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HarperPAC shuts down shortly after forming

WATCH ABOVE: One Canadian group called HarperPAC was made up of former Tory staffers from the Harper government but the group didn’t last long, announcing late last night it was shutting down. Laura Stone reports on why the Conservatives are on the offensive today.

Please note: This story was updated Thursday, June 25 to indicate HarperPAC’s decision to shut down.

OTTAWA – Third-party political ads may look like any other, but the difference is who’s behind them.

In the United States, third-party ads are made by political action committees or PACs — special interest groups spend hundreds of millions of dollars to influence election campaigns. And PACs are now making their way north to Canada.

But a PAC launched in support of Stephen Harper and the Conservatives has shut down almost as soon as it formed.

READ MORE: Prime Minister Tom Mulcair? New seat projections, poll show NDP surging across Canada

Harper PAC was backed by former Conservative advisers and led by Stephen Taylor, the former head of the National Citizens Coalition.

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WATCH: Laura Stone explains the influence PACs are having on Canadian politics. (June 26)

Thursday night, just hours after a story about Canadian PACs aired on Global National, Taylor sent a tweet announcing HarperPAC was shutting down and will return donations collected so far.

“We have contributed to a new discussion about political financing in a fixed election era that is critical to our democracy,” he said in the statement.

It appears the problem with HarperPAC is that it didn’t have permission from Harper.

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According to the Toronto Star, the Tories had concerns about “questionable donations” and that the name implied the PAC was tied to the Conservative campaign.

Kory Tenycke, the former director of communications for the Prime Minister’s office and current Conservative campaign spokesperson,told the Star HarperPAC formed with “no co-ordination either with Stephen Harper’s office or the Conservative party’s office.

“[W]e have an issue with the HarperPAC because I think it’s confusing for people, they’ll think it’s us. I think people might donate to it thinking it’s us, might be confused that somehow we’ve endorsed the message they’re sending and we haven’t,” the Star reported Tenycke saying.

Taylor said the group would be “more than happy to focus our efforts elsewhere.”

The HarperPAC statement went on to say there wasn’t any attention focused on PACs until a right-wing one like HarperPAC launched.

“These groups on the left are using millions of dollars from unions to fund attack ads against Stephen Harper and the Conservative government,” Taylor told Global News prior to the group calling it quits.

Anti-Harper group Engage Canada recently launched a TV spot, paid for in part with union money, that rallies against the Conservative government.

READ MORE: Fire-breathing bald eagles highlight outrageous 60 second pro-Rand Paul ad

The concern with PACs is that they can spend as much money as they want on ads without having to abide by campaign spending rules.

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“They’ve exposed a loophole, that spending before the campaign starts doesn’t actually count against any spending limit and you can have a big influence that way,” said University of Ottawa law professor Michael Pal.

Third-party organizations don’t have to reveal who’s donating. Although HarperPAC listed its advisers, it wouldn’t name who gave them money.

Taylor told Global News the identity of HarperPAC donations would not be made public. The same goes for Engage Canada, which is backed for former Liberal and NDP strategists.

“We’re trying to start a conversation with the millions of Canadians who haven’t seen their values or their priorities reflected in this government,” said spokeswoman Jessica Hume.

The real spending

When the election is called, political parties are limited to what they can spend.

For an average 37-day campaign, it’s about $25 million.

The Conservatives can vastly outspend their opponents: since the last election, the party has raised about $70 million, compared to $43 million for the Liberals and $30 million for the NDP.

It doesn’t mean the parties can’t match spending during the election, but they may have to borrow to do it.

If the Tories opt for a longer campaign they can up those spending limits by almost $5 million a week.

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WATCH: The rise of Super PACs in Canada

But dropping of the writ is no longer where the real spending begins. With the new fixed election date, the campaign gets going well ahead of time.

That’s where PACs come in.

In Canada, federal political parties aren’t allowed to accept donations from unions or corporations. The PACs can.

Before the election is officially called for Oct. 19, third-party groups can spend all they want without telling anyone where they get their money.

READ MORE: Changing Canada’s electoral system: What are the options?

Pal said PACs can distort the election process.

“Someone who has a million dollars to give can do that and they can influence the political debate and it means the wealthy will have a disproportionate influence,” he says.

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“It’s impossible to regulate all the money being spent by interest groups, so once the genie is out of the bottle, it’s almost impossible to put back in,” he said. “So I hope the next government after the election in October will be willing to put new regulations in place.”

And unless the PACs are regulated, Canadians can expect a wild west of political ads – just like those seen in the U.S.

With files form Nick Logan