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Canada Political Party Financing

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The financial activities of political parties in Canada were largely unregulated until the Election Expenses Act was passed in 1974. Canada now has an extensive regime regulating federal political party financing; both during and outside of election periods. Such regulation encourages greater transparency of political party activities. It also ensures a fair electoral arena that limits the advantages of those with more money. Political parties and candidates are funded both privately and publicly. Election finance laws govern how parties and candidates are funded; as well as the ways in which they can spend money. (See also Canadian Electoral System.)

Party and Election Finance Laws

Private Funding

Canada’s federal election finance laws put limits on contributions to political parties and candidates. Only individuals — not corporations or trade unions — may donate. Contributions are limited to up to $1,500 a year to each political party and up to $1,500 to all of the registered electoral district associations; as well as contestants seeking the party’s nomination and candidates for each party. In addition, donors may give up to $1,500 to leadership contestants and up to $1,500 to independent candidates. These limits were set in 2015. The amounts increase by $25 each year. Politicians must disclose the names of anyone who donates more than $200.

Public Funding

Canada’s system of party and election finance regulation provides two forms of state funding to political parties and to candidates.

First, political parties and candidates are reimbursed for some of their election expenses. ( See Political Campaigning in Canada.) Political parties that received either two per cent of the national vote or five per cent of the vote in the districts in which they ran candidates get back 50 per cent of the money they spent. Candidates who received at least 10 per cent of the vote receive 15 per cent of the election expenses limit in their district. If the candidate spent at least 30 per cent of the limit during the election, the reimbursement increases to 60 per cent of what the candidate spent.

Second, Canada provides generous tax credits for donations to political parties and candidates. The first $400 of donations receives a 75 per cent tax credit. An amount between $400 and $750 receives a 50 per cent credit. Amounts over $750 receive a 33 per cent credit. An individual’s total tax credit in one year cannot exceed $650.

Spending

Political parties and candidates face limits on the amounts they may spend during an election. Political parties may spend 73.5 cents for every voter in districts where they are running candidates. For their local campaigns, candidates may spend an amount based on the population of the district in which they are running. This is typically between $75,000 and $115,000. If the election campaign is longer than 36 days, as was the case in 2015, the limits for both parties and candidates are increased proportionately.

Groups or individuals other than political parties and candidates — also known as third parties — may spend no more than $150,000 during an election. No more than $3,000 of that may be spent in any one district. Critically, all these limits to spending apply only during the election period; between when the writs of election have been issued (when the election is officially called) and election day.

Provincial and Territorial Regulation

Canadian provinces and territories have introduced their own political finance regulations. These vary by province and territory. All provinces and territories provide tax credits for contributions. They also require disclosure of the identity of donors who give more than a certain amount. Most provinces and territories set limits on the amounts that individuals can donate in any given year. All provinces and territories, except Alberta and Yukon, also put limits on spending during elections. QuebecNova ScotiaManitoba and Alberta have banned corporate and other organizational contributions altogether. In these provinces, only individuals are allowed to give money to political parties.

Historical Background

Canada now has an extensive regime regulating political party and election finance. But this was not always the case. Before 1974, the financial activities of political parties were largely unregulated. From Confederation until about 1897, party funds were used to overcome weak partisanship. At the time, some partisan Members of Parliament did not always follow party lines. As a result, party leaders were directly involved in fundraising and in distributing election funds to ensure the loyalty of their followers. The Liberals and Conservatives also tended to rely on corporate donations. This led to periodic scandals, such as the Pacific Scandal. However, these were not enough to prompt comprehensive regulation of political party finance.

As partisanship crystallized, party leaders tried to distance themselves from the raising of campaign funds. Fundraising specialists gradually assumed this role. Party leaders were freed from direct involvement in this aspect of party politics. (See also Political CorruptionConflict of Interest.)

Regulation: Election Expenses Act (1974)

Canada’s political parties began to run into financial difficulties in the 1960s and early 1970s. At the time, a series of minority governments resulted in more frequent elections. Meanwhile, television advertising and polling became integral parts of campaigns. As a result, political parties faced rising campaign costs. These factors led to the passage of the Election Expenses Act in January 1974. At the heart of the law was a bargain: political parties would receive state money in return for greater regulation of their financial activities.

