There could be changes to the rules which guide local elections when Albertans go the polls to pick their next crop of municipal leaders in 2021.

The Alberta government is holding a public consultation until the end of this month on the province's Local Authorities Election Act.

The need for changes to that legislation — particularly campaign finance reform — has been a key issue for years for Calgary Mayor Naheed Nenshi.

During a recent meeting of city council's intergovernmental affairs committee, Nenshi spoke about ways the current rules either don't work or are subject to a measure of abuse.

Nenshi recently talked with CBC News about some of his comments in that meeting and his thoughts about what he's hoping is on the province's radar for reforming local election rules.

The interview has been edited for length and clarity.

Q: At that committee meeting, you gave a number of examples of some of the abuses that are tolerated in our current system under the Local Authorities Election Act.

A: I think there are certainly challenges that are tolerated under the current system and I think the potential for abuse is even greater. So for example, there is no mechanism that is reasonable to actually go after someone who has violated the rules.

So for example, we had one candidate in the last election — at least, I haven't gone through all the filings myself — we had at least one candidate in the last election who actually had an illegal donation on his disclosure statement. Yet there's really nothing you can do short of a private court action. So that's not right. Somehow there needs to be teeth in the enforcement of this whole thing.

System subject to abuse

Number two is there is no mechanism by which you can check the accuracy of these filings. I can't remember if you need to sign a declaration, a statutory declaration as a candidate. I think you just have to sign a simple thing. There's no requirement for an auditor.

We had the candidate who spent the most money in the last election submit sort of a hand-written form with no auditing on it so who knows how accurate these things are? I've always audited mine and had an external auditor come in and look at it but still, you don't know how accurate these are. In terms of actual fundraising, it's difficult to trace the amounts raised.

Some candidates have chosen to read the existing legislation as: if you have a fundraising event, you don't have to say who was there. You just have to declare the total. If you're having a $500 a head fundraising event, well that's a $500 per person donation. So there are a number of technical problems with the system.

Too much money in system

There are also problems in terms of there being far too much money in the system. So you know you look at a council candidate who has raised over $300,000, you look at councillors who have events in their wards that are privately sponsored, but is that campaign funds? Or is that money donated to the City? How is that tracked?

So there's really a large number of problems here and I think the big issue is that in order to fix it, you have to fix a whole bunch of things at once. Otherwise, you are pushing down on a waterbed and it's just bubbling up at the other side. You're creating loopholes if you fix one thing and you don't fix the other thing, so I think you really need to do five or six things simultaneously in order to try and fix the holes in the system.

Q: There are other examples you gave where there could be the appearance that the rules are being respected but when you delve a little deeper, there's actually a way around it. You mentioned a candidate could sign a cheque over to somebody for a service performed but the cheque never gets cashed. How does that work?

A: Those things, I don't think you can fix frankly, if there's a little thing like that. You have to be very very clear that if there are donations in kind, those count as donations and they are subject to limits. You know, you'll recall there was this famous video that came out in the last election, but one of the lines in there was talking about how one company might take on the printing of someone's campaign to take down the cost of the campaign.

You actually can't do that unless it's less than the legal limit, which at that time was $5,000 per year, so these are the sorts of things that you need to be super careful about. You'll recall that a couple of provincial elections ago — and this came up in the last municipal election — we had a bunch of bundling (of donations).

Bundling donations

So a whole bunch of people who work for the same firm gave a lot of money to one political party but it was deemed OK or mostly OK — I think a couple of the donations were disallowed — but it was deemed as OK because the donations came from different individuals even though they were clearly bundled together.

So these are the sorts of things we've got to look at. The good news is there is tons of experience in Canada and the United States on how — what can be done with loopholes which gives us a real roadmap on how to close them … I think for fairness you need pretty hefty restrictions.

Q: At the municipal level, how can that bundling loophole be closed when you're at $5,000 maximum donations per year?

A: We haven't seen too much of a problem with that, just because the donation limit is so very high. You know, $5,000 per year, times four years, is $20,000, so I haven't seen a ton of evidence of bundling because the limit is so high that a company will just give that amount of money.

So that is a danger if we reduce the donation limits — which we should do — but you might run into that bundling program so you have to be very careful that the limits apply to companies, subsidiaries, affiliates.

This is one of the reasons why banning corporate and union donations — which sounds like a gimmie, it sounds like an easy thing to do — is actually problematic at the municipal level. And that's because the vast majority of donations come from one industry, the real estate and development industry in which many of the companies are privately-held.

