Speech for second reading of bill to eliminate political donations from corporations and trade unions

Here is the text of my speech written in the language in which it was spoken.

It’s time that New Brunswick eliminate the role corporate money plays in politics. And the role politics plays in the spending decisions of businesses, and even some organizations and municipalities. A “pay to play” culture has existed across multiple governments over many years. I am speaking about the notion that corporate donations to the political party in power are necessary to increase the chances of securing decisions favourable to the interest of that corporation.

I am not talking about donations to an election campaign, I am referring to corporate donations made during the mandate of the political party that holds power. And I am not talking about donations from a partisan perspective. As I will demonstrate, the largest portion of corporate donations are not made from a partisan perspective. But I am talking about the negative impact this has on our democracy.

Bill 20, An Act to Amend the Political Financing Act is the first step to end the “pay to play” culture that permeates politics and corrodes our democracy. If adopted, Bill 20 will ban political donations from corporations and unions to political parties, candidates and leadership contestants.

Nova Scotia, Québec, Ontario, Manitoba, Alberta and the federal government have all banned political donation from corporations and trade unions, in many cases by a unanimous vote in their respective parliaments. We, the assembled representatives of the people of New Brunswick can follow suit by passing this bill.

There are two problems with the “pay to play” culture.

The obvious problem is where corporations make donations with the expectation of greasing the wheels for something they are seeking from government to benefit their self-interest, be it regulatory change, legislative change, policy change, the awarding of a contract, consulting work, or financial assistance.

This undermines the integrity of our democratic system. It alienates citizens, creates public cynicism about our democratic institutions and results in disenfranchisement from our democratic process. As a society, we end up with a population of passive citizens who in increasing numbers see no reason to vote, never mind pay attention to the work of their elected representatives.

The other problem is for small businesses, clubs, or even municipalities who feel they must make a political donation to qualify for government funding or other financial support publicly available through a department or program. The perception being if you don’t pay, you don’t get to play. That is, you may lose out on a grant, loan or purchase order if you don’t pay up. In the case of municipalities and those non-profit organizations dependent on public funding, it is public funding that is being redirected to the political coffers of the government of the day.

Whether or not one can make a direct connection from the donations of a particular donor to a specific financial, policy, regulatory or legislative outcome, the belief that this is the case, undermines the faith of New Brunswickers in our democracy.

This impact is exacerbated by government’s willingness to register numbered corporations, whose beneficial ownership is hidden. So despite the public disclosure rules, you can’t know who is behind a numbered company that makes a corporate donation.

As I said, the scale of corporate donations is not simply a question of political partisans donating to their favourite team through their company. The record shows that corporate donations skyrocket for the political party that takes power and remain high year in and year out during that party’s mandate in government.

This has been the pattern for years, so the corporate sector must belief there is a pay-off for them when they make annual donations to the political party in power over the course of its mandate.

From 2006 to 2010, the Liberal government of the day received 64.3% of all corporate donations made to political parties, totaling $2.5 million. Over the four year term of the Alward government, from 2010 to 2014 corporations donated two thirds of their political contributions to the Tories, for a total of $2.6 million.

Looking at a single year in the middle of a government mandate is instructive. In 2012, when the Tories last formed the government, their corporate donations for that year totaled $618 thousand dollars. The Liberals, who were the Official Opposition in that year, received just $54 thousand dollars in corporate donations. The reverse is true when the Liberals form government and the Tories are the Official Opposition as is the case today.

Fast forward to 2015. The Liberals are the government again. Their corporate donations climbed to $451 thousand dollars in that year, while the Tories as Official opposition saw their corporate donations plunge to $81 thousand dollars. Without a doubt, corporations believe you have to pay to play.

Interestingly enough, psychologists tell us that the inducement effect of these political donations is not particularly related to their size. It is the act of making the donation that instills a sense of obligation to reciprocate in some manner.

This “pay to play” culture costs New Brunswickers as well, since corporations are eligible for tax credits in return for their political donations. Over a 14 year period, we lost over a million dollars in revenue paid out to corporations who “paid to play”.

I don’t pretend for a minute that prohibiting corporate donations to political parties will end corporate influence over government decision-making, but it is a start. The unstated social contract between government and those corporations that have enjoyed insider status will have to be torn up to make a giant leap forward, but this bill is a beginning.