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Democracy without a cover charge: Improving election financing in Ontario

Democracy without a cover charge: Improving election financing in Ontario

We the North
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A submission to the Standing Committee on General Government’s public hearings on Bill 201, Election Finances Statute Law Amendment Act, 2016

Introduction: In search of a government powered by public support, not private money

“One person, one vote. Government that reflects the will of the majority. These principles are at the core of our democratic system. But the transfer of favours for donations exposed in the media coverage of cash-for-access dinners and fundraising quotas to Liberal cabinet ministers threatens public faith in these principles.

When corporate elites are caught buying access to decision-makers with $10,000-a-plate dinners, what citizen can truly believe that her government cares about her opinion?”

Warren (Smokey) Thomas
OPSEU President

Our democratic system is founded on the principle of one citizen, one vote. For this system to work properly, and for the public to have faith that electoral outcomes accurately reflect the will of the public on the major issues of the day, the public must believe that this principle holds, and that no individual or organization, no matter their wealth, has the ability to tilt the balance in their favour.

Unfortunately, recent news has shaken the public’s faith in this equality of access and influence. Cash-for-access fundraisers, widely reported in the press, have raised concerns about the purchase of access to decision-makers by those able to afford contributions far beyond the reach of the majority of Ontarians. Similarly, annual fundraising quotas for Liberal cabinet ministers have created questions in the minds of the public about whether such conditions foster a greater willingness on the part of decision-makers to trade government benefits for partisan contributions.

It is in this context that Bill 201 is introduced. Through this legislation, the government has the opportunity to restore public trust by building a system that safeguards equality of access and influence, creates a level playing field for all parties, candidates and voters, and ensures sufficient funding for parties to free them from the influence of “big money” donations.

The proposed legislation contains a number of steps in the right direction, and represents a real effort to achieve these goals. In several ways, however, it falls short of what is needed. At the same time its limits on third-party involvement in public debate represent a significant overreach with potentially dire consequences for community-minded citizens across Ontario.

In response, OPSEU makes the following six recommendations:

  • Recommendation 1: Create a level playing field by setting a donation limit that the majority of Ontarians can actually afford.
  • Recommendation 2: Fund parties through a public financing system that lets people support the party they choose, not the party they chose.
  • Recommendation 3: End cash-for-access fundraisers by preventing those who donate to political parties from benefiting from their donations through government contracts, grants or tax breaks.
  • Recommendation 4: Don’t put a chill on speech – allow third parties to talk about public issues during the pre-writ period.
  • Recommendation 5: Distinguish between freedom of the press and the interests of the corporations that own the increasingly-concentrated media outlets.
  • Recommendation 6: Allow people to make decisions based on the issues, not the horse race, by banning the publication of opinion polls during the last two weeks of the campaign.

These six recommendations represent proposals for addressing both the areas where the legislation falls short of its goals, and the one area in which it reaches too far. As the committee continues to review and revise this bill, it is OPSEU’s hope that these principles of equality of access, equality of influence, and the need for a level playing field will be kept front of mind, and that in this way, the trust of the public in the integrity of the democratic system might be restored.

Recommendation 1: Create a level playing field by setting a donation limit that the majority of Ontarians can actually afford.

“What should matter to parties is what’s in my head, not what’s in my wallet.”

Gareth Jones, Brockville
OPSEU Regional Vice-President (Region 4)
Presentation to the Standing Committee on General Government,
June 28, 2016

A level playing field, both for parties and for the citizens who wish to see their desires implemented in public policy, requires a system with equality of access and influence at its core. It is this equality of access and influence that is in question in Ontario today. This is understandable. When wealthy individuals with vested interests have the ability to regularly make donations that far exceed the reach of the vast majority of citizens, it is hardly surprising that the public begins to question whether these outsized donations lead to outsized influence with the parties receiving them.

In theory, whether a member of public can only afford to donate $10 to the MPP in their riding, or has the means to make a donation of $10,000 should have no impact on their ability to access, or influence, their representative. In practice, however, the current rules on donations spawn a system of high-priced fundraisers that represent anything but equal access.

While the provisions in Bill 201 make a show of taking action to lower the individual donation limit, they do little to address the underlying problem. The individual limit is reduced to $1,550, but by maintaining the ability of individuals to make that $1,550 donation five times (to a central party, two constituency associations and two candidates), the resulting annual limit remains $7,750, or even higher in years with by-elections.

With Ontario’s median income in 2014 a mere $32,380, it’s clear that this limit remains at a level far beyond the reach of all but the wealthiest few. With the rising cost of campaigning only increasing the need for parties to fundraise, the unfortunate result is a prioritization of attention to the needs and interests of those able to make such donations, and a simultaneous sidelining of those with lesser means.

OPSEU recommends instead that the system be improved by restricting donation limits to a level that the majority of Ontarians can reach, to ensure that those with greater means are not automatically assigned higher worth by parties attempting to fund their re-election campaigns.

This can be achieved by reducing the individual donation limit to $100 annually, to match the limit already in place in Quebec.

While this represents a significant shift from the status quo, the Quebec political system continues to function successfully under those limits. As well, recent examples, such as the Sanders campaign in the United States, prove that inspiring and well-financed campaigns can be run on average donations significantly lower than that figure. These examples show that the health of the democratic system is not reliant on the ability of wealthy donors to make extravagant contributions.

In fact, the opposite may well be true. The strength of the relationship between the Sanders campaign and its supporters suggests that donors may feel a greater sense of connection to a campaign when they feel that their contribution matters. By limiting donations to a level that allows everyone to participate, individual donors are more likely to feel that their support is valued. This is an important result in an age of increasing cynicism and voter apathy.

By restricting donation limits to a level that all can access, it is possible to remove the ability of wealthy donors to influence electoral outcomes, provide a greater equality of access, and ensure that a well-funded party is a reflection of the breadth of its support, not the depth of its donors’ pockets.

Recommendation 2: Fund parties through a public financing system that lets people support the party they choose, not the party they chose.

“When we find a way to fund the political process that doesn’t require parties to chase the donors with the deepest pockets, we allow parties to instead focus on winning support from the broadest cross-section of Ontarians.

We create a system where my support means the same as that of someone in a precarious, minimum-wage job, and theirs in turn means the same as someone making millions each year. And that should be our goal, shouldn’t it?”

Philip Shearer, London
OPSEU Executive Board Member (Region 1)
Presentation to the Standing Committee on General Government,
July 28, 2016

In order to remove the ability for wealthy corporations and individuals to exert influence over the election process, the funds currently provided to parties from these sources must be replaced through other means.

Public funding, a feature that exists in many jurisdictions across the country and around the world, plays a key role in reducing the influence of “big money” in politics. By funding the political process in a way that doesn’t require parties to compete for the attention of the wealthiest donors, parties are freed to focus on the more democratic goal of winning support from the broadest coalition of voters.

OPSEU supports the proposal to replace the funding of political parties by the wealthy with a system of public funding, but recommends that such a system be designed in a way that allows individuals to change their party support between elections. This is important both so that a victory in one election does not provide the incumbent with an unfair advantage going into the next election, and so that members of the public are not faced with the counterintuitive situation where their portion of public funding is supporting a party they may be actively campaigning to replace in the next election.

The per-vote funding model proposed in Bill 201, modeled after the recently-abolished subsidy at the federal level, fails to provide a means for individuals to register a change in support between elections. On the contrary, it sets up a situation where a victory in a particular election creates a built-in advantage in future elections through the delivery of additional funding, even after the party in question may have fallen out of public favour.

OPSEU recommends instead the implementation of a system that allows individuals to direct their per-voter funding to the party of their choice on their annual tax return.

Income tax returns already contain one option an individual can select that will have their information provided to Elections Canada, and a separate option that will designate a portion of their return to pay down the provincial debt through the Ontario Opportunities Fund. In a similar fashion, an option should be added that enables individuals to direct a share of a total of $10 over the course of the year to one or more political parties. Individuals could also choose to withhold funding entirely, or direct it to an independent candidate, who would receive the funds upon registering as a candidate in the next election.

The advantages of this public funding mechanism are significant. By giving the public the ability to shift their support between elections, parties will be encouraged to maintain the public’s support, even outside of the campaign period. As well, this system ensures that parties do not receive an additional incumbency bonus simply due to the results of the previous election.

Assuming that those choosing to allocate funds to parties will represent a similar proportion of the public as vote in a provincial election, this system would allocate approximately $48 million annually to political parties. This is relatively similar to the current funding level of political parties. As a point of comparison, during the period from 2012 to 2014, representing one electoral cycle of 2½ years, parties received approximately $98 million, as noted by the Chief Electoral Officer in his presentation to the committee on this bill.

