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Confusion on the horizon in election advertising

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Image: Peter Blanchard/Flickr

Two jarring incidents occurred at the end of August that could indicate more confusion and complications than usual in the upcoming federal election.

First, Canada's chief electoral officer, Stéphane Perreault, warned that non-profits would risk their tax status if they placed ads about the climate crisis during the upcoming federal election.

Second, furor arose over billboards that popped up all over Canada with Maxime Bernier's image and the slogan, "Stop mass immigration," placed by an ad agency on behalf of a still-undisclosed client.

Let's start with the chief electoral officer. Anyone who's ever volunteered with a non-profit organization knows how far these groups can stretch a dollar, much less a clever social media ad or video. For some, the registration fee was more than their entire advertising budget. The alternative, Perreault hinted, was they would risk their charitable tax status.

Wrong! The Canada Revenue Agency waited a tactful day or two for the CEO to walk back his comment before issuing a statement reiterating that the CRA will abide by new rules that came into effect on December 13, 2018.

Old CRA rules limited a charity's spending on advocacy to about 10 percent of its expenditures. Ontario Supreme Court Justice Edward Morgan ruled that section of the Act null and void on July 18, 2018, and by December the Liberal government had changed the act to comply -- and to permit civil society groups greater voice at all times, including elections.

According to the CRA, the Budget Implementation Act of 2018 re-states that "all the charity's resources must be devoted to charitable activities carried on by the charity itself." However, for the first time, the act specifically allows charities to speak out on political topics, saying (emphasis added): "Charitable activities include public policy dialogue and development activities (PPDDAs) that further a charitable purpose.

"PPDDAs (public dialogues, i.e., advocacy) generally involve seeking to influence the laws, policies, or decision of a government, whether in Canada or a foreign country.  As long as a charity's PPDDAs are carried on in furtherance of its stated charitable purpose(s), the Income Tax Act places no limits on the amount of PPDDAs a charity can engage in. In this context, a charity may devote up to 100% of its total resources to PPDDAs (advocacy) that further its stated charitable purpose."

Bonus! As the CBC reported:

"The decision raises questions about a $13.4-million political-activities audit program launched by the former Conservative government in 2012, which targeted 60 charities, some of whom are still caught. Toronto-based Environmental Defence, for example, was among the first to be targeted, and has been issued notice that its charitable status will be revoked because it exceeds the 10 per cent rule. The group has spent $200,000 in legal fees alone to navigate the audit process."

Third parties are becoming more active because party funding is shrinking. At first, the 2004 election reform banned corporate and union donations, but replaced some of that revenue by allowing a registered party that won a certain percentage of the vote to collect $1.75 in public funding for each vote it earned.

Smaller parties (like the Bloc Quebecois and the Green Party) loved the system. The NDP managed all right, and the Liberals suffered slightly. Reduced under the Liberals, political party allowances were eliminated completely under the Conservatives in 2015, after a loud parliamentary stand-off in 2011. Now the 2018 act caps total campaign spending at a much decreased limit. Third parties, however, have much more latitude.

Unions were the top third-party advertisers in the 2015 election, the National Post reports, just as they were among the top contributors to the more progressive parties before 2004. Unions usually proudly comply with the requirement that such advertisers include their name, address and phone number prominently on issue ads or partisan ads -- which the Maxime Bernier billboard did not do.

Elections Canada insists that civil society groups need to register with them, in order to advertise about issues, even if the registration fee is larger than their whole advertising budget. Ideally, verified contact information should provide some kind of public safeguard in identifying offshore or mischievous third-parties. And Elections Canada does have power to compel testimony, if not to prosecute. However, with the Maxime Bernier billboards, so far True North Strong and Free Advertising Agency has gotten away with shielding their client.

On the other hand, Caroline Orr at the National Observer tracked True North back to its registered owner, mining executive George Smeenk, who told her that True North was created as a "vehicle" for third-parties who wanted to place ads before the pre-election period.

"The increased involvement of third parties not only opens new doors for dark money and influence, but also for disseminating disinformation," Orr concludes. "And as in the case of the billboards, holding those actors accountable for their activity isn't always easy, in large part because those actors are often hard to track."

