Osgoode Hall Law Journal Article 2 Volume 27, Number 1 (Spring 1989) The undinF g of Political Parties in Ontario Keith D. Ewing Follow this and additional works at: http://digitalcommons.osgoode.yorku.ca/ohlj Article Citation Information Ewing, Keith D.. "The undF ing of Political Parties in Ontario." Osgoode Hall Law Journal 27.1 (1989) : 27-91. http://digitalcommons.osgoode.yorku.ca/ohlj/vol27/iss1/2 This Article is brought to you for free and open access by the Journals at Osgoode Digital Commons. It has been accepted for inclusion in Osgoode Hall Law Journal by an authorized editor of Osgoode Digital Commons. THE FUNDING OF POLITICAL PARTIES IN ONTARIO" By KEITH D. EWING* I. THE ORIGINS OF THE LEGISLATION .......... 28 A. The Camp Commission Recommendations ...... 29 II. THE ELECTION FINANCES REFORM ACT 1975... 34 A. Registration . ........................... 35 B. Contributions .......................... 37 C. Regulating Campaign Expenses .............. 40 D. Public Funding ......................... 42 E. Enforcement ........................... 45 III. IMPACT OF THE LEGISLATION ON POLITICAL FUND-RAISING .......................... 48 A. New Fund-Raising Techniques .............. 48 B. Changing Patterns of Coiporate Dependence ..... 53 C. FinancialInequality ...................... 57 IV. FURTHER REFORM - BILL 103 ............... 62 A. Political Pressure in Ontario ................ 62 B. Developments Elsewhere in Canada ........... 68 C. The Liberal-NDP Coalition Government ........ 74 V. CONCLUSION: IS FURTHER REFORM POSSIBLE? ............................. 80 A. A Ban on Corporate Contributions? ........... 82 B. The Charteras a Limit to Further Refonn ...... 85 Copyright, 1989, K.D. Ewing. Lecturer in Law, University of Cambridge. Much of the research on which this paper is based was conducted during visits to Osgoode Hall Law School in 1982 and 1986. The author is grateful to the faculty and staff of the School for their hospitality and assistance in preparing the paper. The author would like to thank particularly Neil Belmore, Harry Glasbeek, Reuben Hasson, Allan Hutchinson, and Andrew Ranachan. OSGOODE HALL LAW JOURNAL [VOL. 27 NO. 1 I. THE ORIGINS OF THE LEGISLATION Ontario's legislation relating to financing of political campaigns was enacted for several reasons, but perhaps the most important are the suspicions of corruption which followed Conservative party fund raisers. Canada is a country where allegations of corrupt practices by big business have never been far from the surface,1 and historically Ontario was no exception to this feature of national politics. In 1966 a member of the provincial legislature demanded an investigation into allegations that a Conservative party fund raiser gave the impression to representatives of Melchers Distillers Ltd that he might be able to influence the Liquor Control Board of Ontario on behalf of the Company.2 Not long after the 1963 election in relation to which the allegation was made, there was a general increase in liquor prices. It was alleged the Canadian distillers, including Melchers, who contributed to the Conservatives' election fund recovered their investment within a few months; as a result, Ontario consumers indirectly defrayed a part of the election expenses of the Conservatives.3 The provincial Premier denied that there was any truth in the allegations, and he rejected calls for an independent judicial inquiry. But the allegations clearly wounded the Tory establishment. The Premier gave an undertaking that a Select Committee would be appointed "to carry out a 4 complete study of our electoral system." It was over six years, however, before any serious investigation into campaign financing took place. The Conservative government only took action as a result of another charge of corruption. In 1972, it was claimed in the Legislature that a government contract to build a new Workman's Compensation Building was awarded to a corporation in return for a donation of 1 For an account, see Z.K. Paltiel, PoliticalParyFinancing it Canada (Toronto: McGraw- Hill Co., 1970). 2 Ontario, Legislative Assembly, Debates: Official Report, 4th Sess., 27th Leg. (Toronto: Queen's Printer, 1966) (24 March 1966) cols. 1861-2513. 3 Ibid, cols. 2510-13. 4 Ibid, col. 2513. 