The Progressive Conservatives appear to have flung open a backdoor way for unions and corporation to bankroll political parties with a loosening of campaign finance laws.
In the government’s fall economic statement, Finance Minister Vic Fedeli unveiled changes to election fundraising laws that the previous Liberal government had tightened after a Star probe in 2016.
“There will still be no corporate donations, there will still be no union donations,” Fedeli maintained Thursday.
However, buried deep in the 176-page Restoring Trust, Transparency and Accountability Act, some loopholes have been reopened — perhaps inadvertently — just two years after they were closed.
Fedeli has repealed a key section of the electoral finance reform bill that forced donors to “certify, in a form approved by the Chief Electoral Officer, that the person has not acted contrary” to the ban on unions or corporations making donations in the name of members or employees.
“It’s a loophole you could drive a Brink’s truck through,” said one veteran Conservative fundraiser, who spoke on condition of anonymity because of his standing in the party.
A Liberal fundraising expert agreed Friday the change is something that all political parties could exploit.
“If you don’t fill out a disclosure form, then what’s to stop a corporation donating on your behalf?” the Liberal said.
“It was the only thing in the act that required any threshold of activity on behalf of a donor to prove that a corporation wasn’t funnelling money through the backdoor,” the Grit added.
“I honestly don’t believe it was inadvertent — they just thought nobody would notice. What’s the public policy rationale for getting rid of the declaration?”
Premier Doug Ford’s office emphasized that “accepting money from a corporation or union and donating it as an individual would still be illegal,” but filling out the disclosure form was a nuisance.
“We think this requirement creates a barrier to lawful donations by placing an undue burden on contributors. But, it is important to understand that it would remain unlawful to donate funds that are not your own,” said Ford’s office.
“We would merely no longer require people to certify they are acting lawfully.”
The Tories’ changes match existing federal campaign laws.
But in the 2016 legislation, the Liberal government decreed donors would have to certify in writing that they did not donate “funds that do not actually belong to the person; or any funds that have been given or furnished by any person or group of persons or by a corporation or trade union for the purpose of making a contribution.”
Once the changes pass, a union or company could theoretically skirt the ban on making direct contributions by illegally giving members or employees cash that could then be donated.
Fedeli’s reforms will also end the public $2.71 per-vote subsidies for political parties in time for the 2022 election.
The governing Tories currently receive $6.3 million annually while the NDP gets $5.2 million, the Liberals about $3 million and the Greens around $700,000.
“It shouldn’t be a burden on the taxpayer,” the treasurer said Thursday when he also announced donation limits would rise to $1,600 from $1,200 within two years.
As well, all MPPs and staff will again be allowed to attend political fundraising events.
Privately, some Liberals, who had opposed Wynne’s reforms, are delighted that Fedeli is liberalizing campaign-finance laws.
By retaining the annual public subsidy until the next election, the finance minister has given the decimated Grits, who have a $10 million campaign debt, a chance to rebuild.
“The subsidy staying in place is huge for us,” said a senior Liberal, speaking on condition of anonymity in order to discuss internal party matters.
Fedeli’s bill also raised the threshold of “recognized party” in the legislature to 12 MPPs from the current eight.
The Liberals were reduced to just seven seats — one shy of official party status in the house — in the June 7 election after almost 15 years in power.
Because raising the bar to 12 makes it unlikely the party can qualify for the additional funding and staff before the 2022 election, the Tories have inadvertently made it easier for Wynne, still the MPP for Don Valley West, to step down.
“We hadn’t really thought of that,” confided one senior adviser to Ford, insisting the Tories would prefer the former premier stick around as a living reminder of the previous administration.
Wynne is showing no signs of departing. She is in the house most days and this week introduced her first private member’s bill, on making seatbelts mandatory in school buses.
Robert Benzie is the Star’s Queen’s Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie