Welcome back to Adjournment Proceedings, our weekly long read series. We publish a new edition every Friday. In this week’s edition, we look at the brewing fight in the Senate over a section of the government’s affordability bill that would exempt federal political parties from some privacy laws. 

Missed a week? Take a look through our archives here.

Senators are sending early signals to the Liberals that they’re prepared to rewrite the government’s signature affordability legislation over concerns about new measures exempting political parties from federal privacy laws.

It could prompt a rare overhaul of a tax bill by the Upper Chamber and pit senators against Canada’s largest political parties, which are in support of the changes.

Bill C-4 was one of the first pieces of legislation introduced by the Liberals after winning another term in office in the April 2025 election.

It cuts the lowest tax rate from 15 to 14 per cent, and eliminates the GST on new homes priced up to $1 million for first-time buyers.

But it also removed requirements for political parties to comply with federal or provincial privacy laws. The bill would only require parties to come up with their own privacy policies and have one annual meeting with the Chief Electoral Officer.

Parties that fail to comply with their own privacy policy could face administrative monetary penalties from the Commissioner of Canadian Elections, though the maximum fines range from $5,000 for a party and $1,500 for a person.

The bill also provides retroactive exemptions for the parties back to 2000. This is likely because of a 2024 decision by B.C.’s Supreme Court that ruled that the federal Liberal party had to comply with the province’s privacy law.

Critics have called the changes to privacy rules problematic, arguing that political parties amass large swaths of identifying personal data to help micro-target voters and oversight is needed to ensure this information isn’t misused.

They often cite the Cambridge Analytica scandal, where a British consulting firm was able to collect personal information from unsuspecting users’ Facebook profiles to mould political advertising campaigns for the Donald Trump and Ted Cruz 2016 presidential campaigns.

Senators on the Upper Chamber’s legal and constitutional affairs committee filed a report last week saying the bill “falls far short of the minimum standards required to protect the individual and national interests of Canadians, at a time when global experience indicates that these interests are increasingly at risk.”

They called for the privacy changes to either be removed or the section severed from the bill to allow for more in-depth study.

Another recommendation floated is putting a sunset provision that would allow for that part of the bill to be automatically repealed in two years.

Sen. Donna Dasko, a member of the Independent Senators Group, told iPolitics it’s clear that “something should be done” with the bill, pointing to concerns from privacy experts that it fails to provide robust protections and it’s unclear what penalties the parties would face for breaches.

She anticipates senators will make changes to the bill but doesn’t believe the government will be receptive.

“There will most likely be amendments proposed at third reading. I am not going to try to predict how they’re going to fall out, but if any one of the amendments passes, then it goes back to the House. I don’t think they’ll be happy,” she said of the government.

“What will they do? Well, we shall see.”

Bill C-4 is being studied by two different Senate committees. The national finance committee is studying the tax changes, while the legal committee is handling part four of the bill, which deals with privacy laws for political parties.

Ultimately, the finance committee will be responsible for suggesting amendments but they are required to take into consideration recommendations from the legal committee, as per a motion passed by the Senate.

A final report from the finance committee to the entire Senate must be completed by Feb. 24.

During Senate legal committee hearings last week, there was a clear divide between advocates calling for stronger protections and representatives from Canada’s largest political parties, who presented a rare unified front in support of the bill.

Blackberry founder Jim Balsille, who nows heads up the Centre for Digital Rights, told the committee that personal data is a highly valuable commodity and the growing market for it has led to “unprecedented levels of surveillance” that harm our economy and risk democratic rights.

He called Bill C-4’s privacy rules “wholly inadequate” in protecting the crucial personal information obtained by political parties, warning that it “provides no independent enforcement.”

“Measures that compromise democratic integrity should not be held hostage to much needed relief measures aimed at affordability challenges,” he said.

McMaster University professor Sara Bannerman told the committee that there’s “massive risk of misuse” of personal information by the parties such as potentially selling this data or sharing this information with government bodies. 

Elizabeth Denham, a former U.K. and B.C. privacy commissioner, told the committee that Canada is an “outlier” compared to other Western democracies in that political parties aren’t required to notify users of data breaches and face no independent oversight of their use of personal information.

