Liberals’ legislation bans union, corporate donations, reforms fundraising in Ontario
Premier Kathleen Wynne’s Liberals are moving forward with political fundraising reforms with a ban on union and corporate donations and lower contribution limits for individuals.

thestar.com
May 17, 2016
By Robert Benzie

Big business and big labour will no longer be able to bankroll Ontario political parties thanks to sweeping new legislative reforms triggered by a Toronto Star probe.

Premier Kathleen Wynne’s Liberals are banning union and corporate donations, lowering contribution limits for individuals, and introducing partial public funding for parties.

In the wake of a Star investigation in March that revealed Liberal cabinet ministers had secret annual party fundraising targets of up to $500,000 apiece, Wynne immediately pledged to revamp Ontario’s lax laws.

Government House leader Yasir Naqvi finally made good on that Tuesday by announcing legislation that would also severely limit the amount of money so-called third-party advocacy groups can spend before and during elections.

As well, Ontarians would publicly subsidize political parties for a transitional five-year period.

Next year, the Liberals, Progressive Conservatives, New Democrats, and Greens would get $2.26 for each vote collected in the 2014 campaign.

That means the Liberals would receive $4,212,581, the Tories $3,408,251, the New Democrats $2,587,297, and the Green Party $525,531.

The subsidy, based on the most recent election results, would gradually decline to $1.70 per vote in 2022, when it would be reviewed and possibly eliminated.

“Democracy is not free,” Naqvi told reporters at Queen’s Park.

Under the changes, individual donors would be allowed to give $1,550 to a party each year, down from the current $9,975.

Contributors would also be allowed to donate an additional $1,550 for up to two of a party’s candidates to a maximum of $3,100, and $1,550 for as many as two of a party’s constituency associations to a maximum of another $3,100.

Currently, you can give $6,650 to candidates and $6,650 to constituency associations on top of the $9,975 party contribution.

That means the most a person could give annually under the new rules would be $7,750, down from $23,275.

The legislation will also close the loophole that allows donors to double up and give an extra $9,975 to party if there is a byelection.

Naqvi said the new rules, expected to take effect Jan. 1, would severely restrict the use of loan guarantees, by considering them contributions.

That would outlaw the NDP’s union-financed holding company, Cornerstone, which recently sold party headquarters on Richmond St. E. for $3.5 million.

Cornerstone guaranteed the NDP a $6-million loan to cover the party’s 2014 campaign. There is still a debt of around $5 million.

While the New Democrats are not co-operating with the reform process, which they believe is being rammed through by the Liberals, the Conservatives and Greens have been involved.

Naqvi said several suggestions from the opposition are in his bill, including reducing a candidate’s threshold for being partially reimbursed for election expenses from 15 per cent of the popular vote to 10 per cent.

Tory Leader Patrick Brown welcomed the changes, but worries “loopholes” remain that would allow union members or corporate employees to be paid to volunteer on campaigns.

“It’s considered a donation in kind,” said Brown.

NDP Leader Andrea Horwath complained the Liberals had given themselves an advantage with the new rules.

“The Liberals’ legislation has set no limits on advertising by the government even as they restrict public participation by limiting non-partisan advertising during a campaign period and the six months preceding the campaign,” she said.

Indeed, not all Liberals are happy with capping “third-party” advertising at $600,000 in the six months before a scheduled election and $100,000 during the writ.

Marcel Wieder, key architect of the Working Families coalition of unions that helped the Grits win elections in 2003, 2007, 2011, and 2014 with labour-sponsored ad blitzes attacking the Tories, expressed concern at those restrictions.

“Governments need to remember that elections belong to the people, not politicians,” said Wieder, whose group has spent millions of dollars promoting progressive causes over the past 13 years.

“While there may be some merit in the government’s proposed campaign finance reform bill, it contains some significant flaws that are anti-democratic. Elections should be robust debates that encourage participation, not limit it,” he said from Israel, where he is a business delegate on Wynne’s trade mission there.

“Third-party ads introduce new issues to the election debate and deserve a chance to be heard. Allowing only the political parties to control the election agenda is unfair, unhealthy and anti-democratic.”

Naqvi said there would be new “anti-collusion measures” so unions and other groups cannot skirt the law, which are similar to federal measures in place for more than a decade.

The third-party advertising curbs will be aimed at “associated issue” advertising, which could encompass current marketing campaigns aimed at boosting doctors’ salaries, stopping the government’s sell-off of Hydro One, and other advocacy pushes.

Elections Ontario will oversee the new regime and scofflaws face fines of five times the amount they overspend the $600,000 and $100,000 limits.

There will be other restrictions, including a new maximum contribution of a candidate to his or her campaign of $5,000 and a $25,000 cap on self-funding leadership bids.

Parties will be allowed to spend only $1 million on advertising during the six months before a scheduled election, although the existing in-writ spending, which works out to $2.28 per voter plus an additional $9,310 in remote rural ridings, will continue.

Green Leader Mike Schreiner said the legislation is a start; he favours the per-vote subsidy, but would like to see stricter contribution caps.

“There’s still big money in politics,” warned Schreiner.