Final Report

Report of the Special Committee on Local Elections Expense Limits

The Legislative Assembly of British Columbia

Report of the Special Committee on Local Elections Expense Limits

Special Committee on
Local Elections Expense Limits

Final Report

4th Session, 40th Parliament

June 26, 2015

Table of Contents

Composition of the Committee

Terms of Reference

Executive Summary

The Work of the Committee

Introduction

Expense Limits in Other Canadian Jurisdictions

Technical Briefings

Spending Data from the 2014 Local Elections

Public Consultation Results

Conclusions

Summary of Recommendations

Appendix A: Public Submissions

Appendix B: Information and Documents

Appendix C: Online Survey

 

June 26, 2015

To the Honourable
Legislative Assembly of the
Province of British Columbia

Honourable Members:

I have the honour to present herewith the Final Report of the Special Committee on Local Elections Expense Limits.

Respectfully submitted on behalf of the Committee,

Jackie Tegart, MLA
Chair

MEMBERS

Committee Staff
Kate Ryan-Lloyd, Deputy Clerk and Clerk of Committees
Helen Morrison, Committee Research Analyst
Alayna van Leeuwen, Committee Research Analyst

On February 24, 2015, the Legislative Assembly agreed that a Special Committee on Local Elections Expense Limits be appointed to examine, inquire into and make recommendations to the Legislative Assembly by June 26, 2015 ¹ on expense limit amounts for candidates, including, but not limited to, the general relationship between limits for the various offices, and for third party advertisers in local elections.

The Special Committee shall specifically consider spending data from the 2014 local elections and other comparative information in making the above recommendations.

The Special Committee shall undertake the above examinations with due regard for the following:

• The Report of the Local Government Elections Task Force, including principles (May 2010);
• The Expense Limits in Local Elections – Summary Report on Expense Limits Engagement (May 2014);
• The Local Elections Campaign Financing Act, 2014, including its application to elections for mayors, councillors, electoral area directors, Islands Trust trustees, parks board commissioners and boards of education trustees;
• The expense limits model approved by Government in July 2014, which is to have provincially-set limits for candidates and third party advertisers in local elections, with limits to be set using a flat-rate amount for jurisdictions under 10,000 people and a per capita formula for those over 10,000 and third party limits as a percentage of a candidate’s limit in the jurisdiction where the third party is advertising;
• The Special Committee on Local Elections Expense Limit report (December 2014); and
• The nature of local elections and the differences between local and provincial election systems.

The Special Committee shall limit its consideration of campaign finance topics to forming recommendations on expense limits for local elections.

The Special Committee shall have the powers of a Select Standing Committee and in addition is empowered to:

• Appoint of their number one or more subcommittees and to refer to such subcommittees any of the matters referred to the Committee;
• Sit during a period in which the House is adjourned, during the recess after prorogation until the next following Session and during any sitting of the House;
• Conduct consultations by any means the Committee considers appropriate;
• Adjourn from place to place as may be convenient; and
• Retain personnel as required to assist the Committee.

The Special Committee shall report to the House on the above date, or as soon as possible, and shall deposit the original of its reports with the Clerk of the Legislative Assembly during a period of adjournment and upon resumption of the sittings of the House, the Chair shall present all reports to the Legislative Assembly.

 

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¹ As agreed on May 28, 2015.

In October 2014, the Legislative Assembly appointed an all-party Special Committee on Local Elections Expense Limits with a two-part mandate: first, to examine and make recommendations on principles for local election expense limits; and, second, to examine and make recommendations by June 26, 2015 on expense limit amounts for candidates and third party advertisers. The Committee issued its first report on December 15, 2014, recommending that the principles of fairness, neutrality, transparency and accountability inform the development of legislation on expense limits for candidates, elector organizations, and third party advertisers. The Committee also recommended that third party advertising be included in an expense limits framework, with an overarching, cumulative limit as exists in provincial elections. The Committee’s report was presented to the Legislative Assembly on February 11, 2015.

The Committee was subsequently reappointed in February 2015 with new Terms of Reference focused on its examination of expense limit amounts for candidates and third party advertisers. The Committee began its work by establishing a public consultation process to secure input from British Columbians. Stakeholders and citizens were invited to provide their views through an oral presentation at a public hearing or a written submission. An online survey was developed by the Committee to facilitate participation. Invitations were sent to the Union of BC Municipalities, the BC School Trustees Association, the BC Chamber of Commerce, candidates in the 2014 local elections, public interest advocacy organizations, and individuals who are also third party advertisers.

The Committee examined how jurisdictions across Canada have approached local elections expense limits, and reviewed campaign spending during the 2014 BC local elections. Members noted that while jurisdictions across Canada have developed various approaches for local elections expense limits, their formulas allow for increased limits in more populous communities, and mayoral candidates receive a higher spending limit than council candidates. Members observed that the 2014 BC local elections data showed higher expenses for candidates in larger communities, and for leadership positions such as mayoral candidates.

Public hearings were held in Surrey, Kamloops, Vancouver, and Victoria. The Committee heard evidence from individuals, candidates, elector organizations, and other stakeholders. In total, there were 237 public hearing presentations, written submissions, and online survey responses. The public consultations provided evidence of broad support from individuals and organizations for electoral finance reform at the local level. They also provided an opportunity to engage with the public on expense limit amounts that would reflect the principles of fairness, neutrality, transparency and accountability. Overall, public input from British Columbians affirmed the need for local elections expense limits with greater levels for larger communities and for mayoral candidates.

In their presentations and submissions, stakeholders and citizens sometimes advocated other measures of campaign finance reform that were beyond the mandate of the Committee, including the need for contribution limits and changes to disclosure requirements.

Committee Members concluded their deliberations by noting that input from stakeholders and citizens was broadly consistent with the results of their review of other jurisdictions and the 2014 local elections spending data, in recognizing the need for an approach to expense limits which involved increased levels for more populous communities and higher amounts for mayoral candidates. Members agreed that the experience of other jurisdictions, the 2014 data, and public input provided evidence and support for reasonable local elections expense limits. Members affirmed that balanced and flexible expense limits would make a positive contribution to fair and accessible elections for local offices across the province.

The Committee determined that its objectives could be accomplished by an expense limits formula with flat rate amounts for mayoral candidates and candidates for all other locally elected offices in communities with a population less than 10,000, and with different per capita amounts for candidates in communities with larger populations. To this end, the Committee recommends that:

1. mayoral candidates have a higher expense limit than candidates for all other locally elected offices;
2. in jurisdictions with a population less than 10,000, mayoral candidates have an expense limit of $10,000 and candidates for all other locally elected offices have an expense limit of $5,000;
3. in jurisdictions with a population of 10,000 or more:
   1. mayoral candidates have an expense limit of:
   • $1 per capita for the first 15,000 population
   • $0.55 per capita for 15,000 to 150,000 population
   • $0.60 per capita for 150,000 to 250,000
   • $0.15 per capita thereafter
   2. candidates for all other locally elected offices have an expense limit of:
   • $0.50 per capita for the first 15,000 population
   • $0.28 per capita for 15,000 to 150,000 population
   • $0.30 per capita for 150,000 to 250,000 population
   • $0.08 per capita thereafter;
4. third party advertisers have an expense limit of 5 percent of the expense limit of a mayoral candidate in municipal elections or 5 percent of the expense limit of a candidate in those races where there is no mayoral candidate (e.g., for school trustee or regional electoral area director) and that $150,000 be an overarching, cumulative limit;
5. local elections expense limits be adjusted for inflation consistent with the approach for provincial expense limits; and
6. local elections expense limits for candidates apply to all campaign spending from January 1 of the election year to election day.
   

On October 9, 2014, the Legislative Assembly appointed the Special Committee on Local Elections Expense Limits with a two-part mandate: first, to examine and make recommendations on principles on local election expense limits; and, second, to examine and make recommendations by June 12, 2015 on expense limit amounts for candidates and third party advertisers. In its first report, the Committee recommended that fairness, neutrality, transparency and accountability be principles which may inform the development of legislation on expense limits for candidates, elector organizations, and third party advertisers. A report addressing the first part of the Committee’s mandate was issued on December 15, 2014, and subsequently presented in the Legislative Assembly on February 11, 2015.

The Special Committee on Local Elections Expense Limits was reappointed on February 24, 2015 with new Terms of Reference focused on identifying expense limit amounts for candidates and third party advertisers.

Planning, Organization, and Technical Briefings

The Committee received an initial technical briefing from an official of the Ministry of Community, Sport and Cultural Development on February 6, 2015. The Committee then met on February 26, 2015 and March 5, 2015 to plan and organize its work. The Committee received a technical briefing from officials of Elections BC on March 26, 2015. Additional materials were provided by the Ministry of Community, Sport and Cultural Development and the Ministry of Education on March 30, 2015 and April 1, 2015.
The Committee received briefings from the Union of British Columbia Municipalities (UBCM) and the BC School Trustees Association (BCSTA) on April 15, 2015.

Consultation Methods

The Committee established a range of methods to collect public input on expense limit amounts in local elections. On March 13, 2015, the Committee issued a province-wide media release announcing the opening of public consultations, including public hearings, written, audio, and video submissions, and an online survey. The Committee webpage (http://www.leg.bc.ca/cmt/leel) was updated, with information on how to participate in the public consultations. The Committee also used social media to engage British Columbians in its work.

Invitations to participate in the Committee’s public consultations were sent to stakeholders, including the BC Chamber of Commerce, candidates in the 2014 local elections, public interest advocacy organizations, and individuals who are also third party advertisers.

All Members of the Legislative Assembly were provided with information about the Committee’s consultation process in order to broaden the Committee’s invitation to interested stakeholders and citizens in Members’ constituencies. Advertisements were placed in 32 newspapers throughout the province, inviting the public to register to make a presentation, make a written submission, or respond to the online survey.

Public Hearing Presentations

Public hearings were held in Surrey, Kamloops, Vancouver, and Victoria. Presentations by way of a conference call were an available option. Other regional public hearings had been scheduled in Terrace, Fort St. John, Prince George, Cranbrook, and Penticton, but were cancelled due to a low number of registrations. Witnesses affected by the cancellations were provided a conference call opportunity. In total, the Committee heard 24 public hearing presentations, from former candidates, elector organizations, interest groups, and individual British Columbians. The names of all presenters are listed in Appendix A.

Written Submissions

The deadline for receiving written submissions was April 17, 2015. In total, 28 written submissions were received through the online submission form on the Committee’s website. The names of all individuals and organizations that made a written submission are listed in Appendix A.

Online Survey Responses

The Committee website included an online survey seeking the views of British Columbians on expense limit amounts for candidates and third party advertisers in local elections. A total of 185 responses were received to the online survey; 85 of the respondents had been a candidate for public office at one time. Of those 85 former candidates, half of them were successful. The names of the respondents are listed in Appendix A.

Meeting Schedule

The term “election expense” refers to the value of property or services used to promote a candidate or an elector organization during an election campaign. Election expenses include the cost of advertising in newspapers, on radio, and on television; printing and distributing flyers and brochures; posting signs; operating a campaign office; research and opinion polling; and campaign-related functions or events.

Limiting the amount of money that candidates, elector organizations, and third party advertisers can spend on election expenses during a campaign is often a key element in campaign finance rules. ² These rules are intended to maintain public trust and confidence in the electoral process and reinforce the principle of equality that is central to democratic government. Equality is generally seen two ways:  equality of opportunity for citizens to put themselves forward as candidates and run a viable campaign; and equality of voters whereby all voters have an equal say in the outcome of an election regardless of their socioeconomic status.

Election expense limits promote the accessibility, fairness, and competitiveness of electoral races by curbing the impact of financial resources during the campaign. By ensuring a measure of equality in the ability of citizens to become candidates and to communicate their platforms, voters have assurance that affluence is not the sole predictor of election results. Expense limits are based on the value of having a diversity of candidates running on a “level playing field” with an equitable opportunity to inform the electorate about themselves and their positions on election issues. Expense limits restrict the ability of candidates and their third party advertisers with significant resources to “drown out” the voices of other candidates with fewer resources. Election expense limits improve the quality of the democratic process by increasing voters’ opportunity to gain knowledge about the full range of candidates, thereby strengthening the ability of voters to make fully informed decisions at the ballot box come election day.

Expense limits for third party advertisers are, to a certain extent, circumscribed by the Canadian Charter of Rights and Freedoms. Third party election advertising constitutes political expression and therefore invokes the guarantee of freedom of expression under the Charter. The infringement of the right of political expression must be proportional to the objective of electoral fairness, and Canadian courts have ruled on when limits on spending by third party advertisers are proportional. ³

In its first report, the Committee recommended that fairness, neutrality, transparency and accountability be principles which may inform the development of legislation on expense limits for candidates, elector organizations, and third party advertisers. Furthermore, in relation to the principle of neutrality, the Committee concluded that elector organizations should not be allocated a separate, additional expense limit over and above that of the candidates endorsed by the elector organizations. The Committee also recommended that third party advertising be included in an expense limits framework, with an overarching, cumulative limit in addition to the limits that would apply in each jurisdiction.

In this report, the Committee has applied the principles of fairness, neutrality, transparency and accountability in its consideration of what levels of spending by candidates and third party advertisers should be permitted.

• The principle of fairness means that expense limit amounts should promote accessibility, a level playing field, and a competitive race. They should not be so low as to impede the ability of candidates to run a reasonable campaign to inform the electorate about themselves and their positions on election issues. Nor should they be so high as to allow spending to unduly influence the outcome of elections.
• The principle of neutrality means that expense limits should have a neutral effect on whether candidates choose to run as part of an elector organization or not. That is, expense limits should not create an incentive or disincentive to run with an elector organization or to run independently. Therefore, elector organizations will not have a separate limit, in addition to the limit that individual candidates have. Their expense limit is solely derived from the expense limits of the candidates they endorse.
• The principle of transparency means that how expense limit amounts are calculated should be clear and understandable by candidates, elector organizations, third party advertisers, and the public. They must be publicly available and communicated effectively.
• The principle of accountability means that each candidate and third party advertiser should be accountable for their own spending. Attribution rules, which determine on which candidate’s behalf the expense was incurred, must be fair and accurate in order to enhance compliance with, and the effectiveness of, expense limits.

The recommendations of the Committee with respect to expense limit amounts may inform proposed regulations made pursuant to the Local Elections Campaign Financing Act.

 

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² Other elements include limits on campaign contributions, public financing, financial disclosure requirements, and enforcement/compliance measures.

³ See for example, Harper v. Canada (Attorney General) 2004 SCC 33.

As part of its inquiry into appropriate expense limit amounts in local elections in BC, the Committee reviewed expense limits that exist in other jurisdictions in Canada.

Across Canada, there are various approaches to local elections expense limits. Expense limits are in place in all local governments in Ontario; local governments with populations over 5,000 in Quebec; all local governments in Manitoba; some local governments in Saskatchewan (Regina and Saskatoon); and some local governments in Newfoundland and Labrador (St. John’s).

Ontario

Ontario’s limits are established under the Municipal Elections Act, 1996 and apply to all local governments. The formula is a base amount plus a per elector amount.

• Mayor: $7,500 plus 85 cents per elector
• Council candidate and school board trustee candidate: $5,000 plus 85 cents per elector
• The limits in Toronto in 2010, for example, were $1.3 million for the mayor (elected at large) and $27,464 for council candidates in Ward 7 (one of 44 wards)
• There are no limits for third party advertisers

Quebec

Quebec’s limits are established in An Act Respecting Elections and Referendums in Municipalities and apply to all municipalities over 5,000 people. The formula is a base amount plus per elector amounts.

