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Michael Pal is an assistant professor in the University of Ottawa's Faculty of Law.

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With the introduction of big-spending interest groups running negative ads, Canadian elections may start looking more like those in the United States.

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This week, individuals with past links to the Conservative Party announced the creation of HarperPAC. The PAC stands for "political action committee" – groups formed to spend money on behalf of political candidates – and is taken straight from U.S. politics. HarperPAC's mission is to persuade Canadians to re-elect Stephen Harper in October.

It follows closely on the heels of the leap into the political fray by Engage Canada, an interest group formed to defeat the Prime Minister, which is run by prominent New Democratic and Liberal partisans and partly union-funded. Both HarperPAC and Engage Canada have adopted the same tactic – pound the airwaves with ads.

Why are we seeing the proliferation of these groups, known under federal election law as third parties? Electoral rules try to establish a level playing field in politics by restricting how much money parties, candidates and third-party interest groups can spend. These limits come at a cost to the constitutionally-protected freedom of political expression. Yet the Supreme Court of Canada has ruled that the tradeoff is worth it. Permitting unlimited spending would allow those with resources to dominate the political conversation and drown out the voices of their fellow citizens.

But there is a huge loophole in these spending limits: They only apply during the election campaign. The Conservative Party recognized this and moved much of its advertising to the period before the writ is dropped, when it doesn't count against the party's spending limit.

HarperPAC and Engage Canada are following the same playbook, but for interest groups. The spending limits that interest groups face during campaigns are effectively meaningless. They can simply saturate television with advertising in the lead-up to the vote in October. Whether they have the funds to do so and the wherewithal to run effective ads is an open question, but current laws put no meaningful restrictions on them.

The United States provides a cautionary tale of unlimited interest group spending. Restrictions on spending by interest groups are either non-existent or unenforceable in U.S. politics. PACs and similar groups backed by the rich, as well as corporations and unions, spend billions. The wealthy dominate the conversation. Things have got so bad that the chairman of the U.S. Federal Election Commission, which oversees campaign financing, recently declared its total inability to regulate money in politics.

While not of the same magnitude as in the United States, the spending on ads by HarperPAC and Engage Canada lay bare the fact that there are flaws in the Canadian system. Interest groups face no limits on how much can be donated to them. Want to contribute $1-million to help get the Conservatives re-elected? The law won't let you donate that much to the party, but you can do so to HarperPAC. While technically independent, HarperPAC can then simply use that money to run ads parroting the messages used by the party. As long as this happens before the writ is dropped, there is no violation of election laws. An interest group running ads directly advocating for or against a politician raises the possibility that it is being used as a vehicle to avoid donation limits faced by parties.

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Canada must strike a new balance that respects freedom of political expression while also preserving the level playing field. We need to consider extending restrictions on spending by political parties and by interest groups to the period between elections. Advertising that is truly about issues is valuable in a democracy and could be exempted from the limits placed on advocacy for or against a candidate.

Limits on contributions to third parties should be on the table for discussion. Elections Canada will need new tools to ensure that interest groups are truly independent and not merely acting as proxies for political parties. At a minimum, enhanced rules on timely disclosure of donors to third parties are necessary, so voters will know who is trying to persuade them.

If we don't close the loopholes exposed by HarperPAC and Engage Canada, we will lose the level playing field that has made Canadian elections fair.

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