Alberta's NDP Government's Flagship Bill Bans Corporate and Union Donations to Political Parties in Alberta

Written By Will Osler and Elyse P. van Spronsen

On June 23, 2015, the Alberta legislature unanimously passed the first bill of Alberta's new NDP government. Bill 1, An Act to Renew Democracy in Alberta passed in third reading with the unanimous support of all parties, including the Wildrose Alliance and the Progressive Conservatives.

Bill 1 will ban donations to political parties from corporations, trade unions and employee organizations, as well as persons not normally resident in Alberta retroactively to June 15, 2015.

Background

On June 15, 2015, Bill 1 was tabled in the Alberta legislature to amend the Election Finances and Contributions Disclosure Act, which governs financial contributions to provincial political parties in Alberta. Bill 1 passed third reading on June 23, 2015 and upon receiving royal assent, will ban donations retroactively to June 15, 2015. In addition, the NDP and Wildrose Party have jointly proposed an all-party committee to evaluate Bill 1 and possibly recommend further changes to the rules for political donations in Alberta.

Election procedures for municipalities are governed by the Local Authorities Elections Act, which was most recently amended in 2009 to cap municipal election donations by any person, corporation, trade union or employee organization to $5,000 in any given year. Municipal election financing governed by the Local Authorities Elections Act will not be affected by Bill 1.

Key Provisions of Bill 1

Bill 1 is expected to reform provincial election financing by prohibiting political contributions from non-individuals, such as corporations, trade unions and employee organizations, as well as from individuals who are not normally resident in Alberta.

Most notably, Bill 1 will:

• prohibit contributions by corporations, trade unions or employee organizations to a registered party, registered constituency association or registered candidate in Alberta;
• prohibit contributions by individuals who are not normally resident in Alberta to a registered party, registered constituency association or registered candidate in Alberta;
• confirm that contribution limits for individuals ordinarily resident in Alberta will remain unchanged at $15,000 annually to each registered party, $1,000 annually to any registered constituency association and $5,000 in the aggregate to the registered constituency associations of each registered party. Contributions in a campaign period will remain limited to $30,000 to each registered party, less any individual amount already contributed to the party in that calendar year;
• eliminate contributions from persons where funds to not actually belong to that person or have been given to the person or entity for the purpose of making a contribution of funds to a registered party, constituency association or candidate; and
• prohibit corporations, trade unions, employee organizations and individuals not normally resident in Alberta from making loans directly to a registered party, constituency organization or candidate. However, they may sign, co-sign or otherwise guarantee or provide collateral security for any loan or monetary obligation of the registered party, constituency association or candidate.

Prior to Bill 1, a person, corporation, trade union or employee organization was permitted to make contributions of up to $15,000 annually, or up to $30,000 during a campaign period. Trade unions or employee organizations were also permitted to make contributions of up to $0.15 per month through payroll deductions to the maximum annual or campaign period limit imposed on the union. The new restrictions will prohibit financial contributions from these groups and, through a ban on contributions not belonging to the contributor, eliminate donations from unincorporated associations or organizations.

Bill 1 has received criticism for continuing to allow individual contributions of up to $30,000 in a campaign year. In addition, while corporations, trade unions and employee organizations will now be prohibited from making financial contributions to political parties, they will be permitted to guarantee loans or provide collateral security for any loan, obligation or indebtedness of a registered party, constituency organization or candidate. Proposed amendments by the Wildrose calling for a ban on corporate backstopping of loans were ultimately rejected, however Bill 1 does provide that any loan payments made by a corporation, trade union or employee organization in the event of a default by the registered party, constituency association or candidate (the borrower) must be reimbursed by the borrower.

Critics have also cautioned that Bill 1 fails to address a potential loophole in that it will not prevent a corporation from donating an employee's paid time to a political party in lieu of direct monetary contributions. However, the NDP has indicated that Bill 1 is a first step towards democratic reform that will be further examined by the newly proposed all-party legislative committee, suggesting there may be further changes to come. The timing and mandate for the all-party committee has not yet been announced.