'Loophole' in civic election act breeds unfairness and financial secrecy, experts say

A section of Ontario's Municipal Elections Act creates an unequal playing field, undermines financial transparency and should be changed, election experts say.

Concerns have been raised about a part of the legislation that allows a corporation to pay an employee while volunteering for a political campaign after a Toronto man revealed on Twitter he was paid by a lobbying firm to help campaign for candidates in the 2018 civic election.

Kevin Haynes told CBC Toronto he felt like an "election hitman" when he was paid $20 per hour in cash by a major lobbying group to knock on doors for nine candidates, seven of whom won.

Under the Municipal Elections Act, corporations and unions aren't allowed to donate or contribute to a candidate's campaign — no matter the amount.

But a subsection of the act reads:

"The value of services provided voluntarily, under the direction of the person or the individual, corporation or trade union, by an employee whose compensation from all sources for providing the services does not exceed the compensation the employee would normally receive for the period the services are provided."

Simply put, an employee of a corporation or union can "volunteer" with a candidate's campaign during work hours and still get paid by their employer, as long as its not extra. That time and money is not considered a contribution, therefore, it doesn't need to be disclosed.

"It's an unprincipled loophole that should be closed," elections lawyer Stephen Aylward said.

'Completely invisible' contributions

Aylward says it's very difficult to justify the loophole on any policy grounds and notes there's no limit on the amount of time a volunteer can spend on a campaign.

"It seems like it's a form of contribution that is completely invisible to the accountability process that is set out under the Municipal Elections Act," he said.

Dave Meslin, a municipal election expert who wrote a book on democracy, says Haynes's case is likely just the tip of the iceberg.

He says the loophole allows unions and corporations to contribute an "infinite amount of resources" toward an election campaign, with no requirements for transparency or disclosure.  

"That loophole seems to me to undo all the other protections that we've created to make sure that campaign finance is transparent and accessible," he said. 

"[It] seems like it allows an endless amount of money to be spent without any recording whatsoever."

Unfair election process

Aylward says ultimately the legislation creates an unfair playing field for candidates, which goes against the whole purpose of election finance laws.

"This loophole creates a serious weakness in the regulation of municipal campaign finances and to that extent risks giving a significant advantage to candidates with the best connections to large corporations or unions," he said.

Meslin says that inequality can then extend to council chambers because it ultimately pits residents advocating for an issue against councillors tied to lobby groups.

"All those lobbyists are now owed favours," he said. 

He'd like to see more transparency and public financing of election campaigns so candidates don't have to look for corporate backers.

"Everyone's trying to influence the process for their own interests," Meslin said. "The people who get left out and unheard are the ordinary citizens." 

Long-time concerns

Toronto city council brought forward concerns about the legislation being "exploited" to the mayor's executive committee in 2009. The councillors wanted the province to amend that part of the act so compensation employees receive for volunteer work on municipal election campaigns could be defined as contributions.

"This is a major issue in Toronto's elections with trade unions paying employees to volunteer on various candidates' campaigns," the motion reads.

"In the spirit of the electoral reform package adopted by City Council, further investigation of the Municipal Election Act, 1996, has identified a loophole that is currently exploited by trade unions and corporations to influence the outcome of municipal elections." 

The legislation was never changed. 

When asked about the act and previous council concerns, the city's chief communications officer Brad Ross said the city is aware of the tweet by Haynes and is reviewing the matter.

A spokesperson for the Ontario Ministry of Municipal Affairs and Housing says the ministry reviews the Municipal Elections Act after each municipal election and the minister would review any feedback from local officials.

"Our government has not received a request from Toronto city council on this matter," spokesperson Rachel Widakdo said in a statement.