Tuesday, January 28, 2003

OTTAWA -- Today, Democracy Watch revealed details of the reliance of federal political parties on large donations from corporations and unions, and called on Prime Minister Jean Chrétien and Parliament to ensure changes to the donations law, expected to be introduced tomorrow, end this undemocratic reliance on wealthy interests.

"If corporations and other organizations are allowed to make donations, and donations from individuals are not strictly limited, wealthy interests will exploit loopholes in the system to continue using money as an undemocratic lever of influence over politicians," said Aaron Freeman, Democracy Watch Board member and Chair of the nation-wide Money in Politics Coalition.

According to Elections Canada data for 2001, almost all the parties in the House of Commons rely greatly on a small number of big donors:

• of the largest 100 donors to the Liberals, 95 were corporations, corporate associations or corporate law firms and they donated a total of just over $2.5 million (for an average donation of $26,315), while the Liberals received $6.3 million total from 2,300 corporations;
• of the largest 100 donors to the Canadian Alliance, 95 were corporations or corporate law firms and they donated a total of just over $764,000 (for an average donation of $8,042), while the Alliance received $874,000 total from corporations;
• of the largest 100 donors to the Tories, 88 were corporations, corporate associations or corporate law firms and they donated a total of just over $942,000 (for an average donation of $10,704);
• of the largest 15 donors to the NDP, 14 were unions or labour organizations and they donated almost $1.2 million total (for an average donation of $80,000); and
• the BQ used to follow the Quebec system and only accept donations from individuals, but they abandoned that practice in 2001; as a result, 9 of their top 10 donors became corporations, donating a total of almost $32,000 (for an average donation of $3,555) while their top donor was the Parti Quebecois at $26,133.

Also according to Elections Canada, overall 3% of party donors give 45% of the money, a recipe for corruption that allows wealthy interests to use money as a means of influencing politicians.

Not surprisingly, the largest corporate donors to the Liberals continue to be those with a high stake in federal government decisions. For example, in 2001 Bombardier Inc. made the largest single donation ($142,503 to the Liberals -- Bombardier was the second largest federal government contractor in 2001 with a total of over $117 million in contracts, and also received contracts worth more than $100 million in 2002). The Big 5 banks and their subsidiaries donated a total of just over $325,000, 8 telecommunications companies (including broadcasters) donated a total of just over $302,000, while 8 oil and gas companies donated a total of just over $267,000.

It should also be noted that donation totals were considerably lower in 2001 than in 2000 when, as usual during election years, donations increased as a result of election campaign fundraising. As a result, in 2000 the top 100 Liberal donors, all corporations, donated more than $4.2 million (corporations donated a total of more than $12 million to the Liberals in 2000, out of a overall donations total of $20 million). The Canadian Alliance raised over $19 million in 2000, including $1.8 million from its top 25 donors, all of which were corporations (corporations donated a total of $7 million to the Alliance). Because of a gap in the federal law, annual donations are not required to be disclosed until the following July, so donations from 2002 will not be disclosed until July 2003.

According to media reports, the Prime Minister's bill will propose to partially ban corporate donations, to fully ban union and interest group donations, to limit individual donations to $10,000, and to require increased disclosure of donations. Democracy Watch believes that while Chrétien's proposals would take some steps forward, they are not strong enough to ensure that wealthy interests can't use money to unduly influence politicians.

"If small businesses are allowed to donate, it will be too easy for large corporations to set up and route donations through multiple small business subsidiaries, especially if any donations are still allowed to be made in secret," said Freeman.

National surveys in the past few years have shown that Canadians are very concerned about the influence of wealthy interests on government. A recent poll by Environics found that 65% of Canadians support a ban on corporate and union donations.

Democracy Watch called on the Prime Minister and all political parties to address Canadians' concerns by ensuring the new donations system includes the following measures (all of which are supported by the nation-wide Money in Politics Coalition, made up of 50 citizen groups with a total membership of 3 million Canadians):

• a complete ban on donations from corporations, unions and other organizations (as in Manitoba and Quebec);
• a limit of $1,000 on donations from individuals (similar to Manitoba and Quebec);
• disclosure every 3 months of the full identities of donors (including place of employment or union) of amounts above $100, whether the donation is made directly or indirectly to a political party, MP, riding association, Senator, or riding association (similar to the U.S.);
• disclosure of donations before any election vote, including a vote for party leader (similar to the U.S.);
• an anti-avoidance measure to prohibit corporations or other organizations from routing donations through employees or members (similar to the anti-avoidance measure in the Income Tax Act); and
• enforcement by Elections Canada, with all donations available in searchable format on the Elections Canada website.