• Mayor: $3,780 plus 30 cents per elector up to 20,000 electors; 51 cents for each elector from 20,000 to 100,000 and 38 cents per elector for each elector over 100,000 electors
• Council candidate: $1,890 plus 30 cents per elector
• Third party advertising is tightly regulated, and it is essentially prohibited for third parties to support candidates in ways that involve expenditure of funds

Manitoba

Manitoba’s Municipal Act requires municipalities to establish expense limits under a bylaw. Winnipeg has a per elector formula.

• Mayor: 35 cents per elector
• Council candidate: 90 cents per elector in the ward

The limits in Brandon are flat-rate amounts:

• Mayor: $16,000
• Council candidate: $4,000

Third party advertising is not specifically subject to expense limits although in Winnipeg expenses incurred by any individual, corporation, organization or trade union acting on behalf of a candidate count against the candidate’s expense limit

Saskatchewan

Saskatchewan has The Local Government Election Act, which permits municipalities to adopt a bylaw establishing expense limits. Regina, for example, has set flat-rate amounts:

• Mayor: $62,635
• Council candidate: $10,439

Saskatoon has a per capita formula:

• Mayor: 75 cents per capita
• Council candidate: 10 percent of the limit of a mayoral candidate

Newfoundland and Labrador

Newfoundland and Labrador’s Municipal Elections Act permits municipalities to adopt a bylaw establishing expense limits. For example, the formula in St. John’s is a base amount plus a per voter amount:

• Mayor and council candidates: $10,000 base amount plus $1 per voter in the ward or at-large area (roughly $80,000 for mayor and $25,000 for councillor)

It should be noted that BC differs from other provinces in that municipalities are not required to maintain a voters list. Local governments have several options for conducting voter registration, including voting-day-only registration or use of provincial lists. Therefore, uniform, consistent, and centrally available lists of registered electors do not exist for all local governments in BC. For that reason, a per capita formula, rather than a per elector formula, was chosen in BC.

Ministry of Community, Sport and Cultural Development

On February 6, 2015, an official from the Ministry of Community, Sport and Cultural Development presented contextual information to the Committee regarding the establishment of local elections expense limits in BC. The Committee was informed that the Ministry is preparing new legislation that would set out a legal framework for expense limits and that the amounts would likely be established by regulation. The Ministry official also discussed the expense limits model that has been approved by government. The idea behind the model is that it balances simplicity and flexibility. Based on 2014 population estimates, approximately 65 percent of municipalities (or 103 municipalities) have populations under 10,000, and they will have flat rate limits that will not change from election to election, unless the population grows above 10,000. The larger jurisdictions will have limits that are scaled to population and adjust automatically as the population changes.

The Committee was advised that expense limits for third party advertisers are important because they prevent candidates and parties from being drowned out; they promote the integrity of the spending limit system; and they level the playing field amongst third party advertisers themselves. The Committee was reminded of the Charter implications involved, because limiting third party advertising is a limit on freedom of expression. In terms of the expense limits model, the Ministry noted that by having third party limits proportional to candidate limits, there is a logical connection to what candidates can spend. For those jurisdictions over 10,000, there is also a connection to population, which is a reasonable proxy for what it might cost a third party to actually achieve a reasonable level of expression in communities of varying sizes.

The Ministry noted that data show a number of acclamations (typically between 250 to 300), where only one candidate is nominated and therefore is elected by acclamation rather than a competitive election. In those cases, very little or no spending is likely to be reported by the candidate. In terms of analyzing campaign finance spending, the Ministry cautioned that average spending amounts can be misleading given that not all candidates seriously intend to win a seat and that factors such as the size of the race, its competitiveness, media attention, and the incumbency advantage may come into play.

The Ministry noted that, based on its past consultations, people have different views as to what the objectives or practical impacts of expense limits should be: opinions vary as to whether expense limits should roll back spending generally, cap spending at where it is now, or capture only the highest spending outliers. The Ministry noted the possible difficulties in predicting how candidates and third parties might react to expense limits, and how possible behaviors might impact the objectives of the expense limits framework. For example, the Ministry heard concerns that candidates may feel compelled to spend up to the limit to feel more secure in their competitive ability. However, based on the experience in Ontario, where limits are fairly high relative to most communities’ populations, spending does not seem to have been driven up by the existence of limits. The Ministry cautioned that overly low limits might create some incentives for people to want to work around the rules and may also have compliance and enforcement implications since there may be an increased likelihood of overspending.

The Ministry commented that there could be a gradual transition from communities with a population of 10,000 that have a flat rate to those over 10,000 with per capita limits. Also, given the diversity and the range of population sizes in BC, there could be different per capita amounts or increments for communities from 10,000 to 50,000; from 50,000 to 100,000; and so on.

Finally, the Ministry discussed issues related to the relationship between the limits for different offices. Should the limit for mayoral candidates be higher than for council candidates? Should the limits for school board trustees, Vancouver Park Board commissioners, Islands Trust trustees, and regional district electoral area directors be the same as for council candidates? What amounts are appropriate for third party advertisers in each jurisdiction, and for the overarching, cumulative limit?

Elections BC

Officials from Elections BC met with the Committee on March 26, 2015. Elections BC is responsible for administering and enforcing campaign financing and third party advertising for local elections in British Columbia. It has done this work at the provincial level since 1995. Elections BC provided some comparative information on how expense limits have been set in provincial elections. Initially, the provincial election expense limits were based on a formula that included the number of registered voters in the relevant electoral district, the size of the electoral district, and the density of the population. In 2008, the Elections Act was amended to create flat-rate expense limits, adjusted for changes to the consumer price index, for all candidates regardless of their electoral district and for all parties regardless of how many candidates they ran. For the most recent provincial general election in 2013, the expense limit for candidates during the campaign period was $73,218. Third party advertising sponsors at the provincial level are limited to $3,000 in relation to a particular electoral district and $150,000 overall, adjusted for inflation prior to each election or by-election. Elections BC’s view is that compliance with the provincial election expense limits has been high because the limits are transparent and easy to understand (they are published on the Elections BC website and Elections BC advises every candidate, political party and third-party advertising sponsor of the limits) and because the public and opposing candidates are vigilant and do not hesitate to notify Elections BC of perceived irregularities. The limits themselves appear to be aligned with the culture of campaign spending in British Columbia.

Elections BC made some preliminary observations about the information filed in the 2014 financial disclosure statements of candidates and third party advertisers in local elections. While spending by elector organizations in the Lower Mainland was significant, some candidates in Vancouver reported minimal or no expenses, presumably because their expenses were incurred and reported by their respective elector organizations. Elections BC noted the wide variance in the level of election expenses by mayoral candidates in cities such as Victoria and Prince George compared to mayoral candidates in towns such as Osoyoos, Courtenay and Mission. Sechelt was identified as an outlier in terms of higher reported spending than appeared typical for similarly-sized communities.

In the view of Elections BC, there are some things in the Local Elections Campaign Financing Act that might impair transparency and accountability. These include elector organizations incurring expenses and reporting all financial transactions on behalf of their candidates; the definition of campaign contribution, which is limited to contributions received before the close of voting on election day; challenges in establishing effective limits if candidates continue to be able to run in more than one jurisdiction at a time; incentives for elector organizations to run straw candidates; and the difficulties of determining whether issue advertising is in relation to a single electoral district. A challenge in both the provincial and local models is the broad definition of “election advertising,” which includes advertising that takes a position on an issue with which a candidate or political party or elector organization is associated. Some organizations may inadvertently conduct issue election advertising, particularly where there are many local by-elections and votes held throughout the province during the year. Organizations could find themselves subject to significant financial penalties for advertising that was completely unrelated to an election.

UBCM

The Committee met with officials from UBCM and BCSTA on April 15, 2015. UBCM represents elected officials from all municipalities and regional districts in BC. UBCM discussed its role as a co-chair and member of the 2010 Local Government Elections Task Force and its subsequent discussions with the Ministry of Community, Sport and Cultural Development regarding expense limits. It acknowledged that identifying expense limits which work for all election participants is challenging.