1989] The Funding of Political Parties 29 fifty thousand dollars to Conservative party funds.5 In response to this affair, the government referred the matter to the Camp Commission, which had been set up in June 1972 to study the functions of the Legislative Assembly, with particular reference to the role of private members and how their participation in the process of government could be enlarged. In referring this additional matter of party and election campaign financing to the Commission, the Premier said: To the greatest extent possible, I would want to maintain a political system in which the various parties can function and campaign for public support freely and openly and6 ... in an atmosphere above and beyond public doubt, suspicion or cynicism.... Whether or not there was any truth in the allegations which had been made was to some extent irrelevant: ... the Watergate scandal to the South, and some public questioning of relationships between the government and individuals in the private sector in Ontario had led to widespread concern regarding the morality of the political process, and the risk that large corporations which regularly donated major sums to governing parties, could be in a position to unduly influence government. In order to ensure in the ordinary citizen confidence that his participation in the political process was in fact election financing legislation be accepted meaningful, it7 was essential that Ontario and enforced. A. The Camp Commission Recommendations The Camp Commission made three general recommendations. First, it gave a muted attack on the traditional practice in the political system not to disclose either the source of party funds or the disposition of them. In a remarkable passage See Ontario, Legislative Assembly, Debates: Official Report, 2d Sess., 29th Leg. (Toronto: Queen's Printer, 1972) (17 March 1972) col. 533; (21 November 1972) col. 4705; (6 December 1972) cols. 5257-58; (12 December 1972) col. 5489; and (December 1972) cols. 5503-04. 6 Ontario, Commission on the Legislature, Third Report (Toronto: The Commission, 1974) at 3 (Chairman: Dalton Camp) [hereinafter the Camp Report]. 7 Ontario, Commission on Election Contributions and Expenses, The Commission: Ten years later,1975-1985: Reflections on PoliticalFinancing in Ontario (Toronto: The Commission, 1985) at 3. OSGOODE HALL LAW JOURNAL [VOL. 27 NO. 1 about the common practice in a modern liberal democracy, the Commission noted that "it would be difficult to make even an informed guess as to the total sums raised annually in Canada by politicians and parties......8 Second, the Commission reiterated the need to ensure that the parties had sufficient funds: "In any system close to the ideal, a political party with a reasonable base of public support ought to have adequate funds so that it can maintain an efficient level of research, organization and communications capacity between elections, and campaign effectively during elections."9 The third recommendation of the Commission was to reduce the dependence of the parties on institutional support and to extend the popular base of party financing: ... there is too little genuine incentive for the party to give proper emphasis to the smaller contributor, or to broaden the base of party financing. A free, open, and democratic political system ought to have a greater reliance upon general public support and ought not to depend, for its continuance, on the generosity of a segment of the community. Certainly, when political parties rightfully have their influence upon Members in the Legislature, the parties themselves cannot be deemed to be free of the risk of undue or disproportionate influence of those who 1 0 pay their bills.... As a means to achieve these goals, the Commission considered but rejected two proposed methods, each of which has been adopted in Canada or elsewhere. The first proposal was for large scale public funding of political parties. The Commission rejected this method for three reasons: (1) if money was to be apportioned according to political success, it would discriminate in favour of the "ins" against the "outs;"11 (2) if all parties were to be treated in the same way, this would favour minority parties at the expense of major ones;12 (3) and finally, this method would present a dilemma in respect of independent candidates - they would either have to prohibited altogether or financed even if there was suspicion they were "seeking notoriety or self-aggrandizement ... at 8 Camp Report, supra, note 6 at 2. 9 Ibid at 5. 10 Ibid at 6. 11 Ibid at 9-11. 12 Ibid. at 10. 1989] The Funding of Political Parties public expense."13 The Commission instead recommended striking a balance between private contributions and public funding by encouraging the parties to broaden their base by going out to organize support. To facilitate this it recommended the introduction of a tax credit system for political donations.14 In addition, the Commission made the further recommendation that a limited reimbursement from public funds should be made to candidates for election in order to help ensure that credible candidates may mount credible campaigns.15 However, no public funding was recommended for the parties; the extent of the state's contribution was limited to the encouragement