Municipal Election Act Reforms

Members of VoteToronto and many citizens across the province have become concerned about the inadequacies of the Ontario Municipal Elections Act. We recommend that the Ontario government thoroughly revise the legislation to bring it into accord with current practices in federal and provincial election financing laws and to thereby eliminate the flagrant abuses of elections and campaign funding practices that continue. These are our recommendations and the explanation as to why these reforms are urgently needed

For further comment and discussion

Robert MacDermid
Department of Political Science
York University
rmacd@yorku.ca

SUMMARY OF REFORMS

EXPLANATION

1. Supporting citizen centered campaigns

1.1 Ban corporate and union contributions.

Section70(3) of the Ontario Municipal Elections Act should be amended to remove corporations and trade unions as eligible contributors to candidates’ campaigns.

Funding from corporations made up half or more of all money going to candidates in 2006 in 7 of 10 Greater Toronto area municipalities in the attached study. The concentration of corporate money was even higher for elected candidates. More than half and often as much as two thirds of money from corporations came from the development industry. In 2006, nine elected members of Toronto council, including the mayor, did not accepted contributions from corporations and developers.

Corporations cannot vote or run for office, they are not citizens and do not hold the rights of citizens. Accordingly, they should not be allowed to participate in electoral politics by contributing to candidate campaigns.

Allowing citizens who own or control corporations to give once in their own name and again in the name of a company or companies is blatantly unfair. In a campaign finance system with limits on the size of contributions, as is the case in the municipal campaign finance rules, this permits some citizens the opportunity to give two or more times as much as other citizens who do not own or control corporations.

Corporate ownership and organization makes disclosure and campaign contribution limits very difficult to enforce. Attempts to prevent associated companies, those owned or controlled by the same individuals, from making contributions will always be limited by the impossibility of knowing the true ownership or control of private corporations. For this reason there can be no real control of corporate contributions and disclosure provisions cannot be effectively enforced.

No corporate or trade union contributions to municipal candidates and parties have been permitted in Quebec since 1980. Quebec and Manitoba have banned corporate and union contributions to candidates and parties in provincial politics and the last Canadian election completed the removal of all such contributions from federal electoral politics. This practice must become the norm for all elections in Canada.

1.2 Financial contributors to a candidate’s campaign must be of voting age

The Municipal Election Act should be amended to include a section requiring that individual contributors to campaigns be of voting age.

Contributions by those younger than the voting age are unlikely to be of their own volition or out of their own funds. Without a voting age requirement for contributors, the section 74(1) requirement that contributions be from the contributor’s own fund is more likely to be abused.

1.3 Financial contributors to a candidate’s campaign must reside within the municipality where the candidate is nominated.

The Municipal Elections Act should be amended to allow only those who are qualified electors in the municipality to make contributions to candidates for municipal office.

Candidates should be financially supported only by individuals who are qualified electors within their own municipality. Elected officials should represent the interests of their constituents and not be subject to pressures from outside funders.

The Quebec Elections and Referendums in Municipalities Act contains this requirement.

1.4 Ban the self-financing of campaigns

Section 71(3) of the Municipal Elections Act should be removed so that candidates are subject to the same contribution limits as other citizens.

Unlike provincial and federal election laws, municipal candidates in Ontario can contribute as much money as they want to their own campaigns. In 2006 in Ajax, Brampton, Mississauga, Oshawa and Whitby candidates provided more funds to campaigns than citizens – a remarkable finding. In Ajax almost half and in Oshawa and Whitby more than a third of campaign funds came from candidates’ own pockets. Even in Toronto, 18% of funding came from candidates and their spouses. Eight winning candidates paid for more than half of their campaigns in 2006 and four of them paid for the entire cost.

Allowing candidate self-financing gives a significant advantage to the wealthy and indirectly, the policies that supported and generated their wealth. One important virtue to campaign finance systems that preclude self-financing and cap contributions at a low level is that candidates are forced to meet and listen to voters and to get some sense of the breadth of interests they may be required to represent.

