NDP moves to eliminate corporate and union donations

BY BILL PHILLIPS

bill@pgdailynews.ca

Taking big money out of provincial politics has been one of the most bandied about issues in Victoria over the past few years.

The NDP, when they were in opposition, brought the issue forward six times only to have private members' bills defeated by the then-governing Liberals who scoffed at the idea of campaign finance reform. That stance softened when it appeared that they were on the wrong side of the electorate and it could be an issue in the May 9 election.

In June, before the Liberal government was official toppled by the NDP/Green alliance, the Liberals tabled a bill to ban corporate and union donations, only to have it defeated by the new alliance. Last week Liberal MLA Andrew Wilkson tabled a private members' bill calling for the elimination of corporate and union donations. It didn't go anywhere.

Today, the NDP have brought forward legislation calling for the elimination of union and corporate donations.

“We’re reforming campaign finance rules to make sure government’s actions and decisions benefit everyone, not just those with deep pockets,” said Premier John Horgan.

“This legislation will make sure 2017 was the last big-money election in our province,” said Attorney General David Eby. “The days of limitless donations, a lack of transparency and foreign and corporate influence over our elections are history.”

Not surprisingly, there isn't much difference between the two parties' proposals:

• - End corporate and union donations
• - Limit individual contributions to $1,200 a year, the second-lowest limit in Canada
• - Ban out-of-province donations
• - Cap contributions to third-party election advertisers
•  - Require ongoing public reporting of all fundraisers attended by major party leaders, cabinet ministers and parliamentary secretaries, including those held in private residences
• - Reduce campaign spending limits for candidates and political parties by about 25%
• - Set new fines and penalties for contraventions of election financing and advertising laws

• - A ban on corporate and union donations, including donations in kind, to political parties, their candidates and constituency associations.
• - A ban on foreign donations, with the requirement that only individuals residing in British Columbia and who are Canadian citizens or permanent residents are eligible to donate.
• - A maximum annual contribution limit of $2,500 for individuals to any one political party, and up to $2,500 to a party’s candidates and constituency associations (for a total allowable annual limit of $5,000 per year).
• - Loans and guarantees to political parties and candidates must be only by a Canadian chartered bank or credit union at a fair rate of interest.

“These unprecedented changes will not only end the ‘wild west’ of campaign fundraising, they are an important step in modernizing our democracy,” Eby said.

The bill contains several transitional provisions, including restrictions on the use of contributions received before the legislation comes into force. Political contributions previously collected that are not allowed under the new rules – including prior donations from unions and corporations or funds collected from a person in excess of $1,200 – cannot be used in future elections.

The Election Amendment Act, 2017, also introduces a transitional annual allowance for political parties over a set term of five years. The allowance diminishes in value over time and is intended to help political parties transition to the new campaign finance rules. A special committee of the legislature will review the allowance to determine if it should be continued. If no action is taken, the allowance will expire in 2022.

The legislation

• Political contributions:
  • Restricted to individuals who are residents of British Columbia, who are Canadian citizens or permanent residents.
  • Annual limit of $1,200 in combination to a political party, its candidates, nomination contestants and registered constituency associations.
  • Separate limit of $1,200 to leadership contestants in relation to a leadership contest. Note: This limit does not apply to the ongoing BC Liberal leadership race.

• Union and corporate contributions:
  • Political donations from any corporation, organization or union will no longer be permitted.
  • Parties will not be allowed to use the funds received previously from such organizations in any future election.

• Contributions to third-party election advertisers:
  • Same-source restrictions and limits as for political parties: annual limit of $1,200 from individuals who are residents of B.C., who are Canadian citizens or permanent residents.
  • For consistency with political organizations’ limits and to enhance effectiveness of restrictions, the definition of contributions to third parties is expanded to include contributions of property and services in addition to monetary contributions.
  • Only applies to contributions specifically for the purpose of sponsoring election advertising.

• Loans and guarantees:
  • Must be from savings institution and not less than prime rate.
  • This is in relation to parties, candidates, constituency associations, leadership contestants, nomination contestants and third-party sponsors.

• Fundraising functions:
  • Prohibited from taking place in private residences if they are attended by major party leader, cabinet minister or parliamentary secretary, and if charge to attend is more than $100. Note: Major party means a party that has an elected MLA or ran candidates in at least half of B.C.'s electoral districts.
  • Parties, candidates, leadership contestants and constituency associations must provide a minimum of seven days advance notice of fundraising functions to chief electoral officer if the fundraising function will be attended by a leader of major political party, cabinet member or parliamentary secretary.
  • Required information includes: date, time, location, host, ticket price, which major party leader/cabinet member/parliamentary secretary scheduled to attend.
  • Chief electoral officer will publish this information on Elections BC website in advance of the function.
  • For privacy reasons, host name and location will not be published if in a private residence.
  • No later than 60 days after the function, the chief electoral officer must be provided with the names of the leader/cabinet member/parliamentary secretary who actually attended, number of tickets sold and  amount of political contributions raised, which will also be published on the Elections BC website.

• Election expense limits:
  • Expense limit for parties and candidates is reduced by about 25%.
    • Party limit is $1.16 multiplied by the number of registered voters in all electoral districts when an election is called (limit for 2017 general election would have been about $3.66 million,  rather than about $4.88 million);
    • Candidate limit is a flat $58,000 in all districts (down from about $78,000).

• Annual allowance for political parties:
  • To qualify, parties must receive at least 2% of provincewide vote or at least 5% of total number of votes in districts where they ran candidates.
  • Per-vote allowance intended to assist in transitioning to new contribution rules:
    • 2018: $2.50/vote
    • 2019: $2.25/vote
    • 2020: $2.00/vote
    • 2021: $1.75/vote
    • 2022: $1.75/vote
  • Special committee of the legislative assembly to be appointed to review allowance and report to legislature if it should be continued, and if so, at what rate and for how long. Note: If no action is taken by the special committee and no amendments are made to the act, the annual allowance expiries in 2022.

• Election expense reimbursement:
  • Parties must receive at least 10% of provincewide vote and candidates must receive at least 10% of vote in their electoral district.
  • 50% of eligible expenses will be reimbursed.
  • Parties and candidates are reimbursed only for expenses actually paid for and not for property or services donated to campaigns.

• Third-party sponsors of election advertising:
  • Third-party sponsors must obtain contributor confirmation of eligibility and consent to use funds to sponsor election advertising before using contributions.
  • Maximum of $1,200 in contributions per year, per individual, may be used by third-party sponsors to sponsor election advertising.
  • Third parties, who may be ongoing entities with broader interests than just sponsoring election advertising, will not be restricted from using contributions for purposes other than election advertising.
  • If a third party sponsors election advertising (one or more advertisement) with a total value greater than $10,000 during the pre-campaign period or campaign period, it must disclose sponsorship contributions within 14 days of receiving them and must have its post-election disclosure report audited.
  • If a third party receives more than $10,000 in sponsorship contributions, it must have a dedicated bank account.
  • There are new rules for third-party advertisers during a 60-day, pre-campaign period in advance of a scheduled general election:
    • They must register with Elections BC and file a financing report if they engage in direct election advertising during pre-campaign period;
    • Direct election advertising means advertising that explicitly supports or opposes a political party or candidate by using their name, likeness or logo;  does not include advertising that only addresses political issues; and
    • The existing definition of election advertising, which includes issue-based advertising, will continue during the campaign period.
  • No spending limits for third parties during the pre-campaign period; existing spending limits during campaign period will continue.

• Monetary penalties:
  • New monetary penalties may be imposed by chief electoral officer for contraventions of election financing and election advertising provisions (e.g., a penalty of two times the amount of the political contribution made other than by an eligible individual; a penalty of two times the amount the political contribution exceeds the specified limit for making a political contribution).
  • New penalties complement existing offences and are intended to ensure consequences for non-compliance even when a prosecution for an offence may not be appropriate.

• Implementation:
  • The effective date for implementation will be the date of Royal Assent with the following exceptions:
    • The individual contribution limit of $1,200 comes into effect Jan. 1, 2018;
    • The provision that there must be a minimum of seven days’ advance notice of fundraising functions to the chief electoral officer if the function will be attended by the leader of a major political party is effective on the date after first reading of the bill, but does not apply to functions that were publicly announced prior to that date; and
    • The provision requiring third-party advertisers that spend more than $10,000 to report sponsorship contributions within 14 days of receiving them would come into force in the future by regulation of the lieutenant governor in council.  
  • The bill also contains several transitional provisions, including restrictions on the use of contributions received before the bill comes into force. 
  • Specifically, prior political contributions and third-party sponsorship contributions that are not in accordance with the new rules cannot be used in future elections.