Election Finance Regulation in Canada

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The aim of this book is to examine the consequences of regulating election campaign finances at the federal level in Canada. Such regulation usually comes in three forms: limits on election-time spending by candidates, parties, and private citizens; limits on contributions to politicians; and public funding of campaigns. Canada already has these regulations in some measure, but the debate continues on whether they need to be strengthened. This book describes the arguments in favour of regulation, and then suggests some dangers. A popular view is that spending and contribution limits, along with public subsidies, increase competition in elections and allow ordinary citizens to better participate, both as informed voters and as candidates. The author suggests that these measures may actually hinder competition, entrench incumbents, and leave the electorate poorly informed of their choices.

The intent here is not to argue against the need for election finance regulation, but to bring attention to its hidden costs and to the narrow motives behind it. Most of what is known about the effects of regulation on public welfare comes from the study of economic markets where regulation often harms those it is meant to protect. For example, competition laws that break up large enterprises keep firms at small, inefficient levels of production, and lead to higher prices. Also, the almost complete blackout on advertising in the medical profession leaves patients ignorant of their best choices, and protects doctors from the consequences of hav ing a bad record. To see if similar results carry over to election finance regulation, the author borrows the economic notion of competition and applies it to politics. The analogy is not perfect but it helps to put together a coherent view of how campaign activities enable voters and candidates to exchange ideas and why it is important that they do so. The consequences of laws that interfere with the flow of election information can then be analyzed.

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