1.5 Limit the number of contributions by a single contributor

The Municipal Elections Act should include a limitation on the number of campaigns the same contributor can support in the same municipality. In 2006 in the city of Toronto, 68 contributors supported the campaigns of 5 or more candidates and several gave to more than 20 candidate’s campaigns. Multiple contributors included development companies, unions, lobbyists, and taxi and advertising companies. The biggest multiple contributors gave more than $10,000 in total with the Toronto firefighters’ union topping the list with $17,250 in contributions.

Unrestricted contributions allow wealthy interests to extend their influence across a large number of candidates and eventual councilors and help to potentially create a coalition of that might support issue positions of importance to contributors.

Party and candidate financing legislation in Ontario and at the Federal level restricts multiple giving. Both levels limit the total amount that can be given to candidates of the same party. In Ontario elections that limit was $5,600 to all candidates of the same party. The Canada Elections Act limits total contributions to candidates of the same party to $1,100.

Toronto Council is far bigger than councils in all other Ontario municipalities so a limit should be set in terms of the number of campaigns a contributor can support and that number should be no more than 3 or 4.

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2. Improving transparency

2.1 Require the posting of campaign financial statements on city websites

Section 90(5) of the Municipal Elections Act should be modified to require that municipalities place scanned images of the financial statements of candidates on city websites on the date of the filing deadline. All supplementary financial statements should be added to the website on the date of the filing deadline. The scanned images should include the addresses of those making contributions of more than $100.

This change would allow all citizens free and immediate access to candidates’ financial statements. It would also reduce the cost to clerks’ offices of dealing with requests for financial statements.

A few municipalities, Toronto, Ajax, Mississauga, Pickering and Oakville placed all or edited segments of financial statements on city websites following the 2006 election. Candidate and political party financial statements are available on the internet for Ontario and Federal parties and candidates.

2.2 Require that contributors disclose their home address.

Section 69(f)(iv) of the Municipal Elections Act should be changed to require that the candidates keep a record of the home address of all individual contributors.

The current section does not specify a home address and contributors may now give any address where they may be reached such as a corporate office. Home addresses would be required to prove the residency of the contributor as discussed in recommendation 1.3.

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3. Improving regulation and oversight

3.1 An office to review campaign financial statements for omissions and errors

The Municipal Elections Act should include a section that gives an office the responsibility of reviewing and requesting revisions to improperly filed candidate financial statements.

Municipal campaign finance rules need closer regulation and supervision to prevent the flaunting of the rules that recent audit requests have uncovered. A City of Toronto Auditor General’s review of 2006 campaign financial statements found that 29 of 45 winning candidate’s statements contained errors from the inconsequential to serious enough to potentially disqualify office-holders.

The mandate of campaign auditors who sign financial returns is so narrow that it has failed as a means of making sure that candidates comply with the rules. A significant percentage of candidates’ financial statements contain breeches of the rules, simple mathematical errors and obvious omissions such as contributors’ addresses.

The municipal level does not have an oversight body that performs some of the functions of Elections Ontario or Elections Canada who despite the presence of an auditor’s signature, scrutinize and query financial statements and make sure that candidates comply with the rules. The city clerk’s office, a city auditor general or another independent official or office should ensure that financial statements are correct and complete and require candidates to file revisions.

3.2 Independent campaign finance audit committee.

Revise section 81 of the Municipal Elections Act to require that all councils appoint an independent campaign finance compliance audit committee. The committee would replace the council or local board’s role in accepting or rejecting an elector initiated application for a compliance audit of a candidate’s election campaign finances.

The current enforcement and complaint procedures for municipal campaign finance laws needs to be removed from the influence of the elected council and made more open and responsive to the complaints of citizens. Faith in the electoral process is related to the belief that the rules are being followed and that complaints will be dealt with openly.

A number of larger municipalities, Toronto and Ajax for example, have established such committees under section 81(3.1) and this independent review process should be required of all municipalities.

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4. Controlling campaign costs

4.1 Include all campaign expenditures under the limit.

The Municipal Elections Act should be amended to include all campaign costs under the expenditure limits with the exception of the candidate’s personal costs.

