British Columbia Overhauling Political Campaign Financing

Written By Sharon Singh, Milos Barutciski David Bursey and Harnimrit Sian

On September 18, 2017, the NDP Government introduced Bill 3-2017 Election Amendment Act, 2017, aiming to reform British Columbia's maligned image as the Wild West of political donations.

Unlike other Canadian jurisdictions, British Columbia does not limit the amount individuals or organisations can donate to political parties. The absence of a limit attracts criticism about the potential influence of large donors (e.g. corporations, unions, and wealthy individuals) on political parties.

What does the Bill do?

The reforms contemplated by the Bill are sweeping and will alter the way political parties in British Columbia do business and the way organisations and other stakeholders engage with political actors in and out of government.

The Bill's highlights include:

1. Limits on who can donate and how much.
   1. Only Eligible Individuals (BC residents who are Canadian citizens or permanent residents) may donate. Thus, corporate and union donations are ineligible.
   2. For 2018, an Eligible Individual may donate up to $1,200 annually to:
      1. Any one political party, its candidates, nomination contestants and registered constituency associations (combined);
      2. An independent candidate and the constituency association that supports an independent candidate (combined);
      3. An independent candidate not supported by a constituency association; and
      4. A leadership contestant seeking leadership of a party.
   3. The amount will be adjusted for subsequent years based on the consumer price index.
      
      
2. Regulation of third-party advertisers and contributions.
   1. An Eligible Individual can donate up to $1,200 for contribution to election advertising (pre-campaign and campaign advertising).
   2. Third party sponsor (anyone other than a candidate, registered political party or registered constituency association that sponsors election advertising, such as special interest groups, unions, and corporations of election advertising) must obtain a contributor's confirmation and consent to use any part of the contribution to sponsor election advertising.
   3. The definition of contributions to third parties is expanded to include in-kind donations.
   4. Third parties receiving more than $10,000 in sponsorship contributions, or sponsoring election advertising valued at over $10,000 are subject to financial and reporting requirements.
      
      
3. Restrictions on political contributions through fundraising functions.
   1. Specified fundraising functions with a ticket price of greater than $100 in or on premises used as a private residence are prohibited.
   2. A specified fundraising function :
      1. is attended by an Executive Council member, parliamentary secretary, a leader of a major political party (i.e. a party with an elected member of the legislative assembly or ran candidates in at least half of B.C.'s electoral districts); and
      2. is held to raise funds for a major political party, its candidate, its leadership contestant or its constituency association.
   3. Those holding the specified fundraising functions must give at least 7 days advance notice to the Chief Electoral Officer and submit a report at least 60 days after the function.
      
      
4. Lower election expenses limit.
   1. The total value of election expenses incurred by a registered political party during the general election campaign period must not exceed the $1.16 multiplied by the total number of registered voters on the lists of voters for each electoral district prepared for registered political parties and for candidates.
      
      
5. Support for political parties through a taxpayer funded annual allowance.
   1. The allowance diminishes over time and assists political parties with any revenue lost due to the proposed changes.
      
      
6. Monetary penalties for contraventions.
   1. The chief electoral officer may penalise individuals, political parties, candidates, leadership contestants and registered constituency associations for contraventions of the Bill.

When does the Bill come into effect?

Different parts of the Bill will come into force in a phased manner. Most provisions will come into effect when Royal Assent is received, some provisions will come into effect on the day after the Bill receives First Reading in the Legislative Assembly, and other provisions on a fixed date and yet others by regulation of the Lieutenant Governor in Council (i.e., by provincial Cabinet Order). For example:

• Sections 6 and 63 relating to specified fundraising functions came into force on the day after the date the Bill received First Reading in the Legislative Assembly (which was September 19, 2017).
• Section 45 which establishes reporting requirements for specified third party sponsors comes into effect by regulation of the Lieutenant Governor in Council.

The Bill also has transitional provisions, including restricting the use of contributions received before the Bill comes into force and contributions that are not in accordance with the new Bill to non-election expenses.

Preparing for the Changes

The Bill may require organizations to alter their internal governance policies relating to government relations and political contributions. Organizations should:

• Ensure their officers and directors, and employees interfacing with government officials are familiar with the new changes (including limits providing space or other resources for functions).
• Review and, where required, update their governance policies and employee training materials.

The Bill marks the first legislative effort by British Columbia’s new NDP Government to enhance transparency and potentially eliminate some of the perceived barriers to the general public's access to elected officials.

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