Pre-election rumbles and pundit prognostications already predict a nasty federal election ahead, based on the tenor of early Conservative attacks. Third-party ads could play the "kamikaze" role -- an attacker apparently arms-length from a rival -- that Jason Kenney is alleged to have deployed against Brian Jean, Kenney's main rival for the Alberta UCP leadership.

The problem is international, and so are the solutions.

Anita Nickerson of Fair Vote Canada kindly pointed out the U.K.'s Coalition for Reform in Political Advertising, formed in May 2018 in response to the catastrophic Brexit vote, where Britons crashed Google the day after the vote asking, "What is Brexit?"

Identifying themselves as led by advertising people, the coalition calls for more accountability in ads. "Our non-partisan coalition is calling on the U.K. Parliament to implement a four-point plan to improve the transparency and accuracy of discourse around our elections by reforming political advertising in the following ways:

•    Legislate so that all paid-for political adverts can be viewed by the public.
•    Give an existing body the power to regulate political advertising content or create a new one to do so.
•    Require all objective factual claims used in political adverts to be substantiated
•    Compulsory imprints or watermarks to show the origin of online adverts."

Two of these recommendations also appeared in the U.K. parliamentary committee February 2019 report: "Disinformation and 'Fake News.'" Apart from warning that the government has enough existing laws to break up Facebook if it "continues to evade editorial responsibility" for content, the committee also emphasized the imperative to maintain an informative and reliable news media.

"In a democracy,  we need to experience a plurality of voices and, critically, to have the skills, experience and knowledge to gauge the veracity of those voices," says the report. "While the internet has brought many freedoms across the world and an unprecedented ability to communicate, it also carries the insidious ability to distort, to mislead and to produce hatred and instability."

In addition to their four-point plan (above), the U.K.'s Coalition for Reform in Political Advertising offers an international plan, and a campaign pledge for candidates, in which each candidate personally affirms the four points. The website explains:

In the U.K. and several other countries, there is a convention that at election time political parties sign up to principles or a 'pledge' which they promise to abide by in the electoral process. If this precedent exists in the country you live in, and also if it doesn't yet, we think that encouraging political parties and other advertisers to adopt the practice is an important way to accelerate political advertising reform.

The pledge to stick to truth in election advertising goes like this:

 We, the <name of party>, will practice responsible election campaigning and pledge:
 •    to include information in all our digital advertising which enables voters to identify the ad as ours;
 •    to publish our digital paid-for advertising content on a publicly available webpage;
 •    to share the substantiation of any objective factual claims used in ads on a publicly available webpage or on the ad itself;
 •    to revise or suspend claims that nominated independent fact-checking services find to be misleading.

Canadian politics could also benefit from a civility pledge, as I suggested last April in this column, after Jason Kenney's platform temper tantrums led the United Conservative Party to victory in Alberta. "Civility makes it safe for us to live together," said the Calgary Interfaith Council (CIC), "and learn to celebrate our differences so that we may experience the benefits of diversity."

The CIC Civility Pledge has 10 points, including:

1. I pledge to embrace the principle that all people are created equal and that each person possesses inherent dignity and goodness.
2. I pledge to encourage genuine dialogue with people who identify as minorities in order to enhance community inclusiveness. 
5. I pledge to renounce stereotyping and prejudices, including those based on race, ethnicity, religion, sex or gender, and ability.
8. I pledge to impart my views with honesty and sincerity on the basis of mutual trust without compromising my faith or principles.

Canadian values rebelled at the implied hatred in True North's unattributed Maxime Bernier billboard. Canadian voters might well warm to candidates and parties that pledge to be upfront and truthful. If respect for truth and others' dignity get lost in the next federal election, Canada may find itself as rueful as the U.K. was after the Brexit vote.

Award-winning author and journalist Penney Kome has published six non-fiction books and hundreds of periodical articles, as well as writing a national column for 12 years and a local (Calgary) column for four years. She was editor of Straightgoods.com from 2004-2013.

Image: Peter Blanchard/Flickr

Editor's note, September 8, 2019: An earlier version of this article misstated Stéphane Perrault's title. He is chief electoral officer of Canada, not election commissioner.

Editor's note, September 10, 2019: This story has been amended to include the full title of the 2019 U.K. parliamentary report: "Disinformation and 'Fake News.'" 

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