Summary of the Proposed Election Finances Statute Law Amendment Act (Compendium)
The Election Finances Act complements the Election Act by setting out a regime under which parties, candidates and other participants in the electoral process are allowed to raise and spend money. It provides that most of the participants must register with the Chief Electoral Officer (CEO) in order for their status to be a matter of public record. It then imposes limits on most registered participants with respect to how much they can accept in contributions for their activities and how much they can spend. It also provides for operational controls (such as the appointment of a chief financial officer) and audits of the results, among other rules.
The government proposes to introduce a bill that, if passed, would amend the existing regime in several ways.
First, it expands the list of regulated participants in the electoral process to cover people who are seeking nomination as a candidate of a registered political party. Nomination contestants have to register as such with the CEO and be subject to limits on contributions and spending as well as to reporting and audit requirements similar to those applicable to other participants.
The rules for people seeking to be leader of a party are amended to change the time at which a person is deemed to be such a candidate - any time he or she accepts contributions or incurs expenses, after a vacancy has arisen - and requires registration at that time.
Contributions to participants from corporations and unions are prohibited (both the giving and the accepting of such contributions). Participants will have to raise their money from individuals, or from their personal funds, subject to limits. This rule is to come into force on January 1, 2017.
As unions are no longer eligible contributors, union check-off is no longer permitted.
The amounts that people are allowed to contribute to participants are reduced from current levels. Contributions to parties as well as to candidates and constituency associations of a party are reduced, while contributions to any one candidate or constituency association are slightly raised.
The standard maximum contribution in the bill, effective in 2017 and subject to annual indexation, is $1,550 in a contribution period. Contributors are allowed to give up to this amount to a political party annually, and up to the same amount to a single candidate to a total of $3,100 to all candidates of a party in an election period. People may also give the same $1,550 and $3,100 amounts to nomination candidates and constituency associations (combined) of a party annually.
The same dollar limit applies to contributions to independent candidates in total, as well as to each contestant for the leadership of a registered party annually from registration and during the leadership contest.
A candidate may contribute up to $5,000 of personal funds to his or her own campaign, and a leadership contestant up to $25,000. Unlike the other limits, these figures are not subject to annual adjustment for inflation.
The election contribution period to political parties is eliminated.
Loans and guarantees
The rules governing making loans to participants are made stricter. They must be paid back within two years. Loan guarantees are treated as contributions.
Guarantees of loans are also restricted. They may be made only by financial institutions or persons entitled to make contributions.
An allowance is to be given from public funds to political parties, in an amount based on the number of votes a party has received in the previous general election. The amounts are to be calculated and paid quarterly. The payments are to be made to a registered party whose candidates received at least two per cent of the total votes cast or five per cent of the votes cast in the electoral districts where the party presented candidates.
The amount of allowance per vote received is set out in the bill. It decreases slightly each year thereafter to 75 per cent of its 2017 level in 2021. The allowance rules are to be reviewed by the Lieutenant Governor in Council before the end of 2021.
Political advertising by political parties is limited to one million dollars in the six months before a scheduled general election campaign begins. The existing limits on spending during the campaign are not changed.
Political advertising by third parties, that is, by people or entities that are not associated with political parties, constituency associations, or candidates, is limited to $100,000 across the province, including a maximum of $4,000 per electoral district, during election campaigns. In the six months leading up to the formal campaign period, they may spend six times those amounts.
The pre-election-period limits do not apply to a general election not held according to the fixed dates in the Election Act.
The bill prohibits collusion to avoid these limits, such as by an organization that splits itself into more than one entity. Collusion between a political party or candidate and a third party is addressed by prohibiting non-arm's-length third-party advertising.
The registration and reporting requirements applicable to third parties that engage in political advertising are updated.
Political advertising is redefined to apply not only to direct support of, or opposition to, a political party or candidate, but also to advertising on an issue associated with the position of a registered party or candidate.
Nomination contestants are limited to spending 20 percent of the amount allowed for a candidate in the previous election in the same constituency.
Expense Reimbursements and Audit Subsidies
The existing expense reimbursement payments made by the CEO to candidates after an election are made available to a candidate who receives ten per cent of the votes cast in the electoral district, a reduction from the current minimum of 15 per cent.
Nomination contestants are made eligible for auditor subsidies paid by the CEO for audit expenses. A nomination contestant is required to have an Auditor if the contestant raise or spends at least $10,000 in the nomination contest.
The contribution and spending limits are generally subject to indexation for inflation. The indexation is now to be put on an annual basis, according to the Consumer Price Index for Ontario.
Under the Taxation Act, 2007, contributors to political parties, constituency associations and candidates are allowed a tax credit for their contributions. The bill would amend that Act to allow a credit for contributions to leadership contestants.