All candidates for council and regional council are governed by a spending limit of $5,000 plus 70 cents per voter. The average spending limit for candidates for the 44 wards in Toronto in 2006 was about $26,867. Contestants for mayor had a spending limit of $7,500 plus 70 cents per voter but had many more voters and so a much higher limit. The spending limit for the Toronto mayoralty race in 2006 was $1,013,634 while the suburban limits ranged from $319,664 in Mississuaga to $52,046 in Ajax.

Spending limits can be deceiving. Some candidates raised and spent far more money than the official limit because costs incurred for fundraising functions and post-election parties are not included under the limit. In 2006, 30 of 132 elected municipal councilors and mayors in ten GTA municipalities spent more than 150% of the spending limit and 14 of them raised and spent more than twice the limit. City of Toronto elected candidates spent an average of 165% of their spending limit led by councilor Mammoliti’s 447% and councilor Kelly’s 370%.

Expenditures outside the cap are sometimes used to provide lavish fundraising functions where contributors end up paying for their own entertainment or where contributors pay for tickets given out free to potential supporters by the campaign. Other impressive sums are spent on campaign ending celebrations.

Campaign financing legislation should not encourage candidates to raise more money than they are permitted to spend and thereby potentially incur obligations to the less than half of one percent of citizens who make large contributions to campaigns. Moroever, fundraising events and even direct phone or mail fundraising is indistinguishable from campaigning. A fundraising telephone call is also the opportunity to tell a voter about candidate and a fundraising dinner is an opportunity for the candidate to make a campaign speech.

4.2 Keeping campaign expenditure limits low

The campaign expenditure limits in the Municipal Elections Act should not be raised.

Additional campaign expenditures invariably go to advertising or campaigns signs which tell voters very little or nothing about candidate policy positions so there is almost nothing to be gained from a democratic perspective in allowing the expenditure limits to be raised.

Maintaining or even lowering spending limits forces candidates to run people centered campaigns rather than technology and advertising driven ones. Voter turnout at municipal campaigns is very low and campaign finance legislation must do its part to drive candidates to running campaigns that mobilize citizens around urban issues.

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5. Controlling spending on behalf of candidates.

5.1 Third party spending must be regulated.

The Municipal Elections Act should be amended to include a section regulating third party spending, that is spending by individuals and groups in support of a candidate or candidates. The Act should regulate this type of election spending in larger municipalities by requiring that third party campaigns, register, file financial statements, disclose contributions and be subject to modest spending limits.

The extent of spending outside but in support of a candidate’s campaign is unknown. However third party spending could undo the greater equality of political expression introduced by campaign spending limits.

The federal level has had third party spending limitations that have now survived Charter challenges and Vancouver’s election rules contain limitations on third party spending.

The federal level has had third party spending limitations that have now survived Charter challenges and Vancouver’s election rules contain limitations on third party spending.

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6. Closing loopholes and increasing fairness.

6.1 Carrying forward campaign surpluses must be ended.

In the interest of encouraging competition for municipal office, section 79(4) of the Municipal Elections Act should be amended to prohibit the carrying forward of surpluses to future election campaigns. All surpluses should be turned over to the municipality.

Surpluses give an office-holder a head start on fundraising. In the 2006 election in ten Greater Toronto Area municipalities, 60 of the 116 incumbents brought forward a surplus from the 2003 election and for 27 candidates it was more than $10,000. For eight candidates, these surpluses were larger than the candidate’s 2006 spending limit, meaning that they could have campaigned almost entirely with money contributed in 2003. Those who financially supported a candidate in 2003 but felt in 2006 that they should be voted out of office, were faced with the thought of having a portion of their earlier contribution support a candidate that they now oppose.

Large surpluses are a deterrent to a serious challenger and candidates may even be encouraged by the rule to try to raise them to improve the odds of winning at a future election.

6.2 Regulating campaign deficits

The Municipal Election Act should be amended to require that any campaign deficit is assumed by the candidate at the end of the campaign and cannot be carried forward to a future campaign. Campaign deficits must be paid out of the candidate’s own funds.

Campaigns that end in deficit, where a candidate has spent more than he or she has raised (with the difference covered by a candidate guaranteed loan, cash from the candidate’s pocket, or unpaid suppliers) are inadequately regulated.

