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Federal, Quebec and Toronto political donations and scandals show proposed Ontario donation limit in Bill 2 is a charade that won’t stop unethical cash for access or influence of big money donations

Cash for access still allowed in three ways – proposed Ontario limit essentially the same as federal limit, and in 2015 federal Liberals received almost 23% of their donations from just over 4% of wealthy donors who gave $1,100 or more

Ontario’s proposed limit will likely also lead to illegal funneling of donations by corporations (as happened in Quebec and at the federal level)

A 50-group coalition, and almost 10,000 Ontarians, call for lowering annual donation limit for all individuals (including candidates) to Quebec limit of $100, and decreasing annual per-vote public funding amount and replacing it (if parties can prove it is needed) with annual public funding that matches funds raised

Same changes should be made to municipal system across Ontario

Tuesday, November 15, 2016

OTTAWA – Today, as the Ontario legislative committee completes its final review of Bill 2, Democracy Watch and the Money in Politics Coalition (made up of 50 groups with a total of more than 3 million members), joined by almost 10,000 Ontarians who have signed a petition on, called on Ontario’s political parties to make changes to Bill 2 that will actually democratize Ontario’s political finance system by:

  1. lowering the annual individual donation limit from $2,400 to $100;
  2. also lowering the limit of what candidates can give to their own campaign to $100);
  3. prohibiting loans to parties except from a public fund;
  4. decreasing per-vote annual public funding to $1, and;
  5. (as in Quebec) increasing donation-matching public funding.

The proposed Ontario annual donation limit to each party is just a bit lower than the federal donation limit, and donations to parties in Quebec, the federal parties in the past few years, and to Toronto city councillors, show clearly that cash-for-access will continue in Ontario with such a high donation limit. The Ontario legislative committee reviewing Bill 2 (formerly Bill 201, before the Ontario legislature was prorogued) is considering amendments this week – Democracy Watch presented the above proposed changes to the committee on June 28th during its hearings in Ottawa (See the submission here (PDF)).

Even with the changes made by Bill 2, cash-for-access will still be allowed in three ways:

  1. events will still be allowed at which people who have made top donations get special access to the Premier and Cabinet ministers (such as the Liberals exclusive Red Trillium Club events for anyone who donates $1,000 or more), or to opposition party leaders and MPPs, and their staff;
  2. the Premier, Cabinet ministers, opposition leaders and MPPs, and their staff, will also still be allowed to solicit donations by phone and email from people who want to meet with them, and they will likely meet and communicate with top donors more than with people who don’t donate, and;
  3. lobbyists will still be allowed to assist with fundraising and campaigns for ministers, party leaders and MPPs they lobby.

“The Ontario Liberals’ proposal to ban ministers, MPPs and staffers from attending fundraising events is a charade that won’t stop cash-for-access fundraising, it will just hide it as they will still be allowed to hold thank-you events for top donors and meet with them more than other voters, as well as ask people lobbying them for thousands of dollars in donations by phone and email, and lobbyists will still be allowed to help ministers and MPPs with fundraising and campaigning,” said Duff Conacher, Co-founder of Democracy Watch and Chairperson of the Money in Politics Coalion. “Unless key changes are made, the new Ontario political finance system will also facilitate illegal funneling of donations from corporations and other organizations through their executives and families, as happened in Quebec and at the federal level.”

“As Quebec and the federal donation scandals show clearly, the only way to stop the unethical, undemocratic influence of money in politics is to stop big money donations by lowering the donation limit to $100-$200,” said Conacher.

Few have been charged in Quebec’s corruption scandal even though an Elections Quebec audit found $12.8 million in likely illegally funneled donations from 2006-2011. To stop the corruption, in 2013 Quebec lowered its individual donation limit to $100 annually to each party, with an additional $100 allowed to be donated to an independent candidate), and required donations to be verified by Elections Quebec before being transferred to parties and candidates. Ontario should make the same democratic changes.

At the federal level, SNC-Lavalin illegally funneled almost $118,000 to the Liberal and Conservative parties, riding associations and candidates through its executives and employees from 2004 to 2011. And former-Conservative MP Dean Del Mastro’s cousin was charged in 2014 with illegally funneling donations through his business’ employees.

There are likely many more examples of illegally funneling of donations at the federal level, as it seems Elections Canada has not yet done the full audit it promised to do in 2013. As in Quebec, when Elections Alberta did an audit in 2012 it found dozens of illegal donations.