UBCM outlined its following key findings from data from the 2008 and 2011 elections:

1. Overall spending was low;
2. On average, mayoral candidates spent more than other candidates, and candidates for council spent more than candidates for school trustee, electoral area director or parks boards; and
3. Elector organizations were significant, but only in a handful of communities.

Other findings were that candidates that spend more money tend to get elected although this was not the case in the 2014 elections for mayor in a number of municipalities. This appears to be because competitive elections or “hot races” can drive up spending in communities of any size, creating anomalies where more is spent in one community compared to other communities of a similar size. Another trend is that there is significant self-financing in local elections.

With respect to elector organizations, spending by successful candidates and their elector organizations in 2011 in Vancouver was much higher per resident than in the next largest city, Surrey. Spending in Vancouver is uniquely high and appears to increase with each election. High spending in Vancouver has been acknowledged repeatedly by its council as an issue that needs to be addressed, and, in 2013, UBCM endorsed a resolution from the City of Vancouver requesting that the Vancouver Charter be amended to allow Vancouver to make rules that place greater limits on campaign spending and contributions and provide for greater disclosures. The membership of UBCM has recognized the challenges facing Vancouver and the need to level the playing field and increase accessibility by tackling the problem at the expense and contribution levels.

The following elements of an expense formula have been discussed by UBCM:

• Expenses need to be formula based;
• Expenses should have a common starting point, e.g., a base amount;
• Expenses should add graduated per capita amounts to reflect population diversity;
• Expenses should provide higher expense limits for mayoral candidates; and
• Expenses should be adjusted over time to account for inflation.

UBCM advised that the Ministry had modeled various scenarios incorporating these elements, working under the assumption that spending is low for the most part, with the formula intended to address anomalies.

In the case of elector organizations, the basic principle is that expense limits should not present a financial incentive to be part of an elector organization. With respect to third party advertising, UBCM raised the issue of cross-jurisdictional advertising arising when the same ad is placed in multiple communities, and candidates in each of the communities may have different expense limits (e.g., for communities with different populations).

BCSTA

In its presentation on April 15, 2015, BCSTA described the range and diversity of school districts – from Surrey with a population of about 550,000 to Stikine with a population of about 1,600 and a geographic area of about 10 percent of the province. There is also the Conseil scolaire francophone, which has seven wards that cover the entire province. School District No. 58 (Nicola-Similkameen) includes two regional districts, two municipalities, and five First Nations communities.

BCSTA advised that it had surveyed all of its members, who are trustees elected to boards of education for each school district. Members felt spending by school trustee candidates in the last local elections was appropriate and reasonable. They were not concerned about the level of spending in their elections. In BCSTA’s assessment, the data indicates that individual candidates are not excessively spending more than others – there were perhaps only three outliers. Trustees from districts under 10,000 in population said a ceiling of $5,000 would be more than adequate. The majority of candidates spent less than $2,500. Trustees supported an automatic adjustment in expense limits based on the consumer price index.

There was not as much consensus among trustees for communities over 10,000. Reasons for that include the fact that the Greater Vancouver region tends to have elector organizations endorsing trustee candidates, whereas rural areas do not. There was some concern about how to determine the level of spending by an elector organization for a school trustee candidate.

Most trustees felt that what they had seen in their communities of third party spending had been appropriate, and that it could be capped at current levels. It was not seen as a significant issue outside the Lower Mainland.

The Committee’s Terms of Reference direct the Committee to specifically consider spending data from the 2014 local elections and other comparative information. Following local elections in BC in November 2014, campaign finance disclosure statements were collected by Elections BC under its new responsibility to administer disclosure requirements under the Local Elections Campaign Financing Act. Because the Act has only been in place since May 2014, this is the first time that complete campaign finance disclosure information from local elections in BC was publicly available through a single source.

In February 2015, Elections BC posted the financial disclosure statements of candidates, elector organizations, and third party advertisers from the 2014 local elections on its website.  At the Committee’s request, Elections BC arranged to have the expenditure data compiled into a single file.  Concurrent with the release of this report, the data has been posted to the Committee’s website.

To provide some context for the Committee’s recommended expense limits, the following tables summarize some findings from 2014 local elections spending.

• For candidates endorsed by elector organizations, the organization’s disclosed spending has been divided evenly by the number of candidates endorsed, and added to any spending reported individually by each endorsed candidate.
• Some elector organizations did most or all of the spending on behalf of organizations; some elector organizations did very little or no spending on behalf of endorsed candidates, and in other cases, endorsed candidates and elector organizations both engaged in spending. The approach of attributing elector organization spending to endorsed candidates may not accurately reflect how much elector organizations spent on particular candidates; however, it is the simplest way to ensure that elector organization spending is factored into considering how much was spent to the benefit of candidates. Comparing elector organization spending as a separate category can be useful, though such an approach needs to be done with consideration for the number of candidates endorsed, and would exclude spending by individual endorsed candidates from the analysis.
• Another methodological note is that school trustee expenses figures are calculated based on the population of entire school districts. However, only 16 of BC’s 60 school districts run their elections with the district as a single Trustee Electoral Area (at large, essentially). The remainder are divided into anywhere from two to seven Trustee Electoral Areas, for which population data could not be readily found and integrated into the analysis. Trustee candidate spending was generally quite low.  Of 797 trustee candidates, only 93 spent more than $5,000, regardless of whether they ran at large, or in a Trustee Electoral Area that was less than the size of the whole district (i.e., did not run at large). Thirty-eight trustee candidates spent more than $10,000, and those 38 were in New Westminster, Maple Ridge-Mission, Central Okanagan, Coquitlam, North Vancouver, Greater Victoria, Richmond, Burnaby, Surrey and Vancouver school districts (i.e., generally urbanized districts).

Summary data on candidates in jurisdictions of less than 10,000 population

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⁴ “Other” includes special purpose local bodies such as Sechelt Indian Government District’s Advisory Council, water councillors, etc.

⁵ Excluding elector organization candidates who reported spending nothing.

Table of summary data on candidates in jurisdictions of over 10,000 population

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⁶ 3 Electoral Areas in 3 regional districts; 1 Local Trust Area

⁷ An acclamation in one of Lake Country’s wards

⁸ Excluding elector organization candidates who reported spending nothing.

The Committee’s public consultation process during Spring 2015 focused on seeking views on expense limit amounts for candidates and third party advertisers. Many participants in the public consultation process raised other issues outside the mandate of this Committee, including contribution limits and potential conflicts of interest (some advocating a ban on corporate and union donations), the institution of a ward system, disclosure requirements, and the role of Elections BC. However, the Committee recognized that these other local elections issues are beyond its mandate. (The Committee’s Terms of Reference explicitly limit the Committee’s consideration of campaign finance topics to forming recommendations on expense limits for local elections.) The Committee, therefore, makes no recommendations with respect to contribution limits or other matters pertaining to local elections not related to expense limits.

Public Hearing Presentations

Of the 24 presentations made to the Committee, one-half were from former candidates for public office. Seven of the presenters were from outside the Lower Mainland.

All presentations supported the need for local elections expense limits, and individual presenters variously affirmed the establishment of limits that would reflect community size, including a flat-rate amount for small communities, and a per capita formula for larger communities. While there was no consensus as to what the expense limit amounts should be, the extent of support for key elements of an expense limits framework provides a useful context for the development of specific expense limit amounts.

Surrey First Electors Society cautioned against setting expense limits too low because modern-day elections are expensive affairs that provide an opportunity to communicate important ideas to the public and they should not be handicapped to the lowest common denominator.

Expense limits for candidates

Only a few presenters at the Committee’s public hearings put forward a specific flat rate amount for expense limits. One of them, Helen Hee Soon Chang, a school trustee in Burnaby, proposed a $20,000 cap on expense limits for mayor, councillor, and school trustee. Another, the Marine Garden Residents’ Association from Vancouver, advocated the strictest possible limits on electoral campaign financing and also suggested a limit of $20,000.