The Election Expenses Act established most of the principles at the heart of Canada’s regulatory regime. It established a tax credit system for donations and a system of reimbursements for election expenses; as well as the principle of disclosure of election donations over $100. The legislation also placed limits on the amount that candidates and political parties could spend on campaigns.

This helped to ease the financial woes of Canada’s political parties. But the Election Expenses Act also changed the financial basis of Canadian parties. The tax credit system created an incentive for individuals to donate to parties. More importantly, it also created an incentive for political parties to solicit individual donations. As such, the new system reduced the reliance of parties on corporate donations.

Third-Party Spending

In the three decades following the passage of the Election Expenses ActParliament made only minor changes to the regulation of political parties and candidates. Most of the significant debate had to do with the regulation of third-party spending; that is, money spent during elections by groups other than political parties and candidates. In 1983, Parliament banned third-party advertising during elections. However, the National Citizens Coalition successfully challenged the law as a violation of the Charter of Rights and Freedoms in 1984. In 2000, Parliament passed the current limits on spending by third parties. The Supreme Court upheld these limits in 2004.

Political Party Allowances

The most significant change to Canada’s election finance regime came in 2004. Starting that year, corporations and trade unions could no longer donate to political parties. Instead, they could donate only small amounts to candidates. The law also placed a $5,000 limit on the amount that individuals could donate. In return for eliminating a significant source of party funding, Parliament enriched the tax credits and the reimbursements. Most significantly, the legislation established a quarterly allowance; it paid qualifying political parties $1.75 per vote per year for every vote they received in the previous election. The 2004 changes also extended the reach of finance regulation to things that had previously been seen as internal party matters. These include nomination and leadership contests.

These changes had a significant effect on the competitive balance between political parties. The Conservative Party flourished because of its success in raising money from individual donors. The Bloc Québécois did well because of the quarterly allowance. The legislation also contributed to the rise of the Green Party of Canada. The New Democratic Party (NDP) was reasonably successful under the new rules. The Liberals fared the worst; partly because of the party’s reliance on corporate donations. This was an ironic outcome for the creators of the law.

2008 Coalition Crisis

When the Conservatives came to power in 2006, they made minor changes to the 2004 regime. Corporate and union donations to candidates were eliminated. The maximum individual donation was lowered to $1,000. After the 2008 election, the Conservatives introduced legislation to remove the quarterly allowance. This sparked the 2008 coalition crisis. The opposition parties united to try to replace the minority Conservative government with a Liberal– NDP coalition backed by the Bloc Québécois. The government relented. However, after winning a majority government in 2011, it passed legislation phasing out the quarterly allowance. It officially ended in spring 2015.

The passage of the Fair Elections Act in 2014 saw minor changes to Canada’s party finance laws. These included an increase in the amount that individuals could donate to political parties and candidates (a $1,500 limit set in 2015 and increased by $25 each year); as well as increases to the spending limits.

Controversy

Because money is such an important resource in elections, party finance laws are often controversial. One of the enduring issues is the appropriate balance between public and private funding of parties; as well as the appropriate way to provide public funding. Proponents of public funding argue that it promotes transparency and reduces the potential for corruption. Opponents claim that public funding might insulate political parties from party members and voters who signal their discontent by withholding donations. The quarterly allowance was particularly controversial in this respect. For example, the Bloc Québécois got around 90 per cent of its income from public sources while the quarterly allowance was in effect.

The tax credit system, on the other hand, provides public funding to parties. But it also encourages them to connect with individual donors. It is much less transparent, however, than the other forms of public funding.

Another continuing source of controversy is the limits placed on third parties. Canada’s election finance regime recognizes political parties and candidates as the primary political actors in elections. It also places more stringent limits on the activities of advocacy groups and others who seek to intervene during elections. This limits the range of viewpoints expressed during elections. It also prevents parties from working around spending limits by having advocacy groups advertise on their behalf. (This scenario is common in the United States.)

A more recent concern has to do with the interaction of fixed election dates with spending limits. Election spending limits only come into effect when the election is called and only cover the official campaign. It typically lasts 36 days. With fixed election dates, however, parties, candidates and third parties all know when the election will be; they can therefore advertise significantly before the election is called. This renders the spending limits much less effective.