Calgary Mayor Naheed Nenshi has some suggestions for rules that could improve municipal elections. (CBC)

So if they're privately-held and you ban corporate donations, there's nothing preventing the company from giving a dividend or a bonus to one of the owners and asking them to make that donation because sometimes the owners and the company are indistinguishable.

The problem there becomes: do you actually end up … with less transparency because everyone knows who XYZ Developer is, but they may not know who Jane Smith, the owner of XYZ Developer is? And so, looking at a disclosure statement, it would be much less clear where the money is coming from.

Q: Would making those donations receiptable help?

A: It helps a little bit in that it encourages individual giving and that's really the world you want to go to, but it really is a Band-Aid solution in search of a problem. You know fundamentally, you've got to do a whole bunch of things simultaneously. The first and the easiest one is simultaneous disclosure.

Earlier disclosure

Right now, you've only got to disclose your donors six months after the election. It's useless. You should have to disclose your donors prior to election day.

But the other ones that all have to go together are super important. We need much lower donation limits. So when the Alberta government put in the $5,000 per year donation [limit], the election before that there were fewer than six $5,000 donations across the whole province if memory serves.

Once the $5,000 limit went in, it became the expectation. So it was meant to be a ceiling but it became the expectation and there were dozens and dozens and dozens of $5,000 donations across the province and the average cost of a campaign skyrocketed.

So bringing those donation levels down a lot, to something more like what you can do in a federal election — even the Alberta provincial numbers are way too high — bringing it down a lot would [an] important thing [to] do.

Spending limits

Second is, set spending limits. These elections are way too expensive. They're relying on way too many paid staff and not enough volunteers. The sign wars, as anyone who moves around the city during an election knows, are insane. I think it makes a ton of sense to limit the amount of spending to say anyone who spends 75 cents per citizen or a dollar per citizen in your ward. … If it were a dollar, that means a mayor could spend $1.2 million dollars, a mayoral candidate. I think only Ric McIver has ever spent that much. That's probably still too high but some sort of ceiling makes a lot of sense.

Time limits

Next is set time limits on when you can fundraise. You know, there are municipal elections in Manitoba and Ontario this fall and they've only just now been able to start fundraising.

Here in Alberta, you can fundraise the day after an election for the next election which fundamentally means, you're not fundraising for the next election. If there is a quid pro quo or even a subtle quid pro quo, it's someone is giving you money based on your performance now, not on the next election. So I really believe that you have to have these very limited time periods, maybe the calendar year of an election, where you can only raise money at that time for that election.

Campaign surpluses

Number four is around campaign surpluses. Up until 2007, you could just keep the money and keep it as a personal gift. So now you can keep the money for your next election but you do have to donate to the City or your favourite charity if you choose not to run. I believe you shouldn't even be able to use surpluses for the next election. I think challengers and incumbents should all start at zero at the beginning of the campaign period.

Third parties

Finally, rules for third parties. I never thought we'd have to worry about PACs (political action committees) and super-PACs in Alberta. The last two municipal elections have shown that we absolutely do have to worry about them. They should have to register. They should be subject to the same campaign spending limits and donation limits as candidates and they should be subject to the same disclosure as well.

Q: I've come across a few examples in the last couple of elections where it appears someone has broken the rules but nobody does anything and nobody cares.

A: Well, I care ... and you care and the public cares.

Q: But there's no watchdog.

A: There's no watchdog so enforcement is really important here and if you ask our chief electoral officer, they would say, "We know, but we have no ability to fix this." And if you go to the province, they say, "Qell, that's up to the municipality to enforce that."

In reality, it's seems the only way to fix it is for an individual to take the offender to court. That's not right. There have to be sanctions and penalties in the legislation and someone has to have the power and the teeth to enforce them.

Q: Who do you think that should be?

A: I think it should be the chief electoral officer of a municipality.

Q: Why is that important?

A: The vast, vast, vast majority of people will follow rules. But you've got to have clear rules. That's number one.

But for those who don't follow the rules, you must have consequences.

And you know, anyone who knows me or has worked with me knows that I'm such a stickler for not just the letter of the law but the spirit of the law when it comes to transparency and when it comes to these sorts of rules and it really shakes me to the core that something that's as fundamental as our democracy we're not willing to enforce the rules on.