A number of presenters proposed specific amounts in a per capita formula. Kerry Morris, a mayoral candidate in North Vancouver, and Ben Isitt, a Victoria councillor, proposed 50 cents per eligible voter for councillor and $1 for mayor.

The Cranbrook Chamber of Commerce proposed a spending limit in the range of $1.50 per registered voter for larger communities and $1 for smaller communities.

Neighbourhoods for a Sustainable Vancouver, an elector organization in 2011 but not in 2014, suggested that the Committee consider how much money is actually required to run an effective campaign. In their view, $104,000 – or 25 cents per voter – is sufficient for an effective campaign.

The Green Party of Vancouver advised that it had adopted its own voluntary spending and donation limits on April 1, 2014 in the hope it would inspire other parties to follow their example. They chose an expense limit of 65 cents per registered voter and a candidate could spend an additional 15 cents per voter (total limits of $273,000 and $63,000 respectively). The Green Party indicated that it had set the bar high so that other parties would see it as a reasonable limit, but that it would support even lower limits. It saw 25 to 50 cents per registered voter as a reasonable figure. In its view, a total amount of spending of $100,000 is enough to run a good democratic campaign in Vancouver. The Green Party suggested that a differential rate for mayor, councillor, and school trustee should be considered.

The Upper Kitsilano Residents Association from Vancouver suggested that spending limits should be based on 25 cents per eligible voter and recommended restrictions that would prevent elector organizations from spending the entire expense limit on one candidate.

A number of presenters, including the Cranbrook Chamber of Commerce and IntegrityBC, suggested that the Committee consider precedents elsewhere, including those in Quebec. Matthew Hartney contrasted spending in Burnaby with Saskatoon, where there is a limit of 75 cents per capita for a mayoral candidate.

Written Submissions

Fifteen of the twenty-eight submissions received by the Committee were from the Lower Mainland. Again, there was significant support for expense limits and amounts based on community size, although some cautioned against setting them too low. There was also a proposal from Cairine Green from Victoria for a different model whereby expense limits could be a percentage of the stipend for each elected position.  Eight written submissions focused on contribution limits.

In its submission, the BC Division of the Canadian Union of Public Employees (CUPE BC) encapsulated the considerations at issue in setting expense limit amounts.

It is important that spending limits are not set so low as to further starve democracy. Vibrant local campaigns are necessary to increasing voter participation. Spending limits must be generous enough to allow candidates to engage voters across their community with a layered campaign using a variety of communications methods. They must also be sufficient for new candidates to establish enough of a profile to allow them to compete with long-time incumbents who are often seen to hold an advantage.

At the same time, spending limits must not be so high that they create a moneyed campaign environment that serves as a barrier for an average citizen to seek election.

Caroline Loesgen from Kelowna asked the Committee to make it a reasonable, low limit. As she said: “May the best candidates speak the best and deliver the best message. This costs very little.”

Expense limits for candidates

A number of written submissions proposed flat-rate amounts. Sharon Shepherd from Kelowna, a former candidate for mayor and councillor, noted that more and more money is being spent on campaigns and that expense limits are needed to provide opportunity and a level playing field for all candidates. She suggested that limits in Ontario were a fair approach to local elections.

Marsha Henderson from Victoria, a former candidate, believed that $5,000 should be an acceptable limit for expenses for a municipal election in an area of 80,000 to 100,000 voters. She also suggested that municipalities should pay for the cost of one brochure of candidate information, since mailing costs are often the largest portion of a campaign expense.

Kristian von Schalburg from Richmond suggested an expense cap of $20,000 for a council seat and $40,000 for mayor. In his view, it is much healthier for democracy if more candidates are willing to compete for council and mayoral positions.

CUPE BC discussed the need for a common base amount for all candidates in all communities because of the basic costs involved in a campaign such as photography, web design and hosting, printing, postage and advertising. In its view, a fulsome campaign would not cost less than $5,000 in any but the smallest of communities. CUPE BC suggested that the amount for mayoral candidates should be greater than for other offices but that the amounts for councillor and school trustee should be the same.

Several written submissions proposed a per capita approach.  The Grandview-Woodland Area Council of Vancouver stated that the limit that exists in Montreal is a reasonable example of a campaign expense limit but only if it is coupled with stringent campaign contribution limits. Without them, the limits on campaign expenses are arguably still too high and should be in the range of 75 cents to $1 per voter.

Randal Helten from Vancouver said that there should be strict limits on election spending in the order of 25 cents to 50 cents per registered voter.

CUPE BC agreed with an additional per capita amount in communities with populations of over 10,000 but stated that consideration should also be given to the geographic size of the electoral area when establishing limits for regional district director and school trustee candidates running in electoral areas. It recommended a mechanism to adjust the amount for inflation before each general election.

Expense limits for third party advertisers

Written submissions put forward suggestions for third party advertisers.  Erin Lumley from Victoria agreed with expense limits for candidates but was concerned that limits on third party spending may cut down on what information is accessible to the public. She felt that voter apathy needs to be addressed by government and that the impact of limits on non-partisan advertising and/or information dissemination should be considered.

CUPE BC advised that it is a third party advertiser and encouraged the Committee to review the data on third party spending in the 2014 local elections. Although it noted that with very few exceptions, spending in 2014 was minimal, it highlighted one example of excessive spending that should be constrained where one third party sponsor spent more than $18,000 in a community where the two candidates in a hotly contested mayoral race each spent less than $12,000. CUPE BC stated that third party advertisers should be able to spend enough to participate in an election campaign in a meaningful way and proposed that the third party limit should be set at 30 percent of an individual council or trustee candidate limit in the same jurisdiction.

Online Survey Results

The responses to the Committee website’s online survey on expense limit amounts for candidates and third party advertisers indicated strong support for expense limits in larger communities. Forty-five percent of the respondents are from the Lower Mainland.

The responses to the ten questions in the online survey are summarized below and reported in full in Appendix C.

Expense limits for candidates

The online survey results indicated that 67 percent of respondents felt that the average amount of campaign spending by candidates in their community during the 2014 local elections was too high. Those respondents were divided, however, as to whether campaign spending should be rolled back or capped at the average amount. There was also some support for other options such as a cap of 90 percent of 2014 spending levels or a cap of another flat-rate or per capita amount.

Almost all respondents thought expense limits should reduce spending by candidates who spend much more than other candidates in the same community.

For communities with populations over 10,000, most respondents preferred that in addition to the flat-rate amount, there should be more than one per capita amount. There was some support, however, for a single per capita amount for all communities. A few indicated other options, including a flat-rate amount only.

About 62 percent of respondents thought the flat-rate amount in a community with a population under 10,000 should be up to $5,000. There was some support for a limit between $5,000 and $10,000. Only three respondents thought the limit should be over $10,000.

Forty-nine percent of respondents thought the per capita amount in a community with a population over 10,000, should be up to 50 cents, in addition to the flat-rate amount. Twenty-four percent supported a per capita amount of 50 cents to $1. Only six respondents thought it should be over $1.

Most respondents thought expense limits should increase automatically by some form of inflation index. Of those who didn’t think there should be an automatic increase, many supported a periodic review.

Over 90 percent of respondents thought expense limits should apply to different local government positions, including mayor, councillor, school board trustee, regional district electoral area director, Vancouver Park Board commissioner and Islands Trust trustee. Many respondents said that mayoral candidates should have a higher expense limit.

Expense limits for third party advertisers

Sixty percent of the online survey respondents felt that campaign spending by third party advertisers in their community was too high. Only three respondents thought it was too low. Of those that thought it was too high, most thought it should be rolled back although there was some support for capping it at the community average amount or some other amount.

Roughly 42 percent of respondents thought that third party advertisers should be permitted to spend less than 5 percent of a candidate’s limit. Approximately 30 percent of respondents thought that the limit should be from 5 percent to 10 percent.

