizens and permanent residents are allowed to donate to a party or candidate and that those donations are supposed to be made from personal funds. Foreign nationals, groups and governments aren't allowed to donate. 

However, Perrault said that can be hard to police and no system is airtight.

Elections Canada audits candidate filings and publishes the names of those who contribute more than $200, he said, and that someone outside Canada would have to use proxies to funnel money to a candidate.

"We do not have information that would allow to vet whether all of these contributors are either Canadian citizens or permanent residents," he said. 

Perrault also suggested that some cash contributions might exceed the limits.

"It's not lawful to make contributions in cash in excess of $20. That doesn't mean it doesn't happen."

Spending by third parties is another area of concern, said Perrault. Under the current rules, a third party can receive money from foreign sources outside an election period, amass it then spend it during an election. 

"When they use this money, they are using their own funds," Perrault said.

"In this way, a certain amount of illegal funding could find its way into third-party expenditures during an election."

He said third parties are increasingly declaring that they have used their own funds to help a candidate or party.

Perrault's comments reflect the findings of a March 2023 summary of foreign interference threats which was tabled with the inquiry on Tuesday.

It says hostile states influence Canadian elections by "clandestinely supporting" individuals thought to be supportive of "foreign state interests" and opposing those who are not. 

"To accomplish their goals, [they] exploit loopholes in political party nomination processes; engage in money and financing operations; mobilize and leverage community organizations; and manipulate media outlets."

Although the list was partly redacted, among the countries the report says engage in foreign interference were China, India, Russia, Pakistan and Iran.

AI and deepfakes

Perrault told the inquiry he is working on a proposal to improve how nomination contests and party leadership races are supervised and that he hopes to table his recommendations with the inquiry and with Parliament in coming weeks.

He said another concern in the leadup to the next federal election is the disruptive potential of artificial intelligence and deepfakes. Perrault said Elections Canada is watching what happens in other elections, such as in the U.S., and is looking at how such efforts can be countered.

Earlier in the day, the inquiry heard from officials in the House of Commons and the Senate who oversee security and cybersecurity for Parliament. 

Sergeant-at-Arms Pat McDonell said some people who have wanted to work on Parliament Hill have failed to pass the security screening because of concerns over foreign interference. 

"I have denied a handful over the past 10 years, two of them being in the last six months," McDonell told the inquiry.

McDonell did not reveal whether the rejected candidates were applicants for jobs with the House of Commons administration or had applied to work as a political staffer to an MP. However, he mentioned one case that involved someone who wanted to work for an MP. 

If the RCMP or CSIS have doubts about a candidate, McDonell said, his staff conducts a separate "resolution of doubt" interview. While the House conducted only 10 such interviews in 2019, in 2023 the number had risen to 128.

McDonell also outlined some of the steps the House of Commons takes to protect MPs, pointing out that threats against members of Parliament have become a daily occurrence. 

However, officials from both the House of Commons and the Senate said parliamentarians aren't always informed of cyberattacks, adding that most are not successful. 

The foreign interference inquiry headed by Justice Marie-Josée Hogue was set up following media reports which accused China of interfering in the 2019 and 2021 federal elections.

In her initial report, made public in May, Hogue found that while it was possible that foreign interference occurred in a small number of ridings, she concluded it did not affect the overall election results.