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BC Liberals accept foreign donations, despite ban in parts of Canada

British Columbia’s governing Liberal Party routinely accepts significant donations from foreign interests – a practice that is banned in many other Canadian jurisdictions.

Rafal Gerszak/The Globe and Mail

British Columbia's governing Liberal Party routinely accepts significant donations from foreign interests – a practice that is banned in many other Canadian jurisdictions. The party's overflowing campaign war chest includes cash from offshore oil and gas companies, European pharmaceutical companies and Beijing investment firms.

British Columbia has no residency requirement for political contributions from individuals or companies, but provincial Justice Minister Suzanne Anton said Thursday in an interview with The Globe and Mail that it's an issue "worth keeping an eye on."

Limiting foreign donations is not under consideration right now "but it is always something we are interested in," said Ms. Anton, who will introduce legislation on Monday to improve transparency in political donations.

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Gary Mason: BC Liberals' stance on donations an insult to voters

"It's not something we are proposing to do at the moment. I don't think it's a big influence in B.C. politics at the moment."

Duff Conacher, co-founder of the advocacy group Democracy Watch, said the absence of controls on contributions from non-residents adds another dimension to B.C.'s already-weak regulation of political fundraising.

"If you don't have a residency requirement, you leave the political process wide open to foreign interests affecting what goes on in the province," Mr. Conacher said in an interview. "And their interests are very unlikely to be the same as the interests of voters in the province."

On Saturday, a Globe investigation revealed that the BC Liberal Party collected tens of thousands of dollars in multiple donations from lobbyists who paid under their own names with personal credit cards on behalf of clients and companies and were reimbursed, which is against the law. Elections BC is now investigating.

B.C. also has no limits on contributions, and it allows union and corporate donations. That combination of policies has made the province lucrative for political fundraising, and the two main political parties, the Liberals and the NDP, have raised well in excess of the spending limits of $4.4-million each can spend in this spring's provincial election campaign.

The Liberals raised $12.6-million in 2016, while the NDP raised $6.2-million.

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The New Democrats have not released details of contributions in 2016, but the Liberals have adopted a "real time" disclosure system of donations.

Some of those 2016 donations include:

  • A $10,000 donation from Sakuna Natural Resources Inc. The corporation is not registered as a company in B.C. or registered federally as Canadian company. Its location is unknown.
  • Huamulan Developments Inc. gave the Liberals $5,000. It is owned by Beijing Huamulan Investment Ltd., a Chinese company that invests in construction of student apartments near colleges and universities.
  • Mengfa International Resources Inc. gave $2,800. It is a B.C. registered company. However, its director, Xi Gao, has a Beijing address. Bloomberg Business also lists Mr. Xi as the chairman of Inner Mongolia Mengfa Coal and Charcoal Co. Ltd.
  • The Orient Investment Corp. gave $1,000. It is not registered as a company in B.C. or registered federally as a Canadian company, and its location is unknown.
  • The Liberals took $5,250 from Pacific NorthWest LNG. The majority owner is Petronas, the state-owned energy company of Malaysia, which is seeking to build a liquefied natural gas plant in northern British Columbia.
  • Gukan Construction, owned by Kenny Gu, donated $12,800 last year. Mr. Gu is a real estate speculator who was featured in a Globe investigation last year. At the time, he acknowledged his business is bankrolled by wealthy Chinese businesspeople, who earn their living overseas, while investing in Vancouver real estate.

The NDP will file details of all 2016 contributions to Elections BC by the end of March, as required by law. Those details will later be released by the electoral agency. Glen Sanford, deputy director of the party, said he could find a total of $445 from individuals outside of the country in the party's 2016 donations.

There is a residency requirement in five provinces including Ontario and Quebec, two territories and at the federal level.

Francesco Trebbi, professor of economics at the Vancouver School of Economics at UBC, said many jurisdictions in Canada and elsewhere ban foreign donations to curtail outside influence of domestic policy.

Prof. Trebbi said there is a major distinction between residents of a jurisdiction taking part in the democratic process, and those from outside seeking to influence elections.

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"If you are talking about a B.C. resident, you have to think about freedom of speech, freedom of rights to be associated with a campaign, whether it is through a donation or by physically volunteering. If you have a political interest, you shouldn't be forbidden from giving money," he said. "If this is a guy from Europe with no interest here, you start thinking, why do foreign interests want to influence domestic policy? Their freedom of expression rights are not relevant here because they vote somewhere else."

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About the Authors
B.C. politics reporter

Based in the press gallery of the B.C. Legislature in Victoria, Justine has followed the ups and downs of B.C. premiers since 1988. She has also worked as a business reporter and on Parliament Hill covering national politics. More

Kathy More

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