3. REFORMING
OTTAWA'S MUNICIPAL ELECTION FINANCES RÉFORME DU FINANCEMENT DES ÉLECTIONS MUNICIPALES À
OTTAWA
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That Council consider the following:
1.
That
the City of Ottawa request the Minister of Municipal Affairs and Housing to
enact legislation amending the Municipal
Elections Act to permit
municipalities to prohibit corporate and trade union contributions to
candidates for municipal councils, to be effective for the next municipal
elections;
2.
That
upon enabling legislation, City Council consider enacting a bylaw to prohibit
corporate and union contributions to municipal candidates for Ottawa City
Council, to take effect for the next municipal election;
3.
That
the City of Ottawa request the Minister of Municipal Affairs and Housing to
provide enabling legislation to permit municipalities to require that campaign
surpluses accrued by municipal candidates be paid to the municipality at the
end of the election period, to help defray the costs of the municipal election;
and
4.
That
the City of Ottawa request the Minister of Municipal Affairs and Housing to
provide enabling legislation to permit municipalities to pass bylaws requiring
municipal candidates to file a preliminary list of campaign contributions
received with the City Clerk on Nomination Day (i.e. one month before Election
Day).
RECOMMANDATIONS RÉFÉRÉES PAR LE COMITÉ
Que le Conseil considère ce qui suit :
1. que la Ville d'Ottawa demande au ministre des
Affaires municipales et du Logement de faire adopter, avant les prochaines
élections municipales, un texte législatif modifiant la Loi sur les
élections municipales afin de permettre aux municipalités d'interdire les
contributions de sociétés et de syndicats à un candidat au Conseil municipal;
2. qu’après l'adoption de ce texte législatif,
que le Conseil municipal considère adopter un règlement municipal interdisant
les contributions de sociétés et de syndicats à un candidat au Conseil
municipal, interdiction devant entrer en vigueur avant les prochaines élections
municipales;
3. que la Ville d'Ottawa demande au ministre des
Affaires municipales et du Logement de faire adopter un texte législatif afin
de permettre aux municipalités d'exiger que les excédents de caisse électorale
des candidats dans une élection municipale soient versés à la municipalité à la
fin de la campagne électorale afin d'aider à payer les coûts de l'élection
municipale; et
4. que la Ville d'Ottawa demande au ministre des
Affaires municipales et du Logement de faire adopter un texte législatif afin
de permettre aux municipalités d'adopter un règlement municipal exigeant que
les candidats dans une élection municipale déposent auprès du greffier de la
Ville, le jour de la déclaration de candidature (soit un mois avant le jour de
l'élection), une liste préliminaire des contributions à leur campagne
électorale.
DOCUMENTATION
2. Extract
of Draft Minutes
Corporate Services and
Economic Development Committee
Comité des services organisationnels et du développement économique
and Council / et au Conseil
Submitted by/Soumis par : Alex Cullen, Councillor / Conseiller
Contact Person/Personne ressource : Alex Cullen,
Councillor, Bay Ward / conseiller, quartier Baie
(613)
580-2477, alex.cullen@ottawa.ca
SUBJECT:
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OBJET :
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That the Corporate Services
& Economic Development Committee recommend to City Council:
1.
That the City of
Ottawa request the Minister of Municipal Affairs and Housing to enact
legislation amending the Municipal
Elections Act to permit municipalities to prohibit corporate and trade
union contributions to candidates for municipal councils, to be effective for
the next municipal elections;
2.
That upon enabling
legislation, City Council consider enacting a bylaw to prohibit corporate and
union contributions to municipal candidates for Ottawa City Council, to take
effect for the next municipal election;
3.
That the City of
Ottawa request the Minister of Municipal Affairs and Housing to provide
enabling legislation to permit municipalities to require that campaign
surpluses accrued by municipal candidates be paid to the municipality at the
end of the election period, to help defray the costs of the municipal election;
and
4.
