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Ontario political parties going for the gold at their summer games –proposed Bill 201 amendments will allow big money to continue to have unethical, undemocratic influence over politicians and parties

With the same donation limit as proposed by the Ontario Liberals, businesses flowed $12.8 million through their executives to Quebec parties from 2006-2011, and 8.9% of donors gave 41.7% of total donations to the federal Liberals in 2014
(and top donors get perks from many parties)

As 50-group coalition, and almost 10,000 Ontarians, have called for, annual donation limit for all individuals (including candidates) should be lowered to Quebec limit of $100, and annual per-vote public funding amount should also be decreased and replaced with annual public funding that matches funds raised

Same changes should be made to municipal system across province

Wednesday, August 24, 2016

OTTAWA – Today, 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 stop going for the gold during their summer games and make changes to Bill 201 that will actually democratize Ontario’s political finance system by: lowering the individual donation limit from $2,400 to $100 (and also lower the limit of what candidates can give to their own campaign to $100), prohibiting loans to parties except from a public fund; decreasing per-vote annual funding, and; increasing donation-matching funding.

The Ontario legislative committee reviewing Bill 201 will consider amendments next week – Democracy Watch presented these proposed changes to the committee on June 28th during its hearings in Ottawa (See the submission here (PDF)).

“While some of the political parties’ proposals to change Bill 201 are good steps forward, the proposed individual donation limit is clearly undemocratic and unethical because it will continue to allow wealthy people to give thousands of dollars more to parties and candidates than an average voter can afford,” said Duff Conacher, Co-founder of Democracy Watch and Chairperson of the Money in Politics Coalition. “As Quebec’s corruption scandal, and Toronto’s experience, both show clearly, the proposed high donation limits will also allow corporations, unions and other organizations to continue to donate large amounts by having their executives and their family members all make the maximum donation each year. The proposed high donation limit will only obscure the corrupting influence of donations from wealthy interests, not stop it.”

According to the Globe and Mail and Toronto Star, the Ontario Liberals are proposing to change Bill 201 by lowering the annual donation limit for individuals to each party and its riding associations and candidates to $2,400 (and to $3,600 during a year with an election or by-election). Opposition parties are proposing to: ban cash-for-access events that create a real or apparent conflict of interest (NDP) or ban MPPs and ministers from soliciting donations from stakeholders (PC) – while the Liberals want to address the issue of fundraising from stakeholders through a code of conduct to be drafted later. The Liberals have also proposed some changes to make fundraising more transparent and to tighten and clarify a few other rules.

Because the donation limit will continue to be much higher than an average Ontario voter can afford, none of these amendments will stop donors who donate the most from having greater access and influence over politicians and political parties, and none of the amendments will stop businesses, unions and other organizations from funneling large donations through their executives and members of their family.

Even though funneling donations is made illegal by Bill 201 (as it was in Quebec), the donors will just claim they were not forced by their company, union or organization to make the donation, and no one will be able to prove otherwise. 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.

Loans from financial institutions will also be unlimited under Bill 201, 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.

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.

And to give one example from the federal level, in 2014 only 8.9% of donors gave 41.7% of total donations to federal Liberal Party (and 3.8% of donors gave the party 23.1% of the total donated to the Party – neither of these figures count how much more these people gave to riding associations that year).

The federal Liberals hold special events for those 3.8% of top donors (members of the exclusive Laurier Club) and the Ontario Liberals do the same (people who donate $1,000 or more become members of the exclusive Red Trillium Club) – events that give them special access.

(NOTE: The details are that in 2014, federal individual donations were limited to $1,200 to each party (and another $1,200 combined total to each party’s riding associations). Total donations in 2014 (the most recent year for which full data is available) to the federal Liberal Party only (not including donations to its riding associations) were $15,063,142 from a total of 77,064 donors. Of that amount, only 2,937 individuals (3.8% of total) donated more than $1,100 each (up to the then-limit annually of $1,200), for a total of $3,493,227 (23.1% of the total donated to the Party). Also of the total amount donated to the Liberals in 2014, only 3,913 individuals (5.07% of the total) donated from $500 to $1,100 each, for a total of $2,802,998 (18.6% of the total donated to the Party)).

Bill 201 also allows nomination race and election candidates to donate $5,000 to their own campaign, and party leadership candidates to donate $25,000 to their own campaign. Candidates should not be allowed to donate more than anyone else to their campaign as it gives an advantage to wealthy candidates.

“Allowing candidates to donate thousands of dollars to their own campaign undemocratically favours wealthy candidates,” said Conacher.

According to the Toronto Star, the Liberals are also proposing to increase the annual per-vote funding amount from $2.26 per vote to $2.71. Instead, all parties should agree to lower the per-vote annual public funding amount 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. Matching funds raised by parties and candidates with public funding should also be added to the new system.

The proposed annual per-vote public funding subsidy should be lowered to no more than $1 per vote, and instead the parties should implement the same 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. a ban on donations by corporations, unions and other organizations (Quebec enacted such a ban in the late 1970s);
  2. a limit on annual donations by individuals to each party of $100-200 annually (Quebec’s limit is $100) with donations routed through the election watchdog agency (as in Quebec);
  3. a prohibition on 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. a limit on spending during leading up to, and during election campaigns by parties, nomination race and election candidates, third party interest groups, and candidates in party leadership races;
  5. 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 organizers of any fundraising event);
  6. a base amount of 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. annual public funding for parties matching the first $100,000-$200,000 raised (as in Quebec);
  8. public funding for candidates matching the first $20,000 raised (as in Quebec), and;
  9. a requirement that election, donation and ethics watchdogs conduct annual random audits to ensure all the rules are being followed by everyone.

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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