Significance

At the heart of the above controversies, and the regulation of political party financing itself, is a tension between the liberal democratic principles of freedom and equality. On the one hand, liberal democracies recognize the freedom of citizens to use their resources — including money — to achieve their political objectives. On the other hand, such freedom can compromise the fundamental political equality of citizens by giving those with access to greater financial opportunities greater influence over the electoral process. It is this tricky balance that Canada’s regulation of political party finance attempts to strike.

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Playing politics with the Governor-General's constitutional role – The Globe and Mail

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When Jagmeet Singh sent a letter to Mary Simon urging her to refuse any request from Justin Trudeau to call an election, the NDP Leader knew perfectly well she would have no choice but to grant the Prime Minister’s request.

But such grandstanding is nothing new. It seems to be an unspoken role of the Governor-General to serve as a foil for opportunistic politicians who know that many Canadians don’t really understand what the Queen’s representative can or cannot do.

Mr. Singh urged Ms. Simon, who had been on the job one whole day, not to dissolve the 43rd Parliament if Mr. Trudeau requested it, because the Liberal minority government had won every vote of confidence, and the fixed election date is still more than two years away.

Governor-General will agree to a Trudeau request to call a snap election, expert says

Mr. Singh was speaking nonsense. If Mr. Trudeau were to ask Ms. Simon to dissolve Parliament and issue writs of election, “she would have no choice but to comply,” said D. Michael Jackson, president of the Institute for the Study of the Crown in Canada. “There is no constitutional reason why she should decline the advice of the Prime Minister.”

“The Governor-General’s only option is to acquiesce and dissolve Parliament,” said Andrew Heard, a political scientist at Simon Fraser University who specializes in constitutional issues, though he said he did not think the Prime Minister should be making such a request.

Because Canada’s Westminster-style constitution is largely unwritten, not everyone agrees on everything. But generally speaking, here is how things work:

After a federal or provincial election, the party in power before the legislature dissolved may remain in power, even if that party won fewer seats than another party, provided it has the confidence of the legislature. After the 1925 federal election, Liberal prime minister Mackenzie King chose to meet Parliament, even though Arthur Meighen’s Conservatives had won more seats. Mr. King was able to govern, for a time, with the support of the Progressive Party.

If the governing party loses a vote of confidence after it meets the legislature, the governor-general or lieutenant-governor does have a choice. On April 29, 2017, Liberal premier Christy Clark visited B.C.’s then lieutenant-governor, Judith Guichon, after the Liberals were defeated in a vote of confidence following the provincial election.

Ms. Clark advised Ms. Guichon to dissolve the legislature and call another election. Ms. Guichon could have done that. Instead, she invited NDP Leader John Horgan to test the confidence of the legislature. The Greens had already announced they would support the NDP.

“If there is a viable alternative government, within a relatively short period after an election, the governor-general can consider refusing the advice for an election,” said Mr. Heard. But Mr. Trudeau has governed in this Parliament for almost two years.

In 2008, when prime minister Stephen Harper asked then governor-general Michaëlle Jean to prorogue Parliament, even though the Liberals, NDP and Bloc Québécois had announced they were ready to defeat his government and install Liberal leader Stéphane Dion as prime minister, Ms. Jean followed Mr. Harper’s advice, because his government had survived a vote of confidence on the throne speech, several weeks before.

In 1926, when Mackenzie King finally lost the confidence of the House, he advised governor-general Julian Byng to dissolve Parliament. Instead, Mr. Byng called on Mr. Meighen to form a government. Since Mr. King had governed at that point for several months, he should not have done that. In any case, Mr. Meighen’s government was swiftly defeated and Mr. Byng had no choice but to call for an election, which Mr. King won.

Politicians understand how the system works: Apart from the very early days of a hung Parliament, the governor-general does whatever the prime minister advises. But sometimes opposition politicians play games. After the 2004 election – when Liberal prime minister Paul Martin helmed a minority government – Mr. Harper, as opposition leader, NDP leader Jack Layton and Bloc Québécois leader Gilles Duceppe sent governor-general Adrienne Clarkson a letter urging her not to dissolve Parliament if Mr. Martin failed to obtain the confidence of the House. That letter was also grandstanding: Ms. Clarkson well knew her prerogatives.