A significant portion of the cost of this funding could be offset by ending partial campaign expense reimbursements to political parties and candidates, as well as eliminating the existing tax credit for donations. The latter, a regressive form of public financing of parties that pays out the largest tax credits to those who can afford to contribute the most, cost the public purse more than $13 million in 2014-2015 alone, and has the effect of amplifying the impact of those with the greatest means, while further marginalizing those with the least.

By comparison, a system which provides each member of the public with the ability to designate an equal share of the available public funding ensures that the support of each voter has an equivalent impact on the parties’ electoral chances. As a result, parties will be rewarded for their ability to reach the broadest cross-section of the voting public, rather than merely the wealthiest.

Recommendation 3: End cash-for-access fundraisers by preventing those who donate to political parties from benefiting from their donations through government grants, contracts, or tax breaks.

“Just after the first sale of shares, six members of the banking syndicate that made nearly $60 million selling off pieces of Hydro One showed up at a $7,500-a-plate dinner with the finance minister and the energy minister. Does anyone believe that this group of people just coincidentally chose that moment to have an expensive dinner together and talk about the Jays’ playoff run?”

Carl Thibodeau, Thunder Bay
OPSEU Regional Vice-President (Region 7)
Presentation to the Standing Committee on General Government,
July 26, 2016

The hasty introduction of Bill 201 was the direct result of justifiable public outrage over media reports of fundraising quotas assigned to cabinet ministers, and the significant growth of cash-for-access fundraising by the Liberal government. These reports quite understandably raised questions over the influence and access handed to ministerial stakeholders by such fundraisers, where $10,000-a-plate intimate dinners placed lobbyists and cabinet ministers in close proximity behind closed doors, while those who couldn’t afford the price of admission were left out in the cold.

In one case, six members of the banking syndicate that received $60 million in compensation for the sale of a portion of Hydro One, were found to have paid $7,500 each to attend an intimate dinner with the finance and energy ministers only days after the first sale of shares. In other cases, the construction companies receiving billions of dollars in public money to build infrastructure such as hospitals, roads, transit and courthouses paid as much as $10,000 for tickets to intimate gatherings with the Premier or cabinet ministers responsible for allocating these funds. While not currently illegal, these gatherings certainly create the perception of unethical dealings.

Unfortunately, while Bill 201 may have been the result of coverage of these questionable fundraising tactics, it contains little in the way of provisions to alleviate public concerns. Instead, the bill appears to simply offer a discounted ticket price for stakeholders, as it slightly reduces the amount that can be donated by any individual, while allowing cash-for-access fundraising to continue.

OPSEU believes that any electoral finance reforms must include a clear mechanism to prevent such conflicts of interest from occurring, including provisions to ensure that no wealthy individual or corporation can benefit from the public purse as a result of donations made to the governing party.

To do so, OPSEU recommends that similar restrictions to those that exist in many jurisdictions in the United States be adopted, to address the issue of what they term pay-to-play donations. These rules restrict those who donate to political parties from receiving benefits in return in the form of government contracts, grants, or targeted tax breaks. In this case, it is recommended that no individual, association, or corporation that donates to a political party be allowed to receive such benefits for a period of four years, long enough to ensure that donations made in a campaign cannot be ‘paid back’ by a winning party during the electoral term. Such a restriction will provide clarity and peace of mind for all involved.

Currently, cases such as that of Greenfield Specialty Alcohol, a company which has received more than $163 million in subsidies from the provincial government over the past decade, while donating $480,000 to the Liberal party over the same period, have conspired to create a public perception of corruption. However, when confronted on these cases by the media, Premier Wynne has suggested that these donations represent nothing more than a corporation with a desire to support the democratic process. If this is true, the simple change of removing the ability of corporations to benefit from the donations they make will free them to continue to support the democratic process with no further danger of the public perceiving this as inappropriate or unethical.

Recommendation 4: Don’t put a chill on speech—allow third parties to talk about public issues during the pre-writ period.

“Do we really want to pay for Elections Ontario investigators to chase down receipts from everyone who holds a rally in the public square? Do we truly believe that groups of parents who want to save their school, or groups of seniors running a letter-writing campaign to raise awareness about the underfunding of long-term care homes are the groups that have too much influence in our province?”

Sara Labelle, Oshawa
OPSEU Regional Vice-President (Region 3)
Presentation to the Standing Committee on General Government,
June 27, 2016

While a large part of Bill 201 is focused on contribution limits, political party financing, and limits on the spending of parties during the writ and pre-writ periods, it also includes limits on third parties in the areas of both electoral advertising and issue advertising.