That the City of
Ottawa request the Minister of Municipal Affairs and Housing to provide
enabling legislation to permit municipalities to pass bylaws requiring
municipal candidates to file a preliminary list of campaign contributions
received with the City Clerk on Nomination Day (i.e. one month before Election
Day).
RECOMMANDATIONS DU RAPPORT
Que
le Comité des services organisationnels et du développement économique
recommande au Conseil d'approuver les mesures suivantes :
1. que
la Ville d'Ottawa demande au ministre des Affaires municipales et du Logement
de faire adopter, avant les prochaines élections municipales, un texte
législatif modifiant la Loi sur les élections municipales afin de
permettre aux municipalités d'interdire les contributions de sociétés et de
syndicats à un candidat au Conseil municipal;
2. qu’après
l'adoption de ce texte législatif, que le Conseil municipal considère adopter
un règlement municipal interdisant les contributions de sociétés et de syndicats
à un candidat au Conseil municipal, interdiction devant entrer en vigueur avant
les prochaines élections municipales;
3. que
la Ville d'Ottawa demande au ministre des Affaires municipales et du Logement
de faire adopter un texte législatif afin de permettre aux municipalités
d'exiger que les excédents de caisse électorale des candidats dans une élection
municipale soient versés à la municipalité à la fin de la campagne électorale
afin d'aider à payer les coûts de l'élection municipale; et
4. que
la Ville d'Ottawa demande au ministre des Affaires municipales et du Logement
de faire adopter un texte législatif afin de permettre aux municipalités
d'adopter un règlement municipal exigeant que les candidats dans une élection
municipale déposent auprès du greffier de la Ville, le jour de la déclaration
de candidature (soit un mois avant le jour de l'élection), une liste
préliminaire des contributions à leur campagne électorale.
Democracy
is a process of governance where people choose their governors through
elections (one person - one vote). A key principle that helps make democracy
function well is that elections must be conducted fairly – that candidates have
the opportunity to present themselves to voters, and that voters have the
opportunity to learn about their candidates, who they are and what they stand
for, and make informed choices. The evolution of democracy in North America has
led not only to laws governing who can vote and how, but also governing the
conduct of candidates, particularly in the area of fundraising and spending, in
order to ensure fairness in the democratic process. In Ontario at the municipal
level, this includes limits on campaign contributions and campaign expenses, on
the campaign period, and includes reporting mechanisms to ensure transparency
to help voters make informed choices. Despite this, recent reviews of municipal
campaign experiences in Ottawa reveals that more work needs to be done to
ensure a level playing field – fair to both voters and candidates – that is
crucial to the integrity of the democratic process.
In
2005 Councillor Alex Cullen (Bay Ward) prepared a report entitled “Reforming Ottawa’s municipal election
finances” (April 28, 2005), which was presented to the City’s Corporate Services
& Economic Development Committee and City Council (on file with the City
Clerk). The report reviewed the financial returns of all candidates seeking
election to Ottawa City Council in the 2003 municipal elections. It showed that
nearly $1 million was raised and spent by the 76 candidates seeking municipal
office. It also revealed that the ability to raise and spend money to wage a
campaign was a significant determinant in electoral success. The analysis
further showed that challengers running for municipal office faced significant
barriers to election, particularly as they on average were only able to spend
less than half the amount their incumbent rivals spent on their campaigns.
Further, challengers relied significantly on providing their own funds for
their election campaigns, whereas incumbents did not. Conversely, incumbents
(making up 21% of all candidates) were able to snare nearly three-quarters
(72.7%) of all the corporate contributions in the 2003 municipal election. This
raised questions then about how level the election playing field is in Ottawa,
particularly as every incumbent running in that municipal election (16 out 22
positions) won.
The
conclusions of the report on the 2003 were:
In
2007, following the results of the 2006 municipal election, Councillor Cullen
prepared another report which reviewed the financial returns of all candidates
seeking election to Ottawa City Council in the 2006 municipal election,
entitled “The Need for Reform: A Report
on the 2006 Municipal Election” (June 20, 2007 – see attached). All
Councillor incumbents who ran outspent their opponents by nearly 3-to-1, aided
in large part by receiving the bulk of corporate campaign contributions
(64.8%). All Councillor incumbents (19 in total) were re-elected. Corporate
contributions favoured Councillor incumbents by more than a 2-to-1 margin, with
11 incumbents receiving more than half their campaign revenues from
corporations. Most corporate contributions come from developers, construction
companies, waste disposal companies, etc. – companies who do business with City
Hall. Most Councillor challengers had to contribute personally to their own
campaigns (providing 20% of their campaign revenues) while incumbents hardly
did (3% of campaign revenues). Many incumbents continued to rack up campaign
surpluses, providing an instant monetary advantage for the next election. As
well, there were many instances of associated companies (i.e. controlled by the
same management group) providing multiple contributions to favoured candidates
(mostly incumbents), appearing to violate Ontario’s municipal election law. Further,
numbered companies give thousands of dollars to favoured candidates (mostly
incumbents), violating transparency principles.
The
conclusions of that report were much the same as the 2003 report, namely:
The
problem of corporate campaign contributions distorting the democratic playing
field is not new and has prompted reforms, as at the federal level (under the Canada Elections Act) corporate and
union donations are not permitted. Only individuals may contribute to the
federal political process. The same applies in some provinces (Quebec, for
example). At the municipal level in Ontario, currently corporations doing
business in Ontario and unions representing workers in Ontario as well as
individuals resident in Ontario can contribute to municipal election candidates
(under the Municipal Elections Act).
However, the City of Toronto, under special legislation (The Stronger City of Toronto for a Stronger Ontario Act, 2006), has
the power to restrict municipal campaign contributions for candidates running
for city council to only from individuals.
In
Ottawa it should be noted that union contributions are not a significant factor
in the municipal election process, nor in the campaign of any specific
candidate. Only three Councillor candidates in the last municipal election
received any union contributions at all, and in each case the contributions
were small, both in absolute terms and compared to the amount of corporate
contributions (in total $12,401 in union contributions of $100 or more, vs.
$553,863 in corporate contributions of $100 or more).
However,
if union contributions are not very important in Ottawa, corporate
contributions are and they are heavily
weighted toward incumbent candidates. In 2006 11 Councillor winners, all
incumbents, received over half of their campaign contributions from corporations
(note, though, that 5 incumbents did not receive or refused corporate
contributions). The overall average of corporate contributions for incumbents
was 42%, for winners a little over 39%.
The
Councillor losers were not so fortunate in 2006. Of the 45 losing Councillor
candidates only 3 received more than 50% of their contributions from
corporations. Of these, one was the former Regional Chair, a second was a
former Mayoral candidate, and the third received corporate contributions
totaling $750, in a campaign where he provided over 75% of the campaign
contributions from his own funds. The overall average for losing candidates was
15%.
Moreover,
many of these corporate contributions came from organizations doing business
with the City (i.e. developers, construction companies, waste disposal
companies, etc.). Businesses are not
philanthropic enterprises - they contribute to further their self-interest, or
at best as a form of investment. This raises questions regarding the purpose of
these contributions, about the relationship between the incumbents who garner
so much of the corporate contributions and their corporate donors. This leads
to perceptions, whether true or not, that something is being given for
something. This impairs the legitimacy of the electoral process in the eyes of
many in the electorate, leading to cynicism among voters and contributing to
lower voter turnouts. Eliminating the ability of corporations (and unions) to
make campaign contributions to municipal candidates would eliminate this
perception and improve the sense of integrity in the municipal election
process.
As
well, the current system of both individual and corporate/union contributions
permits some citizens to contribute more than once to a particular candidate,
as an individual and again through a corporation or union, whereas the
overwhelming bulk of the electorate can only do so once. It is difficult to see
how this can be fair.