The governor-general, as the Queen does, has the right to advise, to encourage and to warn her prime minister. If Mr. Trudeau does ask for dissolution, Ms. Simon might very well advise, encourage, or warn. But she will say that in private, and then she will do her duty.

As Jagmeet Singh knows perfectly well.

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Italy’s Mr. Fix-It Tries to Fix the Country’s Troubled Justice System — and Its Politics, Too – The New York Times

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The issue has become a test for whether Prime Minister Mario Draghi can really change Italy.

LODI — If there is one person who does not have to be persuaded of the need for Italy’s urgent push for judicial reform — which Prime Minister Mario Draghi has staked his leadership on — it is the former mayor of the northern town of Lodi, Simone Uggetti.

Early one morning, Lodi’s financial police knocked on his door, hauled him off to prison, strip searched him and put him in a small cell with a convicted murderer and a drug dealer. It was the start of a five-year ordeal — over the awarding of city contracts, worth 5,000 euros, to manage two public pools — that was used by his political opponents to destroy his career, his credibility, his reputation and his family.

“Who are you? You’re the mayor who got arrested, all your life,” Mr. Uggetti said this week, still visibly shaken by the experience, which ended only in May when an appeals court absolved him, saying no crime had ever taken place. He wept in court. “It was the end of a nightmare,” Mr. Uggetti said. “Five years is a long time.”

Such cases are all too common in Italy, where the far-reaching power of sometimes ideologically driven magistrates can be used to pursue political vendettas or where businesses can easily become ensnared in cumbersome and daunting litigation that is among the slowest in Europe.

Mr. Draghi is so convinced Italy’s courts need fixing that he has said he is willing to risk his government’s survival on the issue, by putting to a confidence vote new legislation that would shorten civil and criminal proceedings. Without speedier trials, he argues, all the economic renewal and political change required in Italy will not come — and there is a lot that needs changing.

Elisabetta Zavoli for The New York Times

On Thursday evening, the government announced it had reached a unanimous agreement with a broad array of interests in the government. A vote will take place in coming days.

“The objective is to guarantee a speedy justice system that respects the reasonable duration of a trial,” Marta Cartabia, Italy’s justice minister, said Thursday night after the announcement. “But also guarantees that no trial goes up in smoke.”

The issue has become the first major test, beyond vaccinations, of whether Mr. Draghi, a titan of the European Union who helped save the euro, can leverage his formidable Mr. Fix-It reputation and the grand political coalition behind him to solve a long-festering problem that has threatened the democratic process and economy in Italy, the last of Europe’s major powers to escape far-reaching overhauls of its postwar systems.

Mr. Draghi’s gambit has all the potential to change a country where, as the saying goes, “you aren’t anybody unless you are under investigation.” It is nothing less than an attempt to restore Italians’ confidence in their political leaders and institutions after decades of anti-establishment vitriol, angry headlines and social media invective.

The threat of endless litigation, Mr. Draghi has argued, scares off foreign investors, constrains growing Italian companies, and could even keep Italy from meeting the requirements imposed by the European Union to gain its share of a more than 200 billion euro post-Covid recovery fund.

“Justice is one of the keystones of the recovery,” said Claudio Cerasa, the editor of il Foglio, a newspaper that has emerged as the voice of protecting the rights of defendants, and also frustrated accusers, from slow and politicized justice. He said Mr. Draghi “depoliticizes the conflict and brings it on a different level, which is the Draghi trademark, he transforms everything into common sense.”

Still, it is no easy task. But Mr. Draghi is betting that, after many decades, the political winds around the issue have shifted in his favor.

Justice emerged as perhaps the central theme of contemporary Italian politics in 1992, when the watermark Clean Hands investigation exposed complex, vast and systemic corruption that financed the country’s political parties.

The scandal came to be known as Bribesville and brought down a ruling class, marking the end of Italy’s First Republic after World War II.

Prosecutors became public heroes and, capitalizing on the spreading impression that all politicians were guilty of something, stepped into the power vacuum.