Similar laws exist in the European Union, the U.K. and New Zealand, she said.

Many of the senators that spoke at committee raised concerns about the bill and suggested the government was trying to surreptitiously make changes to important privacy rules.

Conservative Senator Denise Batters said these changes shouldn’t have been in an affordability bill and accused the Liberals of doing so to ensure “that they can pass it quickly.”

Senator Bernadette Clement, a member of the Independent Senators Group, said using C-4 will allow the government to make major changes to privacy rules that “Canadians are not fully aware of.”

Lawyers representing the Liberals, Conservatives and NDP defended C-4 as a way to exert federal jurisdiction and said political parties are unique entities and should be treated differently those corporations.

Alexis Levine, a partner at Blake, Cassels & Graydon LLP and outside counsel for the Liberals, said the bill aims to create a single, national privacy regime for all parties and it was a “rare cross-partisan point of consensus.”

He said the bill clarifies that jurisdiction over federal political parties lands with Parliament and not provincial legislatures, arguing it’s impractical to require largely volunteer-led parties to familiarize themselves with “conflicting and overlapping” provincial or territorial privacy laws.

Levine said provincial and territorial laws are “commercial in nature” and “far more one-sided than is appropriate” to govern political parties, which need to keep in constant dialogue with voters, especially to contend with misinformation from bad actors.

“Political parties aren’t businesses. They need to be free to communicate with and keep track of the feedback they’re receiving from voters,” he said.

Levine suggested the parties were more open-minded to changes to privacy rules overseen by federal elections officials, calling it a “legitimate policy debate.” But he said that may need to be addressed in a separate bill and urged senators to quickly pass C-4 to “assert federal jurisdiction” over federal election law.

Michael Wilson, a partner with Goodmans LLP and outside counsel for the Conservatives, echoed Levine’s testimony, saying the “core activity” of political parties is communicating with voters and regulating these activities is “tantamount” to regulating federal elections themselves.

NDP outside counsel Carmela Allevato, a founding partner at Allevato Quail & Associates, said the lack of a singular system for federal parties would lead to a “patchwork” regime that would vary across jurisdictions.

University of Ottawa professor Michael Geist, a noted privacy law expert, called the response from the political parties an oversimplification and said the problem with the bill isn’t about jurisdiction but the lack of privacy protections.

“I think there is a case to be made that there should be a uniform national privacy approach. The problem is that C-4 doesn’t provide one,” he told iPolitics.

“It would mean the parties face fewer obligations than any other type of organization in Canada despite the widespread collection and use of personal information.”

As it stands now, Geist said political parties are already exempt from the federal Privacy Act and Personal Information Protection and Electronic Documents Act or PIPEDA.

He said that’s by design and the privacy standards in C-4 are “less than what the government established for the private sector more than 25 years ago,” while the proposed monetary penalties in the Elections Act are “inconsequential.”

As for the argument that parties are unique and should be given novel treatment, Geist said “their role in democracy is exactly why they should be held to a reasonable standard of privacy protection.”

“To do otherwise, undermines confidence in our democracy.”

Privacy Commissioner Philippe Dufresne has also called for amendments to the bill to bring political parties under stricter foresight.

His suggested changes include incorporating privacy standards from domestic and international data protection laws, creating requirements for political parties to notify those impacted by data breaches and mandating better cooperation between his office and elections officials.

Dufresne told the Senate legal and constitutional affairs committee last week that political parties should fall under privacy rules that are just as stringent as those seen in the public and private sectors but adapted for their unique role in the democratic process.

“Privacy is a fundamental right that is directly linked to democracy itself,” he said.

“Prioritizing privacy protects Canadians, it supports the Canadian economy and strengthens Canadian institutions. Prioritizing privacy is good for Canada.”

It’s very rare for the Senate to make changes to a government bill on tax or monetary measures. One of the most famous examples came in 1990 when the Upper Chamber initially blocked legislation to implement the GST.

Then-prime minister Brian Mulroney invoked a rarely used section of the Constitution to appoint eight additional senators to pass the bill.

Bill C-4 passed third reading in the House in December on division, with Green Leader Elizabeth May asking for her opposition to be noted.

But May supported the bill at second reading, where it won unanimous support from the House.