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Backgrounder on Key Loopholes in Canada’s Lobbying, Ethics, Election, Political Donation and Spending Laws that Allow for Foreign Interference

(May 2023)

Commissioner of Lobbying and so-called Ethics Committee propose to gut key ethical lobbying rules in ways that will increase foreign interference

As more than 40 lawyers and professors, and 26 citizen groups, and the Globe and Mail (twice) have called for, the House Ethics Committee must reverse its positions and reject federal Commissioner of Lobbying Nancy Bélanger’s proposal to gut key ethical lobbying rules in the Lobbyists’ Code of Conduct in ways that will make secret interference in elections and secret activities to influence federal MPs easier for China and other foreign governments.

Commissioner Bélanger is proposing to gut key ethical lobbying rules in the Lobbyists’ Code in ways that will allow lobbyists to secretly fundraise unlimited amounts of money for, and do significant campaigning for, politicians and their parties and lobby them at the same time or soon afterwards.

The so-called Ethics Committee also wants loopholes added to allow lobbyists to give MPs hundreds of dollars in gifts and meals annually, and to continue to allow lobbyists to give MPs trip junkets worth thousands of dollars annually.

Loopholes in lobbying law allow for secret lobbying

The federal Lobbying Act contains huge loopholes that allow for secret lobbying and hiding who is behind and funding influence activities such as ad and social media campaigns that appeal to voters to pressure MPs. Some of the biggest loopholes are:

  1. Lobbying and influence activities do not have to be registered, even if they are well-funded efforts by an organization, if the people overseeing or doing the activities are not paid specifically to do the lobbying activities;
  2. Businesses and organizations are not required to register and disclose their attempts to influence MPs if their employees all together lobby less than 20% of their work time, and;
  3. Even if a lobby group is registered, it is not required to disclose its source of funding (other than Canadian government funding) or how much it spends on its lobbying and influence activities.

Loopholes in ethics laws allow for unethical decision-making

Federal ethics rules have huge loopholes that allow MPs to have secret jobs, Cabinet ministers and top government officials to have secret investments, and everyone to participate in decisions that they profit from, and to act unethically in many other ways.

The Procedure and House Affairs Committee failed to address any of these loopholes when it reviewed MP ethics rules in secret last year and issued an initial report in June. In fact, the Committee proposed, and the House approved on March 30th, a new loophole in their ethics rules that now allows lobby groups, including foreign-government sponsored groups, to pay for interns in MPs’ offices.

The Senate’s ethics code has many of the same loopholes, although it contains a few rules enacted in 2014 that, if the Senate Ethics Officer ever enforces the rules properly, will finally prohibit the unethical business activities and decision-making conflicts of interest by many Senators that the code currently allows.

Federal ethics laws also allow lobbying organizations to give MPs and Senators the gift of unlimited trips and junkets, and they are allowed to take their family members, staff and associates with them (known as the “sponsored travel” loophole).

Loopholes in election law makes foreign interference and influence easy

The Canada Elections Act has several flaws that make interference and influence easy by foreign-government connected or sponsored individuals, businesses and organizations, as follows:

  1. Individuals, businesses and organizations are allowed to collude with and provide secret support to nomination race contestants and party leadership race contestants;
  2. Non-citizens are allowed to vote in nomination races and party leadership races;
  3. The high donation limit of $3,300 annually to each party and its riding associations makes it easy to funnel large donations to candidates and parties through just a few people;
  4. The identities of people who donate less than $200 annually are not required to be disclosed, making it easy to funnel donations of less than $200 through many people to candidates and parties;
  5. Individuals, businesses and organizations are allowed to funnel money to each other to hide the actual source of funds used in election campaign spending;
  6. One wealthy individual, or a business with just a couple of shareholders, or an organization supported by just a couple of voters, is allowed to spend up to $1 million during the pre-election period, and more than $500,000 during the election campaign, trying to influence voters;
  7. Nomination race contestants, election candidates, parties and party leadership contestants are allowed to audit their own campaigns, which makes it easy for them to hide illegal donations and spending.

Lack of effective honesty-in-politics law makes false claims legal

Many types of false claims are allowed about election candidates, party leaders and MPs, and no enforcement agency has the power to order social media companies to remove false online posts or ads.

As well, the Liberal government’s election integrity plan was too weak and focused on the twin charades of educating citizens to recognize misinformation (which is impossible unless you are an expert in everything) and cooperating with social media companies that continue largely ineffective efforts to stop misinformation.

Enforcement watchdogs are handpicked partisan lapdogs who lack key powers and accountability

Enforcement of Canada’s election, political donation, lobbying and ethics laws is very weak, as all the watchdogs are handpicked by Cabinet through secretive, partisan, political appointment processes and they all lack key powers.

The watchdogs also can’t be challenged in court if they fail to do their jobs properly.

The Liberal government’s so-called “independent” Critical Election Incident Public Protocol Panel is not independent at all, as it is made up of public servants who were chosen by, and serve at the pleasure of, Prime Minister Trudeau, and the Cabinet Directive for the Protocol has several flaws that allow for coverups of foreign interference. If the Panel members are not fully independent of the government and all political parties, and the flaws in the Protocol are not corrected, then the Panel will continue to cover up foreign interference instead of reporting it publicly and stopping it.

Also, the Trudeau Liberals’ Cabinet Directive for the Protocol has several flaws, as follows:

  1. It is not legally binding on the Panel, and there are no penalties if the Panel violates any part of the Protocol;
  2. The section 6.0 process sets a much-too-high threshold for informing the public of interference (the interference essentially must threaten the ability of the entire national election to be free and fair);
  3. Even if the Panel decides (by consensus) that the interference meets the threshold, the section 5.0 process does not set any deadline by which the Panel is required to inform anyone of the interference;
  4. The section 9.0 Assessment also does not set any deadline by which a so-called “independent” report is required to be released about the effectiveness of the Protocol at “addressing threats” during the previous election.
  5. The section 9.0 Assessment is done by whomever the ruling party Cabinet chooses, so the assessor is not independent in any way. Trudeau’s Cabinet chose Morris Rosenberg, former head of the Trudeau Foundation when the Foundation received a $200,000 donation donation from two China-connected businessmen, to do the assessment for the 2021 election. Mr. Rosenberg’s contract terms have not been disclosed in the federal government contract registry.

See more details at Democracy Watch’s Stop Secret, Unethical Lobbying Campaign, Government Ethics Campaign, Money in Politics Campaign, Honesty in Politics Campaign, and Stop Fake Online Election Ads Campaign