The
situation is made worse when some of these corporate contributions are made
anonymously, through numbered corporations. The principle of transparency,
which should apply to all transactions involving election finance, is violated,
as it is not easy to determine who controls the numbered company and what
business it is in.
The
financial advantage of incumbents is further exacerbated by the ability to
accumulate surpluses that can be used for future elections. Given the
restrictions on campaign expenses under the current municipal election law,
there is no justification to fundraise beyond the campaign spending limit, yet
incumbents can (and many do) fundraise well beyond these limits, creating
campaign warchests that give them an automatic advantage for the next election
campaign. These surpluses should be returned to the municipality as a means of
helping to defray the costs of the municipal election, and will have the effect
of creating a more level playing field among candidates for the next municipal
election.
Another
matter is the issue of who supports whom financially for municipal council –
valuable information for voters – is withheld from the electorate until after
the municipal election, based on current reporting procedures in the
legislation. Transparency here, through the filing of election contribution and
expenses returns with the City Clerk, is not useful to the voter as it appears
after the election. As much of the fundraising to pay for expenses occurs
before the election, then it makes sense to require candidates to file
preliminary campaign contributors lists with the City Clerk before
voting day, for example, on Nomination Day (one month before election day).
This way, voters will have some appreciation as to who is supporting whom to be
their municipal representative.
It
is obvious that reforms are needed to municipal election finances to increase
transparency. In election finance, as in most things to do with public life,
more sunshine is the best medicine.
RECOMMENDATIONS
Recommendation 1: That the City of Ottawa
request the Minister of Municipal Affairs and Housing to enact legislation
amending the Municipal Elections Act to
permit municipalities to prohibit corporate and trade union contributions to
candidates for municipal councils, to be effective for the next municipal
elections.
Recommendation 2: That upon enabling legislation,
the City Council consider enacting a bylaw to prohibit corporate and union
contributions to municipal candidates for Ottawa City Council, to take effect
for the next set of municipal elections.
The
rationale for these recommendations is to enable the voter, who is electing his
or her municipal representative, to be the sole source of campaign
contributions, and avoid creating a class of privileged individuals who, by
virtue of their control of corporations or unions, can contribute yet again to
a candidate (or group of candidates) through their organizations. This is
consistent with the principle of democracy – one person, one vote.
Recommendation 3: That the City of Ottawa
request the Minister of Municipal Affairs and Housing to provide enabling
legislation to permit municipalities to require that campaign surpluses accrued
by municipal candidates be paid to the municipality at the end of the election
period, to help defray the costs of the municipal election.
Since
there are campaign expenditure limits for municipal candidates, there is little
point to fundraising past those limits as the money raised cannot be used in
that campaign. However, under current law these surpluses can be banked and
used for the next municipal campaign (for any municipal office – mayor or
councillor), thereby providing an instant advantage for that candidate over
others who must start from scratch. Having such surpluses be turned over to the
municipality at the end of that campaign not only creates a more level playing
field for the next municipal election, but would also help defray the costs to
the municipality of holding that municipal election.
Recommendation 4: That the City of Ottawa
request the Minister of Municipal Affairs and Housing to provide enabling
legislation to permit municipalities to pass bylaws requiring municipal
candidates to file a preliminary list of campaign contributions received with
the City Clerk on Nomination Day (i.e. one month before Election Day).
Part
of the purpose of the current municipal election law in Ontario is to create
transparency in the financing of municipal campaigns, so that the voter can be
informed of who is financially supporting whom to become their municipal
representative. However, this information is compiled and filed with the City
Clerk after election day, which is not helpful to the voter in making
his or her decision. As much of the fundraising to pay for expenses occurs
before the election, then it makes sense to require candidates to file
preliminary campaign contributors lists with the City Clerk before
voting day, for example, on Nomination Day (one month before election day).
This way, voters will have some appreciation as to who is supporting whom to be
their municipal representative, and make their choices accordingly.
The report "The Need for Reform: A Report on the 2006 Municipal Election"
was released in June 2007 and has garnered wide-spread public interest. A copy
of this report was distributed to community associations and major business and
union organizations in Ottawa.
Comments
from the City Clerk & Solicitor Department (Elections and MFIPPA Branch)
Staff
is offering the following comments on this matter:
The
recommendations are dependent upon legislative changes to the Municipal Elections Act, 1996 (MEA).
While the MEA doesn't specifically require that this type of legislative
amendment be enacted prior to the commencement of a regular election year, it
would be practical that any such amendments dealing with campaign financing
would be required to be in force and effect prior to the first day a person may
file a Nomination Paper with the City Clerk.
Recommendations 2, 3 and
potentially 4 also require that a by-law must be
enacted by Council.
Should
the Corporate Services and Economic Development Committee recommend approval of
any of the recommendations to Council and if Council subsequently concurs, the
City Clerk's office would forward the requests to the Minister of Municipal
Affairs and Housing for his review.
With regards to
Recommendation 3, Section 79 of the Act outlines the process to
determine if the candidate has a surplus.
Subsection (4) states that "if the candidate's financial statement
or supplementary financial statement shows a surplus exceeding $500 and the
election campaign period has ended at the time the statement is filed he or she
shall, when the statement is filed pay the total surplus to the clerk with whom
the candidate's nomination was filed and the clerk shall hold the amount in
trust for the candidate."
Subsection (8) provides that in the next regular election or in an
earlier by-election if the candidate is nominated, the clerk is to pay this
amount to the candidate with interest.
If this subsection does not apply, the amount becomes the property of
the municipality. Subsection (10)
states that the obligation to pay the surplus to the candidate does not apply
to an amount that has become the property of the municipality by virtue of a
by-law made under section 82.
Section 82 deals with contribution
rebates. It provides that a
municipality may by by-law provide for the payment of rebates to individuals,
corporations or trade unions that made contributions to candidates for office
on municipal council. The by-law
establishes the conditions under which an individual, corporation or trade
union is entitled to a rebate and it may provide for the payment of different
amounts to these entities. Subsection
(5) states that the by-law may provide that all or part of the amounts held in
trust under section 79 become the property of the municipality.
The City of Ottawa has a by-law
authorizing the payment of rebates to individuals only (By-law No.
2005-505). It provides that a candidate
must register to participate in the contribution rebate program with the City
Clerk by the end of nomination day. At
present, it does not contain a provision that any amount held in trust for a
candidate becomes the property of the municipality.
Since contribution rebate by-laws
and their conditions of payment are permissive not mandatory under the Act, if
a municipality chooses not to enact a contribution rebate by-law, the surplus
of any candidate exceeding $500 would continue to be held in trust for that
candidate should he or she be a candidate in the next election pursuant to
section 79 of the Act.
In addition, since the municipality
can set the conditions for payment of rebates and subsection (5) is permissive,
a municipality can choose not to require the surplus of a candidate to be the
property of the municipality.
Should Recommendation 4 be approved, staff
would require additional resources to assist with the publication of the data.
In addition, should the Province enact any amending legislation in this regard,
the issue of enforcement and penalties will also have to be fully addressed at that time. As indicated by Councillor Cullen, currently
under the MEA enforcement, for the most part, falls to the control of citizens.
It has
been the tradition of the Minister of Municipal Affairs & Housing to conduct
a review of the Municipal Elections Act, 1996 (MEA) prior to the
commencement of each regularly scheduled municipal election (now every four
years). This review for the purposes of
the 2010 municipal election had commenced sometime in 2008 and it is
anticipated that the amendments to the current legislation will be introduced
and passed sometime later this year.
