Backgrounder on Key Loopholes in Canada’s Lobbying, Ethics, Election, Political Donation and Spending Laws that Allow for Foreign Interference
(June 2024)
Foreign-agent registry must cover all foreign-influence activities, not just lobbying
The proposed foreign-agent registry must require anyone or any entity to register if they are paid or compensated in any way, directly or indirectly, by a foreign government, foreign entity or foreigner, or have any other type of arrangement with them, to be involved in Canada in public relations/communications or any political activities aimed at influencing politicians, parties or governments.
If the registry only requires people or entities paid to directly influence Canadian politics (which are the only activities covered by the bills that former Conservative Kenny Chiu and Senator Leo Housakas proposed), then it will require nothing more to be disclosed than what is already disclosed in the federal Registry of Lobbyists (under the federal Lobbying Act), and foreign agents will easily avoid being required to register (as some lobbyists do) by arranging to be compensated for other services or in some other way while doing the influence activities for free.
In June 2024, MPs from all parties approved Bill C-70, which creates a Foreign Influence Registry (FIR), but the bill has huge loopholes in it and the enforcement system will be weak, partisan, political and secretive. Click here to see details.
Commissioner of Lobbying and so-called Ethics Committee gutted 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 gutting last year of 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 gutting 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 ensured loopholes were added to allow lobbyists to give MPs hundreds of dollars in gifts and meals annually, and also tried to convince the Commissioner 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:
- Lobbying and influence activities do not have to be registered, even if they are well-funded efforts by a business or organization, if the people overseeing or doing the activities are not paid specifically to do the lobbying activities;
- Lobbying and influence activities also do not have to be registered if the lobbying is about the enforcement of a law, a government contract or a tax credit (which businesses mostly lobby about, so these loopholes hide mostly big business lobbying);
- 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;
- Even if a lobbyist, business or organization is required to register and disclose its lobbying, it is allowed to keep secret most of its lobbying communications with politicians, their staff and government officials, and;
- Even if a business or 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 2022. In fact, the Committee proposed, and the House approved on March 30, 2023, a new loophole in their ethics code 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 foreign governments and 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).
In addition, politicians and public officials are allowed to accept hundreds of dollars worth of gifts each year from anyone, including lobbyists, foreign governments and front groups and individuals they sponsor to interfere in and influence Canadian politics. Incredibly, the Criminal Code of Canada (clauses 121(1)(b) and (c)) and many ethics codes for government employees across Canada, allow politicians and public officials to accept even bigger gifts and benefits as long as their boss approves it.
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:
- Individuals, businesses and organizations are allowed to collude with and provide secret support to nomination race contestants and party leadership race contestants;
- Non-citizens and people who are younger than 18 are allowed to vote in nomination races and party leadership races;
- The high donation limit of $3,450 annually to each party and its riding associations makes it easy to funnel large donations to candidates and parties through just a few people;
- 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;
- Individuals, businesses and organizations are allowed to funnel money to each other to hide the actual source of funds used in election campaign spending;
- 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;
- 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.
(Click here to see infographic webpage and video about the flaws)
Lack of effective honesty-in-politics law makes false claims, misinformation and disinformation 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.
In November 2018, the Chief Electoral Officer and Commissioner of Canada Elections (CCE) both told the Senate that one of key rules prohibiting false claims, misinformation and disinformation is essentially unenforceable because it requires the CCE to prove that the statement was intended to influence the election.
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 are allowed to issue secret rulings, and can’t be held accountable for failing to enforce the law properly
Enforcement of Canada’s election, political donation, lobbying, ethics, anti-corruption and whistleblower protection laws is very weak, as all the watchdogs are handpicked by Cabinet through secretive, partisan, political appointment processes and they are largely unaccountable even if they don’t enforce the law effectively or properly. All of the watchdogs other than the Chief Electoral Officer and Commissioner of Canada Elections can also be re-appointed for more than one term in office solely by the ruling party Cabinet, which creates an incentive for the watchdog, during the last part of each term in office, to rule on situations in ways that please the Cabinet.
The watchdogs are also allowed to refuse to investigate an alleged violation of the law they enforce, even if there is clear evidence of a violation, and even if they do investigate they are allowed to keep their rulings on violations secret, which hides whether they are actually enforcing the law properly. Click here to see how the Ethics Commissioner from 2007 to 2017 made more than 200 secret rulings that let off federal politicians and senior government officials for alleged violations of the federal ethics laws. Click here to see how the Commissioner of Lobbying and RCMP from 2008 to 2017 made almost 90 secret rulings that let off lobbyists for violations of the federal lobbying law. And click here to see how the Commissioner of Canada Elections and Elections Canada kept secret how they dealt with more than 3,000 complaints filed with them between 1997 and 2011 about violations of the federal elections law
The watchdogs also can’t be challenged in court if they fail to do their jobs properly.
Under the RCMP Act, the RCMP Commissioner and Deputy Commissioner and the Commanding Officer of each Division of the RCMP, are also all appointed by the federal Cabinet alone (no consultation with the opposition parties is required, nor is an independent, merit-based search for qualified candidates required) and all of them also serve at the pleasure of Cabinet (i.e. they can be fired at any time for any reason).
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:
- It is not legally binding on the Panel, and there are no penalties if the Panel violates any part of the Protocol;
- 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);
- 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;
- 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.
- 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.
Whistleblowers are not protected
People who blow the whistle on wrongdoing in Canada are not protected when blowing the whistle, and are also not protected from retaliation after they report wrongdoing. A key step in effective enforcement to prevent foreign interference is to establish a best-practice whistleblower protection system that protects anyone who blows the whistle on violations of any of the laws/rules listed above, including empowering the independent commissions to pay for a lawyer to advise whistleblowers of their rights, to reward whistleblowers if their claims are proven, and to protect them from retaliation and penalize anyone who retaliates against them.
See more details at Democracy Watch’s Stop Foreign Interference in Canadian Politics Campaign, Stop Secret, Unethical Lobbying Campaign, Government Ethics Campaign, Money in Politics Campaign, Honesty in Politics Campaign, Stop Fake Online Election Ads Campaign, Stop Bad Government Appointments Campaign, Stop Unfair Law Enforcement Campaign and Protect Whistleblowers Who Protect You Campaign