This is understandable, as there is no desire to create a system in Ontario like that unleashed by the Citizens United ruling by the Supreme Court of the United States. In the wake of this ruling, a growing number of third-party Political Action Committees are now undertaking ad campaigns targeting specific candidates that vastly outweigh the advertising done by campaigns themselves.

Concern over the risk of this spilling over into Ontario is reasonable. In the absence of clear restrictions, wealthy corporations and individuals who face limits on their ability to influence electoral outcomes through contributions to political parties may be tempted to do indirectly what they can no longer do directly. But while the cause is noble, the restrictions proposed in Bill 201 go too far, creating a chill on the ability of community groups and citizens to speak up about issues in the public interest.

After all, while the mention of third-party advertising may conjure up images of American political campaigns, where shadowy groups of wealthy individuals spend millions on television ads to smear candidates, the truth is more complicated. In reality, any intervention into the public sphere by a group of citizens not representing a political party qualifies as third-party involvement.

These interventions are an essential part of any healthy democracy. Citizens who offer their own time and resources to raise a public issue for debate should be applauded, not face more barriers to participation. Such interventions are an important reminder that the political system doesn’t just belong to the professional spin doctors and party workers, but also to the mothers, husbands, grandparents and children who care enough to speak up.

Even Ontario’s Chief Electoral Officer, when appearing before the committee, argued on this topic that issue-based advertising not be included under the definition of political advertising between elections. OPSEU agrees with the Chief Electoral Officer that this bill must allow for citizens, community groups, and third party organizations to speak up about the issues that may impact their members and the wider public. After all, OPSEU has a strong tradition of participating in such campaigns – campaigns that are not designed to elect a particular party, but to raise the profile of an important public issue.

A selection of the campaigns that OPSEU has participated in this year include:

  • working with eight outside organizations to hold a conference to bring together researchers looking at the health impacts of alcohol use to help the province make informed decisions on alcohol sales, knowing both the revenues and health costs associated;
  • joining parents concerned about the potential impacts of losing funding for treatment for their autistic children;
  • continuing to call for concrete action to close a gender wage gap that has seen little movement over the past few decades; and
  • working to raise awareness about the needs of workers diagnosed with PTSD as a result of their work.

In some cases, these campaigns have led to legislative changes or improved workplace conditions. In other situations, they have simply added important new perspectives to the public conversation around an issue. While the outcomes of these interventions vary, all provide clear evidence of the importance of this type of public discussion and debate for the wider political system. Yet under the current design of Bill 201, all would be restricted if an election was scheduled within the six months following.

This must be changed, as to do otherwise would be a disservice to our democracy. While a case can be made for setting a limit on third-party advertising that directly advocates for or opposes a particular party, candidate, or leader, no such limit should be placed on advertising that references issues of public interest, simply because at some point a political party or candidate may choose to take a stance on these issues.

A further concern is that while the bill puts severe limits on the ability of community groups to speak out, it contains no such limits on government-sponsored advertising. Such advertising should be restricted, particularly in advance of an election period. The rules in Manitoba, which limit advertising by the government for several months ahead of the election should serve as a model for such restrictions. Under the terms proposed in this bill, the government is permitted to use the public’s money to tell the public what to think, but members of the public are forbidden to use their own money to make an opposing case.

Recommendation 5: Distinguish between freedom of the press, and the interests of the corporations that own the increasingly-concentrated media outlets.

“If freedom of political communication only applies to those who own the presses, we have a problem.”

Warren (Smokey) Thomas
OPSEU President

Bill 201, in its current form, creates an exemption for media corporations from the spending limits placed on all other organizations. This rightly recognizes that the media play an important role in holding government to account and ensuring the public remains able to make informed decisions at the ballot box. In fact, the genesis of this bill can be found in the work of journalists from a number of media outlets to expose the expansion of questionable cash-for-access fundraising practices on the part of the Liberal government.

However, there is a question as to whether the complete exemption provided in this bill properly considers the limits necessary in the context of increasing concentration of media ownership, where, for example, the vast majority of newspapers in the province are owned by a handful of corporations. If we as a province are concerned with limiting the ability of corporations to buy elections, by setting reasonable limits on their spending, should the mere fact that a corporation owns a printing press give them an automatic exemption to these spending limits?

