Tory senator wants to close 'troubling' election loophole on foreign funds

Conservative Senator Linda Frum is determined to stop the flow of foreign money into Canada for fear the funding of third party groups is unfairly influencing federal election campaigns, and leaving the country vulnerable to election rigging.

With the federal government expected to table legislation on party fundraisers today, the Ontario senator is pressing ahead with a private member's bill of her own that will make it an offence under the Canada Elections Act for a third party to accept foreign contributions for any election-related activity at any time.

"This bill aims to close the door on allowing foreign financing of elections in Canada, which, to an astonishing degree, is currently a legal activity," Frum said in an interview with CBC News. Under the legislation, a fine equal to the foreign contribution would be levied on the receiving party.

There is absolutely no way to know how much money was spent- Senator Linda Frum

Two Canadian groups in particular, Dogwood Initiative, an environmental advocacy group, and Leadnow, a group that promoted strategic voting in the last campaign to oust vulnerable Tories, have been in the cross hairs of Conservatives in large part because they were partially funded by American groups. These groups sought to stop former prime minister Stephen Harper's re-election, citing his record on environmental issues.

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'Will they care when it's Putin?'

But Frum said this bill is not simply about the anti-pipeline groups that jumped into the last election to target Harper, adding it is not "paranoia" to suggest the current loophole could be exploited by foreign governments, like Russia, to try and sway the outcome of the election — as they are alleged to have done in the U.S. presidential campaign.

While some Canadians might be supportive of foreigners that advance green causes here at home, "will they they care when it's [Russian President Vladimir] Putin?

"This is not abstract, this a real and very serious threat to our democratic sovereignty. There was foreign influence in the last election, and there's no doubt about that, and there will be more in the future," Frum said.

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As it stands, the law only prohibits third parties from accepting non-Canadian funds if those contributions are earmarked for election advertising. If the money is collected by those Canadian-based groups more than six months before an election it is not subject to regulations, and it "gets mingled with Canadian funds," something that has created a deep sense of unease among some partisans and officials alike.

Others have said the relatively "meagre" participation of these groups is simply the sign of a healthy democracy.

'Absolutely no way to know how much money was spent'

According to records filed after the last election, roughly $6 million was spent by 114 registered third parties during the campaign — a number that pales in comparison to the tens of millions of dollars that were spent by the political parties. There are also limits on just how much a third party can spend to publicly advance an agenda, as they face a relatively paltry $150,000 spending cap (they can also spend $4,000 to support an individual candidate in a riding).

But Frum said those figures refer to spending on advertising alone, and all other election-related expenses are unknown.

"There is absolutely no way to know how much money was spent by the 114 parties. Some of these third parties were very sophisticated, they understood these loopholes extremely well and exploited them to their great advantage," she said.

"How do you know it wasn't very much money, we don't known unless Elections Canada subpoenas their banking records, and I don't count on that," she said.

Frum said the current "restrictive, and old-fashioned" law — drafted some 17 years ago — is woefully out of date as it does not consider promotional websites as a form of advertising, for example.

'Significant number of complaints'

Yves Côté, Canada's chief elections investigator, agreed during a recent appearance before the Senate's legal and constitutional affairs committee, that there is nothing to stop foreign-funded third parties from setting up election websites, conducting research, recruiting volunteers or paying for opinion polls.

Third-party spending ahead of the writ period simply doesn't have to be registered or fall within campaign limits.

"We have received a significant number of complaints about the involvement of third parties in connection with the 2015 general election. Common to many of these complaints was the perception that third parties, in some ridings, were so significantly involved in the electoral contest that this resulted in unfair electoral outcomes," Côté said, predicting a further proliferation of third party groups during the next campaign.

"For that reason, it may be time for Parliament to re-examine the third-party regime that was put in place 17 years ago with a view to ensuring a level playing field is maintained for all participants."

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An official for Democratic Reform Minister Karina Gould told CBC News on Tuesday they were aware of Frum's bill, but the minister had not yet reviewed the specifics of the legislation.

Gould's mandate letter from the prime minister does include a commitment to review spending limits of third parties and political parties during and between elections.

Last week, former Calgary Conservative MP Joan Crockatt filed a 36-page complaint with Côté, alleging that she was one of the victims of foreign interference, blaming a U.S. group called the Tides Foundation and its support of Leadnow for her loss to Veterans Affairs Minister Kent Hehr. Crockatt has compiled a report on Leadnow's alleged influence, but has not yet shared it publicly.