But so did Silvio Berlusconi, the brash media mogul, who became prime minister and a constant target of prosecutors who investigated him for corruption and other crimes. He portrayed them as politically motivated Communists, or “red robes,” and almost always beat the rap by running out the clock and reaching a statute of limitations.

That infuriated magistrates and eventually fueled a “hang ’em all” populist backlash led by the anti-elite Five Star Movement, which once again depicted the political establishment as a corrupt caste.

By 2018, Luigi Di Maio, one of its leaders, made lists of all rival candidates under investigation and called them “unpresentable.” The media splashed accusations and leaked investigations on front pages, and then barely mentioned or buried dropped charges or acquittals.

Max Rossi/Reuters

Now, that anti-establishment season seems to be waning, and populists have apparently made the calculation that, electorally, “lock-em up” no longer pays.

Mr. Di Maio, who led j’accuse Five Star protests against Mr. Uggetti and once rode the popular anger to victory in national elections, is now contrite. Now Italy’s foreign minister, he wrote an apology in Il Foglio to Mr. Uggetti after his acquittal in May for the “grotesque and indecorous manner” he behaved.

But Mr. Cerasa, Il Foglio’s editor, suspected that the change may be more tactical than heartfelt. He said that parties that wielded the judicial system as a weapon also felt its scorpion sting while in power, and faced a barrage of civil and criminal cases.

But something else has changed: Mr. Draghi has now become the organizing force of Italian politics.

With hundreds of billions of euros of E.U. assistance hanging in the balance, and a pandemic still in the air, establishment chops and palpable sanity are in high demand. Mr. Draghi is seen to have both and has seized the moment to consolidate power.

Gregorio Borgia/Agence France-Presse — Getty Images

No political novice, Mr. Draghi appears to have the support to pass his judicial legislation — and to put Italy on more solid footing by baking lasting change into the system.

The government’s agreement on the legislation includes Five Star, which had expressed concerns about letting criminals off the hook, but which ultimately agreed to withdraw their proposed amendments. Other backing came from the nationalist League party of Matteo Salvini; Mr. Berlusconi’s party on the right; the liberal Democrats on the left; and Matteo Renzi, the former prime minister.

Not everyone is enthusiastic, though.

Marco Travaglio, the editor of Il Fatto Quotidiano, which has deep ties to magistrates and has served as a megaphone for Five Star’s aspersions, has been lashing out and angrily resisting what increasingly feels like the end of an era in Italian politics. This month he mocked Mr. Draghi as a privileged brat and characterized his justice minister, Ms. Cartabia, a former president of Italy’s constitutional court, as a rube who “cannot distinguish between a tribunal and a hair dryer.”

But for the most part, people are on board with Mr. Draghi, and Mr. Uggetti hoped that the prime minister would bring more balance to the system that nearly ruined him.

Elisabetta Zavoli for The New York Times

Mr. Uggetti now works as the chief executive of a tech firm outside Lodi developing business management software. “I’m rebuilding my life,” he said.

Still, he misses being mayor. As he walked around the pool that was the source of his judicial nightmare, and which is now an empty ruin, he ticked off all the things he would fix (bike paths and roads), and pointed out historical tidbits (a bridge where Napoleon won a major battle, a statue of a scientist) as if he still represented the town.

He considered running for mayor again a possibility. But there was another possibility too. In Italy, a higher court can overrule an appeals court, cancel an acquittal and put a person on trial again. That higher court still has time to decide to retry him.

“They have the power to say ‘No, this appeal sentence is no good,’” he said, shaking his head. “I really hope that it finishes here.”

Emma Bubola contributed reporting from Rome.

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Totalenergies CEO says its decision to exit Petrocedeno not linked to politics – Reuters

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A general view of a logo on the TotalEnergies headquarters in the La Defense business district in Paris, France, July 28, 2021. REUTERS/Benoit Tessier

PARIS, July 29 (Reuters) – TotalEnergies said on Thursday that the sale of its 30.3% stake in Petrocedeno was not linked to the political situation in Venezuela, its chief executive said.

Patrick Pouyanné was speaking during an analyst call.

Reporting by Benjamin Mallet. Editing by Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

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