Many respondents provided additional comments to the Committee that reflected the importance of a principled approach to expense limits and the need to achieve balance in terms of setting “high” or “low” limits. For example, one respondent said that “We need to elect people based on their wisdom, experience, and involvement in their communities, not their (or their friends’) bank accounts.” Another said that, “I think to be fair to everyone across the socioeconomic spectrum, we should make elected office more accessible by setting reasonable limits.”

A number of respondents stressed the importance of not making the expense limits too low because of the value of campaign spending in engaging voters and increasing voter participation. Bryan Crockett from Victoria expressed this concern as follows:

Engaging voters is expensive. In the interest of democracy, there should indeed be limits. But those limits should not be arbitrarily low. Candidates should not be prohibited from say, hiring a couple of canvassers, and a campaign manager, and paying those individuals wages they actually deserve. If the spending limit is too low, and candidates are unable to do this spending, voters might not have the chance to be engaged by a candidate.

The Committee expressed its appreciation for the many public submissions it received during its Spring 2015 consultations. The evidence from individual British Columbians, candidates, elector organizations, and other stakeholders provided important input into the Committee’s deliberations on expense limit amounts for local elections. Members also benefited from the expertise and perspectives of Elections BC, UBCM and BCSTA and were grateful for the assistance provided to the Committee by officials from the Ministry of Community, Sport and Cultural Development.

Committee Members noted that jurisdictions across Canada have developed various approaches for local elections expense limits. That said, the overall experience of other jurisdictions supports an approach of increasing expense limits for local elections in larger urban areas, and for higher expense limits for mayoral candidates.

In reviewing the spending data from the 2014 local elections, Committee Members found that the data supported the overall key features of local elections expense limits in other jurisdictions, namely, higher limits for larger communities, and for mayoral candidates. Members agreed that the experience of other jurisdictions, the 2014 data, and public input from stakeholders and citizens provided broad evidence and support for a reasonable and flexible approach for local elections expense limits. Members affirmed that balanced expense limits would make a positive contribution to fair and accessible elections for local offices across the province.

Members observed that the level of spending in British Columbia is generally reasonable, although there were notable exceptions where candidates spent much more than others in their community, and more than others in communities of a similar size. On the whole, however, Committee Members concluded that only anomalous amounts of spending by outliers needed to be rolled back. This is in accord with the working assumption of UBCM. Almost all respondents to the online survey indicated that expense limits should reduce spending by candidates who spend much more than other candidates in the same community. The Committee emphasized that a reduction of excessive spending would promote accessibility and fairness in local elections and is in the public interest.

Committee Members shared the views expressed by many participants in the public consultation process that expense limit amounts should not be too low because campaign spending performs a valuable function in our communities. Among other things, campaign spending promotes civic engagement and voter participation and educates voters about local issues. The Committee recognized that appropriate campaign spending can strengthen a democratic system of government, and appreciated the need to set reasonable, rather than low, limits in order to preserve that important function and enable candidates to run a good, informative campaign.

At the same time, the Committee emphasized the importance of the principle of accessibility and the need to ensure that the limits were not so high as to discourage potential candidates from running. The Committee was very aware of the need to achieve the right balance so that limits supported both viable campaigns and an accessible process.

Relationships between limits for different offices

The level of spending by mayoral candidates tends to be much higher than spending by council candidates. In fact, the 2014 spending data indicates that overall, election expenses of mayoral candidates were somewhere around double that of council candidates. This is probably because the office of mayor has a significant profile, given the mayor’s responsibility for providing leadership on council. Moreover, mayoral races, more than council races, can become very competitive, given the race for a single leadership position.

In terms of the relationship between limits for different offices, many participants in the public consultation process thought that mayoral candidates should have a higher expense limit than other candidates. Kerry Morris, Ben Isitt, and CUPE BC, among others, explicitly stated that the amount for mayoral candidates should be greater than for other offices. Many respondents to the online survey made comments to that effect. The Green Party of Vancouver and Dermod Travis of Integrity BC indicated support for a differential rate for mayor, councillor and school trustee. Recommendations that the Committee consider models in other jurisdictions (such as Ontario and Quebec) also pointed to a higher expense limit for mayoral candidates. UBCM indicated that higher expense limits for mayoral candidates are an element of an expense formula that it has discussed.

The Committee was in favour of having higher expense limits for mayoral candidates than for other candidates in local elections. This is the case in all other provinces that have expense limits.

Committee Members affirmed that councillors, electoral area directors, school trustees, Islands Trust trustees, and Vancouver Park Board commissioners should be treated the same under the expense limits approach. It is not necessary to differentiate between them because all the positions are of equal value as elected positions. Consistent limits are administratively easier and simpler for the electorate to understand than different limits for each type of office. While the Committee would not want prospective candidates to think that they need to spend to the limit, or spend more than they have in past years in order to compete, the Committee thought that recognizing the equal importance of all local elected offices was more important than setting low limits for these generally low-spending elections. The Committee’s goal was to reduce spending by outliers and not necessarily cap spending at current levels if the current level was so low as to be not problematic from the perspective of accessibility of the process.

Expense limits for candidates

Jurisdictions with a population of less than 10,000

Mayoral candidates

In reviewing the 2014 spending data in jurisdictions with a population of less than 10,000, the Committee noted that only a very small proportion of mayoral candidates spent more than $10,000. As the table of summary data on page 16 indicates, the range for mayoral candidates included 47 candidates who reported spending $0; 203 who reported spending between $0 and $5,000; 21 who reported spending between $5,000 and $10,000; and nine, or approximately 4 percent of the 225 total mayoral candidates, who reported spending more than $10,000.

The Committee considered that $10,000 is a reasonable expense limit for mayoral candidates in communities with a population of less than 10,000. Many candidates in smaller communities are self-financed and the expense limit needs to reflect the principle of fairness and accessibility.

The likely impact of a ceiling of $10,000 would be a reduction in spending by a very small number of potential outliers who spent as much as $35,065.97. Based on reported spending from the 2014 elections, had the Committee’s recommended limit of $10,000 for mayoral candidates been in place in 2014, about 4 percent of mayoral candidates would have spent more than the limit.

The Committee believes that spending over $10,000 is an excessive amount and should be reduced. As stated previously, almost all respondents to the online survey indicated that they thought excessive amounts of spending should be reduced.

Candidates for all other locally elected offices

The 2014 spending data presented on page 16 shows that an extremely small number of the 806 council candidates in 102 jurisdictions under 10,000 population spent over $5,000. The spending range included 263 council candidates who recorded spending $0; 535 who reported spending between $0 and $5,000; seven who reported spending between $5,000 and $10,000; and one who reported spending more than $10,000. Only eight council candidates, or just under 1 percent of the total council candidates in jurisdictions under 10,000, spent in excess of $5,000 in 2014.

The range in spending by the 64 school trustee candidates in districts with a total population of less than 10,000 in 2014 was $0 to $3,000. The average amount of spending by school trustee candidates was $821.71 (with candidates who reported spending $0 removed).

The average amount of spending in 2014 by regional electoral area directors was $1,463.67 (with candidates who reported spending $0 removed). The average amount of spending by Islands Trust trustee candidates in 2014 was $989.33.

Sixty-two percent of respondents to the online survey supported an expense limit of up to $5,000 in a community with a population under 10,000. An expense limit of half of the expense limit for a mayoral candidate was proposed during the public consultation process by former candidates Kerry Morris and Ben Isitt.

An expense limit of $5,000 would reduce excessive spending by outliers in races for councillors, regional district electoral area directors, and Islands Trust trustees throughout the province. Based on reported spending from the 2014 elections, just under 1 percent of council candidates and 2 percent of electoral area director candidates would have spent over a $5,000 expense limit. In school districts with a total population of less than 10,000, no candidate spent more than $5,000.

The proposed $5,000 limit would reinforce the principle of accessibility. Members thought that a limit of $5,000 would send an important signal to the citizens of British Columbia about the accessibility of the electoral process. While it is true that many candidates in jurisdictions of less than 10,000 people do get elected while spending much less than $5,000, a limit of $5,000 would provide predictability and certainty to any candidates who are concerned about the possibility of a council race becoming too expensive to compete effectively. The hope is that more citizens may be encouraged to run for office in a local government election because they would see it as an affordable proposition.

