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Tom Flanagan, professor of political science at the University of Calgary and a former federal Conservative campaign manager

In 2000, Jean Chrétien's Liberals brought in legislation to restrict paid advertising in federal election campaigns by "third parties," i.e., groups other than registered political parties. I opposed the bill out of concern for freedom of speech, but I was wrong. Developments in the provinces, where third-party ads remain largely unregulated, show how right Mr. Chrétien was to fear unrestricted third-party involvement in elections.

The worst case is Ontario, where organized labour has hijacked the electoral process, making itself the kingmaker of provincial governments. In the 2011 Ontario provincial election, the law limited the Liberal and Progressive Conservative parties to spending a little over $9-million each during the writ period, of which about $5-million went to advertising. Three union entities – the Working Families Coalition umbrella group, the Elementary Teachers' Federation of Ontario and the Ontario English Catholic Teachers Association – continued to play the same major role in the electoral process that labour had played in 2003 and 2007. Together, the three spent more on advertising in the writ period than either of the main parties. To use American terminology, organized labour is now a Super PAC.

Individuals, corporations, and unions were legally limited to giving a maximum of $9,300 to Ontario political parties in 2011, whereas contributions to third-party entities were unlimited. The elementary teachers alone spent an astonishing $2.6-million on ads, almost 300 times as much as they could have given to a party. And these numbers underestimate what the unions actually spent, because Ontario law requires reporting only during the writ and a short period before and after. The unions also spent heavily on advertising before the election was called, but since they didn't have to report such expenditures to Elections Ontario, we will never know the true extent of their involvement.

This wouldn't matter much if the unions had advertised for and against candidates of all parties, but in fact their activity was directed monolithically against the Progressive Conservatives and leader Tim Hudak. The union entities ran mostly anti-Conservative negative ads, which of course conferred an advantage on the Liberals. Dalton McGuinty could take the high road, with positive ads projecting his likeable "Premier Dad" side. In effect, the union ads more than doubled the Liberals' advertising budget, which would have otherwise been roughly equal to that of the Progressive Conservatives.

It is a brilliant strategy for increasing the political power of organized labour, but it is also harmful to the long-term provincial interest. Organized labour has got its quid pro quo – bailouts of troubled industries, sweetheart contracts with public-sector unions, favourable provisions in the labour code, economically inefficient job-creation schemes. The result is a provincial deficit driven out of control, with Ontario slipping into the embarrassing category of a have-not, equalization-receiving province.

In the present climate of restraint, Mr. McGuinty may get some concessions from the unions, but the long-term problem remains the same: Ontario's election law allows the unions to exercise enormous political power without accepting governmental responsibility.

As Lenin once asked, "What is to be done?" It would help if the bien pensants who express so much scorn for the role of money in U.S. politics would recognize that Canadian provincial politics, especially in Ontario, now have their own Super PACs. Explaining to the public how Ontario's election law is harming the province would be the first step toward recovery.

But action as well as analysis will also be required, and only big business can raise the money to match big labour. The business community will have to balance the political equation by creating its own Super PAC, or watch the further steady decline of the Ontario economy.

Tom Flanagan is professor of political science at the University of Calgary and a campaign manager for conservative parties. He has been a union member since 1960.