Ontario tightens political fundraising rules, bans corporate and union donations

TORONTO – Ontario is tightening the rules on political fundraising with legislation that would ban corporate and union donations and reduce the amount individuals can contribute to parties.

The bill would also impose contribution and spending limits for the first time on leadership contests and candidate nominations, and create new spending limits on so-called third party advertising before and during election periods.

Individuals would be able to contribute a total of $7,750 to each party and its candidates and riding associations in an election year, or about $6,200 in non-election years.

Current political donation limits in Ontario are $9,975 for a political party, $6,650 to the candidates of a party, and $6,650 to the constituency associations of a party, but the rules often allow multiple contributions.

The Liberals want a new advertising spending limit of $1 million on parties for the six months before a scheduled election, but there are no new overall spending limits proposed for political parties during campaigns or afterwards.

“This bill would serve as a starting point for discussion,” said government house leader Yasir Naqvi.

The legislation will get four weeks of public hearings by a committee this summer and a second round of consultations after second reading in September.

“Taking this step will give committee members the ability to examine the scope and the principle of the bill,” said Naqvi. “They will have the opportunity to change it and shape it based on what they hear in their consultations.”

Progressive Conservative Leader Patrick Brown supports most of the changes, but warned companies and unions could skirt the new rules by dedicating groups of employees or members to help a political party.

“My worry is that they’ve left loopholes in this bill intentionally,” he said. “The Liberals are obviously looking at loopholes that benefit them.”

Both Brown and NDP Leader Andrea Horwath complained that campaign financing was too important an issue to be dictated by just the governing Liberals.

“Unfortunately the Liberals drafted this stuff in a back room without input from anybody,” said Horwath. “There should be an open and democratic process to change the way that we finance elections and political parties in this province.”

The independent citizen advocacy group Democracy Watch said individual donation limits are too high to “stop the unethical influence” of wealthy interests.

“The proposed annual individual political donation limit of $7,750 to each party is clearly undemocratic because it is many times higher than an average voter can afford,” said Duff Conacher, co-founder of Democracy Watch.

“Such a high donation limit will allow wealthy individuals to continue to use money as an unethical way to influence politicians.”

The government also proposed that taxpayers give each party a $2.26 per vote subsidy each year to offset the lost donations from companies and unions, which would be reviewed after five years to see if it’s still necessary.

“Democracy is not free,” Naqvi said.

Green Party of Ontario Leader Mike Schreiner said the per vote subsidies will cost about $10.9 million a year, less than the $13 million the province currently spends to provide tax rebates for political contributions.

“The tax credits are a pay-to-play system and we’re advocating for a vote to play system because that would be more democratic and fair,” said Schreiner.

“If you want public policy developed in the public interest then the public should fund political parties.”

The federal government eventually phased out the per voter subsidies that it introduced after banning corporate and union donations 10 years ago.

The rule changes come as the Liberals fend off allegations they sold access to cabinet ministers at expensive fundraising dinners and receptions.

Premier Kathleen Wynne has cancelled all her private fundraising events and those of Liberal cabinet ministers, and said they would no longer solicit donations from companies looking to do business with their respective ministries.

The proposed new regulations for third party advertising include a spending limit of $100,000 in an election period, including a limit of $4,000 per riding. Third parties would face a spending limit of $600,000 in the six months before a general election is called, including a limit of $24,000 per riding.

Ontario’s current rules require third parties to register and report their advertising expenditures during elections, but there are no limits on what they can spend.

A number of unions had joined together in the past few Ontario elections under the banner of Working Families, and outspent the political parties in each campaign with attack ads targeting the Progressive Conservatives.

The government wants the new political fundraising rules in effect before the next election in June 2018.