Jurisdictions with a population of 10,000 or more

A significant challenge in setting expense limit amounts in local elections in BC is the diversity in the size of jurisdictions around the province. Municipalities range from as few as 180 people to more than 600,000 people. Setting the limits for jurisdictions under 10,000 (the majority of jurisdictions in BC) as a simple flat rate amount mitigates some of the complexity in designing limits for diverse populations. However, setting limits that are fair across a spectrum of 10,000 plus to more than 600,000 people requires a more nuanced approach.

Some provinces and cities elsewhere in Canada have set expense limits in local elections using a simple formula of a base amount plus a single per capita amount. For example, Ontario’s limits are $7,500 plus $0.85 per capita for mayoral candidates and $5,000 plus $0.85 per capita for council and school trustee candidates. However, it is important to note that Ontario municipalities are divided into wards for the purposes of council candidate elections while mayoral candidates run at-large. If Ontario’s limits were applied to local elections in BC, a council candidate in Vancouver could spend $549,398.65; an elector organization that endorsed a full complement of candidates for mayor, council and parks board could spend more than $9 million – much more than is presently being spent in Vancouver.

An approach using the flat rate limits for jurisdictions 10,000 people as a “base” – $10,000 for mayoral candidates and $5,000 for council candidates – plus a smaller per capita amount such as $0.50 or $0.60, results in limits that might be reasonable in many of BC’s communities, but would still generate very high limits in larger jurisdictions.

An additional consideration for the Committee was ensuring the approach worked given its Terms of Reference, which directed that jurisdictions under 10,000 people would have a flat-rate amount and those over 10,000 would have formula-based limits. There are a number of jurisdictions in BC with populations in the 9,000 to 11,000 range. The Committee did not want the limit generated by the formula to be significantly or arbitrarily higher in Whistler (population 10,447), compared to Quesnel (population 9,806) which would have a simple flat-rate limit. Avoiding such a result was a factor in selecting the per capita amounts that would apply to jurisdictions with populations just over 10,000 people.

The Committee’s goal was to develop a per capita formula that would (a) work for BC’s large population spectrum, and (b) result in expense limit amounts that would allow reasonable campaigns, yet have an impact on excessive spending by outliers. Candidates outspending their competitors significantly, and communities where spending tends to be higher than in similarly sized jurisdictions, would be affected by the recommended formula. The Committee also wanted to ensure that its recommended per capita formula for jurisdictions over 10,000 people would result in a fair transition in the limits allowed for jurisdictions under 10,000 people and for jurisdictions just over 10,000 people.

The Committee concluded that these objectives could be accomplished by an expense limits formula with flat rate amounts for mayoral candidates and candidates for all other locally elected offices in communities with a population less than 10,000, and with increasing per capita amounts for candidates in communities with larger populations.

Mayoral candidates

The Committee reviewed an extensive data analysis of 2014 spending data and considered several options for per capita formulas. Ultimately, the Committee chose the following option because of how it would apply across the population spectrum, how it would impact outliers, and how it worked at transition points. The formula works by assigning per capita amounts for four different population increments, or “steps.” These amounts are incremental, or cumulative.

Expense limits formula for mayoral candidates

The following illustration provides examples of how the formula for mayoral candidates would be applied in communities of different sizes.

Illustration of expense limits formula

Candidates for all other locally elected offices

Consistent with the proportionate amount recommended by the Committee for populations under 10,000, the Committee considered that expense limits for council candidates and candidates for other locally elected offices in jurisdictions of 10,000 or more should be half of that for mayoral candidates. Rounding up to the nearest whole number, this means that expense limits for candidates for all other locally elected offices would be as follows:

Expense limits formula for candidates for all other locally elected offices

To further illustrate how the formula would apply in communities of different sizes, the following examples show how expense limit amounts would be calculated in communities in each of the four population increments:

Comox – population 13,862

Mayor:  13,862*$1 = $13,862

Council:  13,862*$0.50 = $6,931

Kamloops – population 89,417

Mayor:  (15,000*$1) + (89,417– 15,000)*$0.55 = $55,929.35

Council:  (15,000 X $0.50) + (89,417– 15,000)*$0.28 = $28,336.76

Burnaby– population 233,734

Mayor:  (15,000*$1) + (135,000*$0.55) + (233,734-150,000)*$0.60 = $139,490.40

Council:  (15,000*$0.50) + (135,000*$0.28) + (233,734-150,000)*$0.30 = $70,420.20

Surrey– population 513,322

Mayor:  (15,000*$1) + (135,000*$0.55) + (100,000*$0.60) + (513,322-250,000)*$0.15 = $188,748.30

Council:  (15,000*$0.50) + (135,000*$0.28) + (100,000*$0.30) + (513,322-250,000)*$0.08 = $96,365.76

The following table illustrates what the impact of this formula would have been in relation to mayoral and council candidates ⁹ if it had been in place in the 2014 local elections.

Impacts of expense limits had they been in place in 2014

The Committee considered that it was appropriate and in the public interest for campaign spending over the proposed limit to be reduced to reflect principles of fairness and accessibility.

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⁹ In general, it did not appear that any candidates for school trustee would have exceeded the Committee’s recommended limit; similarly, no candidates for electoral area director in the small number of electoral areas with more than 10,000 in population would have exceeded the limit generated by the formula.

 

Elector organization advantage

The Committee considered whether, in order for expense limits to reflect the principle of neutrality that it recommended in its first report, independent candidates should have a different expense limit amount. In some jurisdictions, especially where elector organizations are prevalent, it is very difficult for candidates to run independently (i.e. without the endorsement of an elector organization). This “elector organization advantage” is the result of the pooling of resources and economies of scale which are achieved by candidates running together as a slate. It can be seen primarily in larger jurisdictions such as Vancouver and Surrey.

In his presentation to the Committee, Don Pitcairn noted that independent candidates are at a serious disadvantage and recommended that a candidate who belongs to a slate should have a lower level of spending than a candidate who is running as an independent. Both the Cedar Party and the Green Party of Vancouver stated that independent candidates should have a greater expense limit at a public hearing during the first phase of the Committee’s mandate.

During their deliberations, Committee Members discussed the fact that the process for creating an elector organization is a straightforward one and that there are few barriers to forming an elector organization at any time. Any interested candidates are free to pursue forming an elector organization, if desired.

Committee Members also expressed concern that there may be possible issues under the Canadian Charter of Rights and Freedoms that could arise in the event of different rules for independent and endorsed candidates.
The Committee concluded that the rules for local elections should be consistent with the rules for provincial elections whereby, in relation to expense limits, independent candidates and candidates who are members of political parties are treated the same. 

Expense limits for third party advertisers

The 2014 spending data indicates that spending by third party advertisers in British Columbia is not a significant concern. Ninety-one third party advertisers reported spending less than $5000.  Eighty-seven reported spending more than $500, with a range of anywhere from $513 to $111,734. The highest spending third party aside, the average of third parties spending more than $500 was $5,900. Committee Members supported having expense limits that apply to third party advertisers so to prevent their voices from drowning out the voices of the candidates themselves in future local elections.

The Committee was of the view that expense limits for third party advertisers should be a percentage of the expense limit for mayoral candidates. For jurisdictions with no mayoral candidate (e.g., regional district electoral area, school trustee), the third party limit would be a portion of the candidate’s limit in the race in which the third party is advertising.

The Committee concluded that 5 percent was a reasonable expense limit amount for third party advertisers. It would permit third parties to effectively communicate their views on elections issues to the electorate but not in such a way that the voices of candidates could not also be heard.