The
Association of Municipal Managers, Clerks & Treasurers (AMCT) submitted two
discussion papers (February & June 2008) to the Minister of Municipal
Affairs & Housing containing its recommendations on amending the Municipal Elections Act, 1996. While there were no recommendations dealing
with campaign contributions from corporations and/or trade unions, there was a
recommendation in the June 2008 submission suggesting that campaign surpluses
of over $500 become the property of the municipality.
The City
of Toronto, in the Fall of 2004 adopted an Election Campaign Finance Reform
package and submitted it to the Minister of Municipal Affairs & Housing
requesting legislative changes. The
main recommendations of the reform package were:
1. Prohibit
all corporate and trade union contributions to municipal election campaigns.
2. Disallow
candidates from transferring financial surpluses from one campaign to the next.
3. Update
spending limits and redefine rules with respect to excluded expenses.
4. Require
Elections Ontario to be responsible for the monitoring and enforcement of the
provisions of the Municipal Elections
Act, 1996.
The
Province did not enact the permissive legislation in time for the 2006
Municipal Elections. Bill 53, City
of Toronto Act - Stronger City of Toronto for a Stronger Ontario Act, 2006,
enacted on January 1, 2007, amended the MEA
to specifically permit only the City of Toronto to pass a restrictive by-law on
election campaign contributions.
Through discussions with staff of the City of Toronto Elections Office,
it is anticipated that a final report on this matter will presented to Committee
and Council for deliberation at the end of September. It is also anticipated that an election campaign by-law will be
brought forward to Committee and Council for enactment in time for the
commencement of the 2010 municipal elections.
An April
2009 City of Toronto report to its Executive Committee also indicated that the
Province will give consideration to other requested changes for enactment later
this year. The report was not specific
as to what other amendments might be considered by the Province.
There are no legal/risk managment impediments to
approving these recommendations. The recommendations are dependent on
amendments to the Municipal Elections Act, 1996 prior
to implementation at the municipal level.
Funds for the additional staffing requirement identified in recommendation 4 are available in the Election Reserve Fund subject to legislative approval from the Ministry of Municipal Affairs and Council approval of this report.
Document 1 - The Need for Reform: A Report on the 2006 Municipal Election (issued separately to all members of Council and held on file with the City Clerk)
Upon adoption of the report recommendations by City Council, the Clerk will write to the Minister of Municipal Affairs & Housing reporting on City Council's request for legislative changes.
REFORMING OTTAWA'S MUNICIPAL ELECTION FINANCES
RÉFORME DU FINANCEMENT DES ÉLECTIONS MUNICIPALES À OTTAWA
ACS2009-CMR-CSE-0007 city-wide / À l’Échelle de la ville
Vice Chair Desroches advised Committee that Councillor Cullen was prepared to have this item referred to Council without a Committee recommendation. Accordingly, Councillor Bloess moved referral.
Moved by Councillor R. Bloess
That
this item be referred to Council without a Committee recommendation.
CARRIED
That
the Corporate Services & Economic Development Committee recommend to City
Council:
1.
That the City of
Ottawa request the Minister of Municipal Affairs and Housing to enact
legislation amending the Municipal
Elections Act to permit municipalities to prohibit corporate and trade
union contributions to candidates for municipal councils, to be effective for
the next municipal elections;
2.
That upon enabling legislation,
City Council consider enacting a bylaw to prohibit corporate and union
contributions to municipal candidates for Ottawa City Council, to take effect
for the next municipal election;
3.
That the City of
Ottawa request the Minister of Municipal Affairs and Housing to provide
enabling legislation to permit municipalities to require that campaign
surpluses accrued by municipal candidates be paid to the municipality at the
end of the election period, to help defray the costs of the municipal election;
and
4.
That the City of
Ottawa request the Minister of Municipal Affairs and Housing to provide
enabling legislation to permit municipalities to pass bylaws requiring
municipal candidates to file a preliminary list of campaign contributions
received with the City Clerk on Nomination Day (i.e. one month before Election
Day).
referred