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Calgary campaign finance: ‘It will be an election of the PACs’

Look Forward’s Pete Meadows said new rules around third-party advertising means political action committees (PACs) have “almost unfettered capacity to raise money,” in Calgary’s upcoming municipal election.

The new rules have many believing the October 2021 Calgary municipal election will be won or lost through which PAC has the deepest pockets and furthest reach.

This is part three in our series on Calgary’s municipal campaign financing.

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In our first piece, we showed that roughly 30 per cent of 2017 campaign cash for sitting councillors came from Calgary’s development community.  That story came out as the city was reviewing 11 business cases for new community development. Subsequently, those communities did not get approval.

The second piece highlighted that, while 1/3 of campaign cash came from the city’s development community, a further $750,000 couldn’t be tracked to any specific donor. (Lack of) rules around fundraising events make that possible. There are no specific rules around the tracking of those participants. Some councillors accounted for the funds, others didn’t.

This third instalment of the series examines the role of third-party advertising (TPA) and its impact in the upcoming Calgary municipal election.

Note: TPA and PAC could be used interchangeably depending on the reference used by people we spoke with for this story.  

PACs and third-party advertising (TPA)

Many associate third-party advertising with US-style elections. They’re like those “paid for by…” ads piped in via television or transmitted on radio.  Now, of course, they’re on the Internet in our social media feeds.

It’s existed in Alberta for some time, primarily at the provincial and federal levels and occasionally at the municipal level.

The province’s Local Authorities Election Act loosely defines a TPA as one who has (or plans to) incurred an expense of $1,000 for election or political advertising or accepts a contribution(s) in the same amount.

They must register with the local election authority. They also must file a disclosure after the municipal election. The legislation lacks specifics on how detailed those reports must be, especially pertaining to fundraising activities.

With the province’s 2015 ban on direct corporate and union contributions to candidates, it’s expected that more money will flow through these entities into indirect support for candidates or issues.  The 2015 legislation capped TPA spending to $150,000 during a campaign period. 

Now, candidates can only receive donations – up to $5,000 – from individuals. Individual contributors can, however, make that $5,000 donation to as many candidates as they choose.

The province recently passed legislation (Nov. 2, 2020) allowing contributions of up to $30,000 per donor to go to TPAs. Bill 29 (Sept. 2020) removed TPA spending caps outside the six months prior to election day.

According to the Local Authorities Election Act (147.91), the minister can make regulations determining campaign expense limits within a year of an election.

What will be the imPACt?

Lisa Young, professor of political science at the University of Calgary, said PACs may not play the role some anticipate.

She said what will occur is something called a displacement effect. Money that would otherwise have gone to candidates that a person, company or union supported, will instead go through PACs.

“What (donors) do is they go off and they do their spending through a third-party organization, or a political action committee, rather than by donating to the party or the candidate,” she said.

Quite often PACs form to lobby for specific issues on ballots, Young said.

What potentially makes the 2021 municipal election different from years past is the inclusion of referenda, she said. These are political issues on the ballot (example: residential speed limits). TPA spending limits on these items, according to Elections Alberta, is $500,000.

“If they’re going to be tied to referenda, then you’ve got political action committees that are spending in the referendum, and that might affect who comes out to vote,” Young said.

Mount Royal University political science professor, Lori Williams, said the potential for money being spent depends on the ward race itself.

“The fact that more money can be spent on advertising means that there is the possibility some groups could have significant influence in the time leading up to the election,” she said.

“That would impact people’s votes because of the advertising money.”

Legislation opened the door for rise of TPA influence: Meadows

(Note: Look Forward, Calgary’s Future, Save Calgary, Common Sense Calgary and Take Back City Hall were contacted for this piece. Common Sense said they were policy based and didn’t support candidates – they didn’t fall under TPAs, they said. Save Calgary and Take Back City Hall did not respond.)

Pete Meadows, executive director of Look Forward, a group that will be a third-party advertiser in the Calgary municipal election, said recent deregulation around TPAs spurred them into action.

Meadows said TPAs will be able to spend significantly more money than candidates. It shifted funding away from candidates and into third parties.

“That means the discourse around the election is going to be shaped by third-party advertisers,” he told LiveWire Calgary.

“They will be the ones with the most means to do so.”

Meadows said they formed the group with this in mind. They, like other PACs, want to support those candidates that share a similar vision with Look Forward.  They want evidence-based outcomes and they’ll support candidates with the same approach.

He said that there will be PACs based on ideology or group interests.

“Whether I think we’re going to be an effective counterbalance to those forces, I think remains to be seen,” he said.

Rev. Anna Greenwood-Lee of Calgary’s Future, the only currently registered TPA for the municipal election, said they want to ensure citizen voices are heard.  

Greenwood-Lee said their goal is to get more people involved in the election.

“With the changing of the rules, there is a danger that this election becomes too narrowly defined by too small a group of people,” she said.

“This is the area where we do actually have the most say, and my hope is that more Calgarians start to understand how city politics work.”

TPA transparency

Greenwood-Lee said one of their founding principles is around transparency. They want people to know who they’re getting money from and where it’s going.

Right now, their website states they’re supported by local labour groups. They’ve yet to declare support for candidates, if they will at all.

TPA disclosure reporting isn’t much different than that of candidates. Rules aren’t explicit in how funding is documented and then reported. General rules apply to their disclosures – they must have one, and it needs to show donor contributions and then how that money was spent.

Only if a TPA spends more than $350,000 does it need to provide an audited statement.  If they don’t spend that much, statements aren’t reviewed for accuracy.

Donors aren’t required to be disclosed prior to the election day on Oct. 18, 2021. The province rescinded a municipality’s ability to create bylaws around pre-election disclosure rules.

Meadows said they’d follow the provincial rules around their finance reporting.

“We’re interested in being as transparent as we can,” he said.

“Under the current legislation for the funders that we have right now, we’re not disclosing their identities or specific amounts, because that information is private. And because it undermines our ability to compete with other PACs,” he said.

Along with donors from a variety of sectors in Calgary, Look Forward also has a membership program for individuals.

Meadows said they will be clear on their platform and who they endorse prior to the 2021 Calgary municipal election.

Shifting campaign dollars – Candidates past and present say PACs will influence election

Current Ward 3 Coun. Jyoti Gondek believes PACs will define the upcoming Calgary municipal election.

She said it’s due to the amount of money that can be collected – and spent – by these groups.

“This will not be an election of the people,” she said.

“It will be an election of the PACs.”

At the very least, said Greg Miller, who ran unsuccessfully in the 2017 Ward 4 race, we need to know where the PAC money comes from. They should be scrutinized accordingly, he said.

“We should absolutely have a clear understanding of where they spend it and they should be highly regulated,” he said.

Most agree campaign finance rules tipped the balance in favour of TPAs or those candidates and issues they support.  Many have said money that once went into candidate campaigns will now make its way through PACs.  

With rules around individual contributions to candidates, it makes an already difficult task of fundraising more challenging. Unless you’re favoured by one of the PACs.

Former Ward 11 Calgary city councillor Brian Pincott said it’s virtually impossible to run a good campaign without this cash. For those candidates who aren’t incumbents, it’s already a struggle to raise capital.

“So, the playing field is completely unleveled,” Pincott said.

“And the more money that gets into elections, the less level it is all along.”

Calgarians will vote Oct. 18, 2021.

  • With reporting from Omar Sherif