Additionally, as the Committee recommended in its first phase that there be an overarching, cumulative limit such as exists in provincial elections, the Committee considered that the limit should be the same amount as exists in provincial elections -- $150,000. Consistency with provincial election rules makes sense in this context.  An overarching, cumulative limit means that total spending by a third party in multiple jurisdictions or province-wide could not exceed $150,000.  Again, that amount would likely provide ample freedom of expression for third parties, yet also act as a safeguard against significant influence over BC’s local elections by a third party. The Committee noted that no third party spent over $150,000 in local elections in BC in 2014.

Other considerations

Adjustment for inflation

The Committee discussed the need for expense limits to be adjusted over time to take into account the rate of inflation.  As previously noted, most respondents to the online survey thought expense limit should increase automatically by some form of inflation index.  Of those who didn’t think there should be an automatic increase many supported a periodic review.

The Committee endorsed the provincial approach in this regard and recommended that local elections expense limits be adjusted for inflation consistent with provincial election expense limits.

Election proceedings period

The Committee received notice from government late in the process of its work of a proposed change to the local elections campaign period from 46 days to 28 days. Committee Members expressed concern that the 2014 expenditure data included all spending from January 1 until election day and therefore the Committee’s recommendations were based on an analysis of a longer campaign period. One concern is that candidates may make purchases of election materials such as flyers or advertising materials and use these materials before a 28 day period, and not have this captured as an expense.

Committee Members agreed that in order for expense limits to be effective, they must apply to all campaign spending.  They concluded that the local elections expense limits recommended by the Committee for elector organizations and candidates should apply from January 1 of the election year to election day. 

Conseil scolaire francophone

The Committee noted that a different approach for the Conseil scolaire francophone may be needed and should be considered by government. This could involve, for example, setting limits amounts that are the same as for any other trustee candidate, but perhaps based on the number of electors eligible to vote in a Conseil scolaire francophone election. Spending was very low in this special school district, with most candidates spending nothing and the highest spending candidate spending $354. As such, the Committee did not note a particular urgency around regulating Conseil scolaire francophone election spending.

Transparency

The Committee felt very strongly that steps must be taken to ensure that its proposals for expense limit amounts reflect the principle of transparency that it recommended in its first report. In order to achieve this, clear and understandable statements of expense limit amounts for every jurisdiction in the province, that show how they are calculated, should be made publicly available and communicated effectively to potential candidates and to the public in a timely manner. This could be the responsibility of Elections BC, or the Ministry of Community, Sport and Cultural Development, possibly with a role for local elections administrators in notifying candidates of their limits in conjunction with legally required published public notices regarding the elections.

The Special Committee on Local Elections Expense Limits recommends to the Legislative Assembly that:

1. mayoral candidates have a higher expense limit than candidates for all other locally elected offices;
2. in jurisdictions with a population less than10,000, mayoral candidates have an expense limit of $10,000 and candidates for all other locally elected offices have an expense limit of $5,000;
3. in jurisdictions with a population of 10,000 or more:
   1. mayoral candidates have an expense limit of:
   • $1 per capita for the first 15,000 population
   • $0.55 per capita for 15,000 to 150,000 population
   • $0.60 per capita for 150,000 to 250,000
   • $0.15 per capita thereafter
   2. candidates for all other local government offices have an expense limit of:
   • $0.50 per capita for the first 15,000 population
   • $0.28 per capita for 15,000 to 150,000 population
   • $0.30 per capita for 150,000 to 250,000
   • $0.08 per capita thereafter;
4. third party advertisers have an expense limit of 5 percent of the expense limit of a mayoral candidate in municipal elections or 5 percent of the expense limit of a candidate in those races where there is no mayoral candidate (e.g., for school trustee or regional electoral area director) and that $150,000 be an overarching, cumulative limit;
5. local elections expense limits be adjusted for inflation consistent with the approach for provincial election expense limits; and
6. local elections expense limits for candidates apply to all campaign spending from January 1 of the election year to election day.

Public Hearing Witnesses

The following information and documents are available on the Legislative Assembly website at: www.leg.bc.ca/cmt/leel

Friday, February 6, 2015 Meeting Document

• Presentation: Technical Briefing – Expense Limits in BC Local Elections; Ministry of Community, Sport and Cultural Development

Wednesday, April 15, 2015 Meeting Document

• Presentation to Special Committee on Local Elections Expense Limits; UBCM

Legislation

• Local Elections Campaign Financing Act [SBC 2014] Chapter 18

Related Resources

• Local Government Elections Task Force Report (May 2010)
• White Paper on Local Government Elections Reform (Fall 2013)
• Expense Limits in Local Elections – Summary Report on Expense Limits Engagement (May 2014)
• Elections BC: Local Elections Campaign Financing in BC
• First report of the Special Committee on Local Elections Expense Limits (December 2014)
• Elections BC: 2014 Local Elections Campaign Expenditure Information (June 2015)

Expense Limits for Candidates

1. Based on your knowledge of campaign spending by candidates in your community during the 2014 local elections, do you feel the average amount of campaign spending by candidates was:

Too low	4
Acceptable	58
Too high	124

If too high, do you think campaign spending in your community should be:

Rolled back	63
Capped at the community average amount of 2014 local elections campaign spending	41
Other (please specify)	34 (e.g., capped at a reasonable limit or an amount tied to population)

2. Should expense limits reduce spending by candidates who spend much more than other candidates in the same community?

Yes	176
No	14

3. For communities with populations over 10,000, would you prefer that, in addition to the flat rate amount, there should be:

A single per capita amount for all communities	72
More than one per capita amount (For example, different per capita amounts for communities with populations from 10,001 to 59,999; 60,000 to 100,000, and over 100,000.)	96
Other (please specify)	18 (e.g., a flat rate amount only or no limits)

4. What do you think the flat-rate amount should be in a community with a population under 10,000?

Up to $5000	115
$5001 to $10,000	41
Over $10,000	3
Other (please specify):	26 (e.g. no limits necessary or $2000)

5. In addition to the flat rate amount, what should the per capita amount be in a community with a population over 10,000?

Up to 50 cents	90
50 cents to $1	44
Over $1	6
Other (please specify):	37 (e.g., flat rate only, 25 cents per capita)

6. Once established, should expense limits increase automatically by some form of inflation index?

Yes	126
No	63

If no, should expense limits increase automatically by other criteria?

Yes (please specify):	22 (e.g., population growth, periodic review)
No	37

7. Would your responses to the above questions apply to the following local government positions?

Mayor

Yes	176
No	11

If no, please explain:

Councillor

Yes	185
No	3

If no, please explain:

School Board Trustee

Yes	178
No	9

If no, please explain:

Regional District Electoral Area Director

Yes	175
No	9

If no, please explain:

Vancouver Park Board Commissioner

Yes	167
No	11

If no, please explain:

Islands Trust Trustee

Yes	167
No	10

If no, please explain:

Expense Limits for Third Party Advertisers

8. Based on your knowledge of campaign spending by third party advertisers in your community during the 2014 local elections, do you feel campaign spending by third party advertisers was:

Too low	4
Acceptable	62
Too high	112

If too high, do you think campaign spending by third party advertisers in your community should be:

Rolled back	60
Capped at the community average of campaign spending during the 2014 local elections	34
Other (please specify)	28 (e.g., should not be allowed, limited to 5% of candidate’s spending)

9. What percentage of a candidate’s limit should third party advertisers be permitted to spend?

Less than 5%	79
5% to 10%	55
Over 10%	9
Other (please specify):	37 (e.g., no third party advertising should be permitted)

Candidacy Disclosure

10. Were you a candidate in the 2011 or 2014 local elections in British Columbia?

Yes	85
No	101
Do not wish to disclose	2

If yes, were you successful in seeking election?

Yes	41
No	39
Do not wish to disclose	5

Comments

Please provide any additional comments you have regarding local elections expense limits in British Columbia.

Comments included: the value of election expense limits in terms of fairness and accessibility; the need for contribution limits including a ban on corporate and union donations and conflict of interest issues; concerns with respect to disclosure requirements and enforcement. 

© 2015 Legislative Assembly of British Columbia

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