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Power lines run out of the the Hydro One Claireville Transfer Station in Vaughan, Ont. (Tim Fraser For The Globe and Mail)
Power lines run out of the the Hydro One Claireville Transfer Station in Vaughan, Ont. (Tim Fraser For The Globe and Mail)

Hydro One players paid for exclusive access to Ontario cabinet ministers Add to ...

One of the banks that ran the lucrative privatization of Hydro One promoted a $7,500-per-person fundraiser for the two Ontario provincial cabinet ministers in charge of the sale, The Globe and Mail has learned.

The event on Dec. 7, 2015, which featured Finance Minister Charles Sousa and Energy Minister Bob Chiarelli, appears to have raised about $165,000 for the Liberals.

The fundraiser was promoted by Bank of Nova Scotia, one of the lead underwriters for Hydro One’s initial public offering. In an e-mail last fall encouraging other financial executives to attend, John Sherrington, vice-chairman of global investment banking for Scotiabank, wrote that he was “honorary chair” of the event and described it as a chance for “a small group of senior executives to spend an informal evening with the Ministers of Energy & Finance.”

Other e-mails obtained by The Globe indicate at least 22 people agreed to attend, including executives representing other members of the Hydro One syndicate: RBC, TD, CIBC, Goldman Sachs, Barclays and Raymond James. One e-mail makes explicit reference to the Hydro One IPO.

Collectively, banks in the syndicate made nearly $29.3-million from the Hydro One privatization.

The fundraiser took place a little more than a month after the IPO, in which 15 per cent of the government-owned electricity company was sold on the TSX for $1.8-billion. Premier Kathleen Wynne plans to sell 60 per cent of the company to raise $4-billion to pay for new transit lines – which critics argue will cost the province in the long run in lost dividends and take crucial energy infrastructure out of public control.

Mr. Sousa’s and Mr. Chiarelli’s offices referred questions on the fundraiser to Ms. Wynne’s staff. The Premier’s spokesman, Jean-Simon Farrah, would not answer questions on the appropriateness of companies that are doing business with the government being involved with big-ticket fundraisers for the Liberal Party. In an e-mail, he described such activities as “part of the democratic process. It is how some people or entities engage themselves.”

In a statement, Scotiabank spokesman Rick Roth said the bank “abides by political donation rules” and gives money to politicians of all stripes. “Scotiabank participates and supports the democratic process through all political parties. Business and community leaders regularly host political fundraisers,” he said.

A furor has erupted recently over Ontario’s lax campaign finance laws and the Liberals’ practice of selling access to Ms. Wynne, her cabinet and high-ranking political staffers at events that are not made public.

Earlier this month, The Globe revealed that Ms. Wynne and Mr. Chiarelli teamed up with lobbyists at Sussex Strategy Group to hold a $6,000-a-person cocktail fundraiser at Toronto’s posh Four Seasons Hotel targeted at energy-industry insiders. The evening was billed to the people invited as an opportunity for “one-on-one” access to the politicians. On Tuesday, The Toronto Star reported that Ontario cabinet ministers each have fundraising targets of up to $500,000 a year.

Some lobbyists who deal with the Ontario government told The Globe that Liberal operatives regularly tell people who want to discuss policy to attend party fundraisers to get their issue heard. The lobbyists, speaking on condition of anonymity, said they would actually welcome stricter campaign finance rules to stop the Liberals from constantly shaking them down for donations.

On Tuesday, the Premier tried to quiet the storm by promising “significant changes” to the law.

“The government will bring forward a plan in the fall,” she told reporters. “And that will include new rules on third-party advertising. We talked about that. It will also include transitioning away from corporate and union donations, lowering the annual donation limit.”

Ms. Wynne provided no details, and said many of the reforms will not come into effect until after the next election in 2018.

Under Ontario’s current rules, corporations and trade unions can donate at the provincial level despite being banned from doing so federally. The donation cap is $9,975 annually, and loopholes allow donors to give several times that amount. A corporation can donate the full cap amount through each of its subsidiaries – or a union through each of its locals – and donations during a general election or by-election period do not count towards the annual cap.

Third parties face few restrictions on what they can do to influence an election. One union umbrella group, Working Families, spent nearly $2.5-million in the last campaign, mostly on ads attacking the Progressive Conservative Party.

Campaign finance expert Robert MacDermid said the trend toward smaller, unpublicized, more expensive fundraisers is “alarming.” At a large-scale public event, for instance, an individual donor is unlikely to get a chance to lobby the Premier or cabinet ministers. But more exclusive events effectively provide access to politicians for a price.

“This is very wealthy people buying access to influence government about decisions that may be of value to them. When somebody pays $7,500 to have a meal with somebody, they’re obviously not talking about the Blue Jays,” said Dr. MacDermid, a political science professor at York University in Toronto. “Government should not be selling influence in that way, and companies should not be paying for it if they respect the democratic process.”

Donors could also use such events to skirt lobbying rules: Usually, lobbyists must register with the province’s integrity commissioner and have their name and their lobbying topic posted online. But Dr. MacDermid said the rules are vague enough that a lobbyist could instead go to a fundraiser, talk to politicians there and not register.

“You can buy a ticket for a fundraiser and not be classed as a lobbyist, and in that way, it’s a huge loophole,” he said.

Campaign finance has been front and centre across the country in recent weeks. The Globe revealed Tuesday that the B.C. Liberal Party sometimes charges up to $20,000 for admission to Premier Christy Clark’s fundraisers, as the province has no limits on what people can donate. Alberta Premier Rachel Notley banned corporate and union donations last year – but jetted to Toronto in February to host a $9,975-a-plate fundraiser for Ontario NDP Leader Andrea Horwath.

And in Quebec earlier this month, two former cabinet ministers were arrested and accused of receiving illegal donations in exchange for political favours for construction companies.

The significant difference is that many campaign fundraising practices that are illegal in Quebec – the province bans corporate and union donations, and imposes a $100 annual cap on contributions from individuals – are allowed in Ontario.

Dr. MacDermid said the difficulty in imposing stricter campaign finance laws in Ontario will be finding an alternative source of funds for the parties. One option is a per-vote subsidy, although that could prove unpopular with voters. Another would be imposing a tighter cap on campaign spending to make it feasible for parties to raise the full amount through small donations from individuals.

At the very least, Dr. MacDermid contends, the government must bring the $9,975 cap down and close loopholes to ensure rich people are not unduly influencing politics.

“Right now, the caps are so high that, really, people can influence to their heart’s delight,” he said. “People who’ve got the money, they can’t really exhaust their willingness to spend. It’s a system in Ontario now that doesn’t control influence in any meaningful way.”

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