Skip to main content

Politics Ontario Liberals raised at least $400,000 from subsidized firms

Ontario Economic Development Minister Brad Duguid makes an announcement at a Toyota plant in Cambridge, Ont., on July 31, 2015. Toyota contributed $44,145 to the Liberals from 2005 to 2015.

Aaron Lynett/THE CANADIAN PRESS

Companies that received corporate welfare from the Ontario government have given the ruling Liberals at least $400,000 over the past decade.

A Globe and Mail review of Elections Ontario records shows some of the biggest recipients of taxpayer subsidies – including Cisco Systems, the Ford Motor Company, Toyota and Linamar – helped fill the governing party's campaign war chest both before and after those companies got their cheques from the province.

The findings come amid a cash-for-access controversy at Queen's Park. The Globe reported last month that the Liberals held small, unpublicized fundraisers in which corporations, lobbyists and others paid thousands of dollars for access to Premier Kathleen Wynne and her cabinet.

Story continues below advertisement

The Premier has promised to ban corporate and union donations, and ordered her ministers to cancel fundraisers. But Progressive Conservative Leader Patrick Brown is calling for a public inquiry into whether any donations were tied to government contracts for companies. As well, NDP deputy leader Jagmeet Singh has called in the province's integrity commissioner to determine if one of the Liberal fundraisers broke ethics rules.

The latest revelations also revive questions about the Liberals' corporate subsidy program. The government is banking on its $2.7-billion Jobs and Prosperity Fund to attract new companies to Ontario and keep older ones from leaving. But critics argue the Liberals have not proven the subsidies are actually helping the economy. And last fall, an audit found 80 per cent of the money has gone to companies hand-picked by government behind closed doors with no published criteria.

Economic Development Minister Brad Duguid, who oversees the subsidy system, denied giving money based on donations. But he conceded the optics of raising funds from corporations while giving them handouts are not good.

"When these questions come up, there may be perception issues. And that's why it's so important that we move forward, as the Premier's moving forward, to ensure that these questions can't be raised in the future, by banning corporate and union donations to political parties," he said in an interview. "There is no decision I have made that in any way was influenced by political donations or politics in general."

Cisco Systems, an information technology company, has made two deals with the Ontario government, in 2011 and 2013, for a combined $245-million worth of subsidies to expand its work force.

In total, Cisco has donated $63,250 to the Ontario Liberal Party over the past four years. The contributions started on Aug. 17, 2012, with a donation of $15,000. On Nov. 1, 2013, a little over a month before the second subsidy deal was announced, Cisco gave $7,000. Cisco donated a total of $23,750 in 2014 and $17,500 last year. The company also donated more than the $9,975 annual cap on several occasions using by-elections and the 2014 general election to give more.

Karin Scott, Cisco Canada's director of communications, did not answer directly when asked if the company's donations to the Liberals helped Cisco get subsidies. She contended that the company's presence in Ontario is helping build the province's innovation economy. Among other things, she said, Cisco has set up a $150-million fund for investing in technology infrastructure and start-up companies, and runs a network of training centres for IT workers.

Story continues below advertisement

"Cisco has the ability to place R&D teams anywhere in the world – with varying cost and opportunity considerations. Cisco chooses to invest in Canada and Ontario due to its collaborative governments, stable economy, distinguished educational institutions, skilled workforce and progressive immigration policy," Ms. Scott wrote in an e-mail.

The Ford Motor Company has given the Liberals $142,715 since 2005. The company received a $71-million grant from the province in September, 2013, to renovate its assembly plant in Oakville, Ont.

Ford has regularly donated the maximum amount allowed. In 2013, the company gave $16,150 to the Liberals, including what was then the maximum donation during a by-election that summer. The $9,300 cheque was deposited on July 8, two months before the government grant was announced. The next year, the company gave $25,925, including the maximum donation ($9,975) during a by-election that February, the maximum again for the regular annual period and a further $4,925 during the general election that spring. The company also donated the maximum in 2012 and 2011, and during a 2009 by-election.

Ford spokeswoman Kerri Stoakley replied "no" when asked if the donations and the subsidy were connected.

"As a major employer in Canada we meet with all levels of government on a regular basis to discuss a variety of topics. As a non-partisan company, we attend political events in Ontario with all three main political parties," she wrote in an e-mail.

Linamar, an auto parts manufacturer based in Guelph, Ont., gave $98,165 between 2005 and 2015. The company received $1.5-million in September, 2013, to help develop "a new marine engine component."

Story continues below advertisement

Toyota contributed $44,145 to the Liberals from 2005 to 2015. The company got $42.1-million in July of last year to upgrade equipment at its Cambridge plant and expand production at its Woodstock facility.

Linamar and Toyota did not respond to requests for comment.

Other companies gave smaller amounts. Open Text, which received a $120-million grant in 2014, gave $24,900 to the Liberals from 2007 to 2011; Honda, which got $85.7-million, gave $9,920; Sandvine Inc., which got $15-million, gave $5,000; Conestoga Meat Packers, which got $1.5-million, gave $5,000; Grand River Foods Ltd., which got $1.3-million, donated $10,500; Moulure Alexandria Moulding got $638,350 and donated $5,700; Brick Brewing Company Limited, which received $357,959, gave $8,220.

In total, the Liberals have raised at least $412,765 from companies they gave subsidies to. Most also donated smaller sums to the Progressive Conservatives or NDP.

Most companies that donated to the Liberals also gave smaller sums to the opposition Progressive Conservatives or New Democrats. Out of 16 companies that received grants from the Jobs and Prosperity Fund, seven donated to the Liberals. Out of the roughly hundred that got money from two smaller funds – the Southwestern Ontario Development Fund and the Eastern Ontario Development Fund – six made contributions to the Liberals.

Mr. Duguid maintains that impartial civil servants evaluate which companies should get the money, and that he always abides by their advice.

Story continues below advertisement

"No. No," he said when asked if he or his staff had ever leaned on subsidy-receiving companies to donate. "We have a very strict process to consider these applications."

Last December, Auditor-General Bonnie Lysyk found the province gave out 80 per cent of corporate subsidies to companies it invited to apply, with no public application process or criteria. She also found the government did not know whether the subsidies were working.

"The Ministry of Economic Development, Employment and Infrastructure has not attempted to measure whether the $1.45-billion in grants and interest-free loans it has provided to businesses since 2004 has actually strengthened the economy or made recipients more competitive," Ms. Lysyk told reporters at the time.

The Cisco subsidies were particularly contentious in this regard.

Economist Mike Moffatt, an assistant professor at the University of Western Ontario, argued after the second deal was announced that the 1,700 jobs Cisco promised to create would not lead to more employment. That's because most of the jobs are targeted at Ottawa's high-tech sector, which already has an unemployment rate of less than 3 per cent, meaning the jobs would go to high-tech workers who would otherwise have been hired at other companies, he contended.

"This is acting as a wage subsidy to high-income workers, paid for by the general population," Prof. Moffatt wrote in Canadian Business.

Story continues below advertisement

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter