Open Letter - Municipal Elections Act Reforms - MPP Yasir Naqvi

UPDATE: My open letter was forwarded to Minister McMeekin. I received a response from him on May 6th. It's appended at the bottom of this page. I haven't heard of any official process for participating in the consultations. In the mean time, I'm sure your thoughts on this topic are welcome at the Ministry's email address: minister.mah@ontario.ca


Hello Yasir,

As you know my overall preference would be for corporate and union donations to be banned from contributing to municipal campaigns. However, in the event that change is not being contemplated within the current review of the Municipal Elections Act, I would like to offer the following suggestion to improve transparency and accountability under the current regime.

Section 72: Associated Companies

It has become plain to me that relying on Section 256 of the Income Tax Act to define "associated companies" results in zero transparency. It is my recommendation that the Municipal Elections Act be updated to define, for itself, and in plain terms, what "associated companies" are. 

The definition should be simple enough to allow a regular member of the public to confirm whether any two companies are associated, at no cost, using only already available public information.

Section 256: Discovery of Share Ownership in Private Corporations

To a lay person, two companies with similar board and management compositions are plainly associated. However, in the only example I could find, a court ruled that similarity is not enough to prove association.

In "Regina vs. Tender Choice Foods" (1: Hamilton Spector story; 2: court ruling; see PDFs), the judge ruled that a prosecution can only succeed once the required share ownerships are proven. Without share ownership evidence, the tests under Section 256 are not met, and the corporations remain "unassociated" and can each donate $750 to the same candidate and $5000 to candidates for the same local board.

To my knowledge, there is no way to find share ownership information from a government source. 

I hope you will agree that expecting private citizens to not only review all corporate donations for similar management/board compositions, but then also expecting private citizens to perform discovery on share ownership - possibly via queries to the corporations themselves - is unreasonable. It is effectively impossible.

The current regime can only result in zero enforcement of excessive donations from associated corporations.

A plain definition of "associated companies", expressed within the Ontario Municipal Act itself, is a viable remedy to the complex requirements expressed in the current federal law. It is my position that it is the Government of Ontario's duty to make enforcement of campaign finance laws at least possible.

Public Prosecutor's Office

There appears to be no one government agency responsible for prosecuting campaign violations from donors, as opposed to the Campaign Audit Committees enabled under the act to enforce violations by candidates.

Myself and several volunteers have compiled a database of donations to the City of Ottawa election in 2010 and 2014. Setting aside the added burden of proving association among corporate donors, there is at least one instance in 2014 of what appears to be a single corporate contributor exceeding the $5000 maximum total donation.

I have already found multiple instances of individuals, single corporations, or potentially associated companies, exceeding the $5000 donation cap. Who's responsibility is it to enforce the $5000 contribution limit to a local board? Surely it is not my responsibility.

I would suggest that the Municipal Elections Act be updated to require the Compliance Audit Committee to review all contributions made to a local board to ensure no single contributor exceeds the $5000 cap, or $750 limit to individual candidates.

Combined with a plain-language definition for "associated companies", a Compliance Audit Committee would be an effective auditor for the entire act. In cases where the committee discovers violations - either by candidates - or by donors, it can forward those findings to the Attorney General for prosecution.

At minimum, the presence of an effective auditor - for personal and corporate donations - may put an end to violations in the first place.

Summary

Thank you for your time and attention on this matter. I hope the current government will take an opportunity to improve the campaign finance elements of the current act.