Freedom of the press is a foundational democratic principle, and should not be limited. This means that government is correct to not restrict journalistic coverage, where we rely on the integrity and professional standards of journalists to deliver unbiased reporting. The question here, however, is where the line should be drawn between journalism and advertisement. In the case of editorial endorsements, for example, special consideration needs to be given to whether these should be considered third-party advertisements on the part of the corporation that owns and directs such endorsements.

The most recent federal election gives a useful case in point. In the final days of the 2015 election, all newspapers in the Postmedia chain ran endorsements of the federal Conservative party at the direction of Postmedia executives. If an equivalent amount of space was purchased, it might well exceed the limits for third-party advertising. Moreover, in this case, in addition to publishing an endorsement, the chain went so far as to prevent the editor of editorials and comments at the National Post from publishing a dissenting column critical of the Conservatives to ensure that a single message was clearly communicated.

In such a case, when a single media corporation can deliver a direction on how voters should cast their ballot to millions of households in media markets across the country, should that not be considered an advertisement in the same way as if any other corporation has paid to reserve that space for a similar advertisement? It is OPSEU’s recommendation this committee consider carefully how a distinction might be drawn between freedom of the press, which must be preserved, and the ability of a single corporation to promote its own interests through the media outlets it owns.

Recommendation 6: Allow people to make decisions based on the issues, not the horse race, by banning the publication of opinion polls during the last two weeks of the campaign.

“If we already know that the publication of opinion polls has an undue influence on voting behaviour on Election Day, why not limit the publication of polls even further?

Just imagine what election campaigns might be about if it became impossible for news outlets to turn them into horse races.”

Warren (Smokey) Thomas, Kingston
OPSEU President

Around the world, many countries limit the publication of opinion polls in the lead-up to Election Day. Such limits are widespread, with a 2012 study out of the University of Hong Kong that looked at restrictions on the publication of opinion polls finding that 38 of 83 countries surveyed, or 46 per cent, had restrictions in place.

The length of ban varies, with some countries banning the publication of opinion polls for as many as 45 days before Election Day, while others ban publication during the week before voting, or only on Election Day itself. Despite these varying lengths, the prevalence of the existence of such a ban suggests widespread agreement on the fact that such polls can have an undesirable impact on the decision-making of voters. Parties seen to be trailing in the late stages of a campaign may find their vote suppressed further, while those rising in the polls (even within a poll’s margin of error) may be perceived to have political momentum. The result in either case may be an electoral outcome that fails to truly represent the preferences of the voting public.

Beyond the unfortunate degree to which such polls focus voter attention on the popularity of parties rather than their positions on the issues, there is also the risk posed by inaccuracies in polling. Recent examples like the 2012 Alberta election, the 2015 United Kingdom election, and the recent Brexit vote have demonstrated that even the most reputable pollsters can fail to capture public sentiment accurately.

In such cases, voters may be influenced to cast their ballot based on incorrect predictions. Increasing the length of time between the final published poll and Election Day will require voters to treat polls with more caution, and reduce the likelihood of voters assuming that these polls provide them with an accurate picture of the electorate’s voting intentions.

In order to limit the negative impacts of opinion polls, and their ability to unduly influence voting decisions, OPSEU recommends that Ontario follow the practice of a number of other democratic countries and ban the publication of these polls during the last two weeks of the writ period. This will encourage voters to make a decision based on the position of parties and candidates on the issues that matter to them, rather than their relative position in particular surveys, which may not even reflect the positions of candidates in the voter’s own riding. It will also have the benefit of freeing up space for the media to report on the issues of the campaign, rather than merely focusing on the horse race.

Conclusion: A system for everyone

In the end, the credibility of our democratic system and of its assertion that the decisions of the government reflect the will of the majority, depends on the premise that all citizens’ voices are equal, and that majority support for a government represents the support of the majority of voters, not the majority of the wealth.

Increasing inequality, and the growing gap between the wealthy elite and the remainder of the public, represent significant challenges to the existing system. In this context, it is more important than ever to ensure that the system is designed in such a way as to withstand any attempts by elites to influence outcomes in ways that further their own interests, as opposed to the best interests of the province as a whole.

The six recommendations laid out above represent means of promoting that equality of access and influence, while continuing to ensure that community voices are not silenced in the process. This is no small endeavour, but the importance of the outcome is well-worth the effort required. Through these changes, the government can restore public trust in the electoral system and ensure that parties have sufficient resources to serve their role as both the representatives of the electorate and the source of policy solutions to provincial challenges. It can also guarantee the level playing field for parties and voters that the system requires to function properly.

Download a copy of OPSEU's submission