If a campaign ends in deficit at the end of the year of the election, the candidate may extend their fundraising for up to a year following. Elected candidates usually have no difficulty erasing a deficit if they choose to extend their campaigns for there is no shortage of people willing to contribute to the campaign of a candidate who has won. Losing candidates have a much harder time paying off deficits and must often write them off as the cost of the experience.

The campaign extension period allows a unique situation of influence where elected councilors are asking for money to erase personal debts. This creates the possibility of influence that would not be acceptable or permitted at any other time. At the provincial or federal levels, contributors can give money to a sitting member’s riding association to erase a campaign deficit. In that instance, the campaign deficit is not usually a personal debt held or guaranteed by the candidate.

Given the difficulties of regulating deficits and the possibilities for contributors to influence elected councilors, the best way to deal with deficits in the absence of municipal parties is to ban extension periods and have all campaign deficits become the personal debts of candidates. This would force candidates to be more cautious about spending funds that have not been raised.

6.3 The value of paid volunteer labour must be included as a contribution from the employer

Amend the Municipal Elections Act to include as a contribution the wages paid by an employer to an employee who “volunteers” to work on a campaign. Section 66 (2) (2) (ii) allows an employer, at his or her discretion, to pay the normal rate of compensation to an employee who volunteers to work on a campaign without the cost being a contribution to a candidate’s campaign.

This section of the act allows employers, corporations and unions to exceed the limit by not including the cost of wages as a contribution. Moreover, it permits employers to determine the campaigns for which employees may become paid “volunteers.”

Candidates who can take advantage of this provision are able to spend more than the expenditure limit and more than candidates who cannot attract this support.

There is no way of knowing the value of wages paid to these campaign “volunteers” but it could easily total hundreds of thousands of dollars across all campaigns.

Contributions of paid labour are considered by the Quebec Elections and Referendums in Municipalities Act as contributions and therefore part of the employer’s contribution limit.

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7. Supporting campaigns

7.1 Require municipalities to create a contribution rebate program

Amend the section 82 (1) of the Municipal Elections Act to require that every municipality fund a contribution rebate program for individual contributors only.

Such programs in Ajax, Markham and Toronto, in combination with other factors, have produced an increase in the percentage of contributions coming from individuals and encouraged candidates to raise money in small amounts from individuals. The province could set minimum limits for the rebate and possibly fund it through lump sum payments to the municipalities.

Contribution rebate programs have been a fixture in provincial and federal politics for many years and have encouraged citizens to financially support candidates and parties.

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8. Enhancing democracy and promoting citizen involvement in municipal politics.

8.1 Change the Municipal Elections Act to allow the formation of parties

Municipal political parties, while not mentioned in the Municipal Elections Act, are effectively banned by a section that does not provide for a party name on the ballot and by sections that prevent fundraising and spending by any entities other than single candidates. These sections of the act effectively eliminate the forming of political parties in Ontario municipalities.

Municipal politics in the GTA has a party, the party of development interests. As the accompanying paper demonstrates, developers behave much like parties in a number of ways. They coordinate funding to back candidates that they believe support their interests. Development interests recruit candidates to stand for municipal office from among those with connections to the industry or general pro-development sentiments and experiences. They pay the salaries of volunteers who work for development backed candidates and form the organizational core of those campaigns.

The development party even has central policy organizations such as the Greater Toronto Sewer and Watermain Contractors Association, who contributed to 95 candidate campaigns in 2006. Other industry associations such as the Building Industry and Land Development Association act like political parties with memberships that share political views and, like parties, they provide the intellectual basis for developing policies and proposals that are pro-development.

While pro-development interests act like political parties in many municipalities, in the City of Toronto a left – right split among councillors has been present for some time. These groups act much like political parties. They organize support to get initiatives passed through council or they group together to form opposition to motions.

The political life of many Ontario municipalities has matured to the point that political parties should be encouraged to form and to operate during elections and in council debates. This will help to make municipal politics focus more clearly on issues; it will make the system more transparent and politicians will be more accountable to the public.

Municipal politics is organized by political parties in most democratic nations. Politics in Montreal, other Quebec municipalities and Vancouver have been organized by parties for many years.

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