As well, the Liberals have been recently caught in a cash-for-access scandal as Prime Minister Trudeau and several Cabinet ministers have attended about 90 high-priced, exclusive events since January 1, 2016. And, as the Globe and Mail reported on October 25th, one of the events was a fundraising event to be attended by the Finance Minister that a drug company executive helped to organize while his company is lobbying the Finance department. Democracy Watch filed a complaint about the event with the federal Lobbying Commissioner who is investigating, and also a complaint about another event the same drug company executive organized for Justin Trudeau in August 2015.

The results of Democracy Watch’s research also show that top federal Liberal Party donors (to the Party only, not its riding associations) who gave $1,100 or more in 2015 were only 4.37% of total donors (4,084 donors out of 93,426 donors total) but they gave the Party 22.87% of total donations raised ($4,866,373.76 out of the $21,276,897.57 total raised.

As well, the federal Liberals hold special events for donors who donate $1,500 or more annually (they become members of the exclusive Laurier Club). As the Globe and Mail reported recently, based on Elections Canada figures only 790 people (0.85% of all donors to the Liberals) donated $1,500 or more in 2015, and in 2014 only 522 people (0.68% out of 77,064 total donors) donated $1,200 or more (the amount needed in 2014 to qualify to attend a Laurier Club event).

Toronto’s experience is another example of how high donation limits allow donors to get around bans of corporate and union donations. Such donations were banned in Toronto elections in 2009, and individual donations limited to $750 annually, but a 2016 analysis by the Toronto Star found that big business and other special interest group executives and their families continue to give large amounts to city councillors.

Loans from financial institutions will also be unlimited under Bill 2, giving the financial sector another avenue of influence. Loans should only come from a public fund and be limited to the average total amount donated during the previous two years.

As well, the Liberals’ proposed $2.71 annual per-vote public funding is much too high as it will give parties more than a base amount of funding and will allow them to prosper even if they lose significant voter support in between elections. The per-vote funding should be lowered to no more than $1 per vote, and the parties should implement a similar annual public funding matching system as Quebec ($2.50 for the first $20,000 raised annually by each party, and $1 for the first $200,000 raised annually). Elections Quebec has analyzed the results of Quebec’s changes and found that the parties are still adequately funded.

“To match Quebec’s world-leading democratic system, Ontario must limit individual donations to about $100 annually and use per-vote and matching public funding to give parties and candidates funding based on their actual level of voter support,” said Conacher. “Similar changes should be made to Ontario’s municipal law, taking into account that there are no parties at the municipal level, so that every municipality in the province has the same democratic rules.”

The key changes Ontario must make to actually democratize its provincial political finance system are as follows (and similar changes should be made province-wide to the municipal political finance system, taking into account that there are no political parties at the municipal level):

  1. ban donations by corporations, unions and other organizations (Quebec enacted such a ban in the late 1970s);
  2. limit annual combined total donations of money, property and services by individuals to $100-200 to each party (Quebec’s limit is $100), and establish the same limit on candidates donating to their own campaign, with donations routed through the election watchdog agency (as in Quebec);
  3. prohibit loans to political parties, riding associations and candidates, except from a public fund (with loans limited to the average annual amount of donations received during the previous two years);
  4. limit spending leading up to, and during election campaigns by parties, nomination race and election candidates, third party interest groups, and also candidates in party leadership races;
  5. require disclosure of all donations and gifts of money, property, services and volunteer labour given to any party, riding association, politician, nomination race, election or party leadership candidate, including the identity of the donor’s employer, and board and executive affiliations (and the identity of anyone who assists with any fundraising or fundraising event);
  6. give annual public funding for parties based on each vote received during the last election (no more than $1 per vote, with a portion required to be shared with riding associations);
  7. give annual public funding for parties matching up to the first $500,000 raised (as in Quebec);
  8. give public funding matching up to $25,000 that each nomination race and election candidate (including an independent candidate) raises (similar to Quebec’s matching funding system), and public funding matching up to $100,000 that each party leadership campaign candidate raises;
  9. require election, donation and ethics watchdogs to conduct annual random audits to ensure all the rules are being followed by everyone;
  10. the Auditor General’s full power must be restored to review all government advertising and to stop or change any ad that is partisan or misleading;
  11. all penalties for violating donation and spending rules must be increased to minimum $100,000 fine and a multi-year jail term, and loss of any severance payment, and a partial clawback of any pension payments, and;
  12. Elections Ontario must be required to disclose the rulings they make on all complaints they receive as soon as they make the ruling, and to disclose the rulings they make on all investigations they initiate themselves.

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Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Money in Politics Campaign