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Ontario overhauls campaign finance rules with sweeping reforms

Ontario has passed a sweeping set of campaign finance reforms to clamp down on cash-for-access fundraising, end corporate and union donations, impose tighter caps on individual contributions and put restrictions on SuperPAC-style third-party advertiser

Fred Lum/The Globe and Mail

Ontario has passed a sweeping set of campaign finance reforms to clamp down on cash-for-access fundraising, end corporate and union donations, impose tighter caps on individual contributions and put restrictions on third-party advertisers.

The Election Finances Act – prompted by a Globe and Mail investigation into pay-to-play fundraising – passed its final vote in the legislature Thursday morning with all three parties in support.

The new law leaves loopholes, but nonetheless represents the province's most substantial attempt in a generation to curb the influence of big money in politics. It takes effect Jan. 1, 2017.

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Related: Ontario political parties pack in fundraisers before rules change

Related: With cash-for-access, Justin Trudeau picks up where Kathleen Wynne left off

Read more: Ontario pulls sudden about-face with vow to ban cash-for-access fundraisers

"We want to build an election-financing system where there isn't even a perception of conflict," Government House Leader Yasir Naqvi said at Queen's Park after the vote. "It strengthens our democracy."

Premier Kathleen Wynne ordered the changes after The Globe exposed that she and members of her cabinet were offering intimate face-time to corporate leaders and lobbyists seeking government contracts and favourable policy decisions in exchange for donations of up to $10,000 to the Ontario Liberal Party. The party held more than 150 of these events, which typically involved cocktails and dinner at five-star hotels, over Ms. Wynne's first three years in office.

At first, Ms. Wynne tried to pass reforms that would have banned corporate and union donations but allowed cash-for-access to continue. Only after further reporting by The Globe did she relent and clamp down on cash-for-access, too.

The final version of the bill will prohibit the Premier, cabinet ministers, other MPPs, candidates, Premier's office staff or ministerial chiefs-of-staff from attending fundraising events.

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Politicians and their staff will still be allowed to fundraise over the phone or by e-mail, however.

The Liberals used their majority on a legislative committee to block a Progressive Conservative amendment that would have prohibited any owner or employee of a company doing business with government from donating.

PC Leader Patrick Brown said Thursday the legislation did not go far enough but was "a positive step" over all.

"This is long overdue," he said. "If you looked at the contracts that were being given out and donations that were coming in, there was an appearance that the policy you wanted was based on how much you were willing to give the government."

The government also voted down an NDP move to ban the Premier and cabinet ministers from fundraising in any fashion.

"[The law] bans cabinet ministers, MPPs from attending those fundraisers but doesn't stop them from picking up the phone and having the exact same conversation," NDP Leader Andrea Howarth said.

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Campaign finance expert Robert MacDermid contended it would have been more effective to simply lower contribution limits even further – to $500 or less – and require political parties to disclose who attended their events and what companies they worked for. This would have allowed large-scale, public fundraisers for rank-and-file party members to continue while discouraging smaller, secret cash-for-access events targeted at the wealthy.

"Lower donation limits would make it less likely they would do these kinds of things," said Dr. MacDermid, an associate professor of political science at York University in Toronto. "And put the onus on politicians to disclose who was in the room."

The new rules will bring Ontario into line with the federal government by prohibiting corporations and unions from donating – a practice that has been illegal in Ottawa for a decade.

It will also cap annual donations from individuals at $1,200 to a political party's central office, $1,200 to its constituency associations and $1,200 to its candidates – an effective limit of $3,600. And it closes a loophole that allowed donors to double their contributions during any election or by-election period.

Under the previous system, donations to central parties were capped at $10,000, but donors could stretch that to more than $30,000 most years by using the election and by-election loophole, and by donating to constituency associations and candidates.

The law also brings in the province's first significant restrictions on third-party advertising. Under the current system, corporations, unions or wealthy individuals who want to influence an election can spend as much as they like on political advertising. This has led to organizations modelled on U.S. SuperPACs – most notably Working Families, a union-backed group that ran millions of dollars' worth of attack ads against the Progressive Conservatives.

The new rules will cap third-party advertising spending at $100,000 during a campaign period and $600,000 in the six months before.

An earlier version of this article incorrectly said banks made nearly $60-billion off the privatization of Hydro One. In fact the correct figure is $60-million.

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About the Author
Washington correspondent

Adrian Morrow covers U.S. politics from Washington, D.C. Previously he was The Globe's Ontario politics reporter. He's covered news, crime and sports for The Globe since 2010. He won the National Newspaper Award for politics reporting in 2016. More

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