Developer donations dominate municipal politics
June 3, 2006

A detailed picture of developer domination of municipal election campaigns has emerged from a comprehensive study by York University professor Robert MacDermid of campaign donations in Toronto and nine of its major suburbs.

"The development industry is by the far the largest segment of corporate and of all contributions in all communities [studied]" concludes MacDermid. "This is not surprising given the political economy of the development industry and the vital role that municipal politics plays in the creation of profit."

The study examined 2003 campaign donations in Oshawa, Whitby, Ajax, Pickering, Markham, Richmond Hill, Vaughan, Brampton, Mississauga and Toronto. It was released on Thursday and received extensive coverage in the Globe and Mail and Toronto Star and on CBC, but not in Hamilton.

MacDermid found that corporations provided 93.5% of the campaign donations to the mayor of Markham and more than four-fifths of the donations for each of the mayors of Vaughan, Whitby, Oshawa and Pickering. Corporations provided more than 80% of funds to fully one-quarter of the candidates that reported donations, including 58 elected officials.

"The dominance of corporate funding in the suburban municipalities, largely funding from the development industry., makes those politicians reliant on those interests for election funding and gives those corporations, and the individuals that own and control them, political capital that citizens have difficulty challenging," says MacDermid's report.

Corporations provided 66.3% of all campaign donations over $100 in the nine suburban municipalities. Individuals gave 15.4% and unions contributed 1.7% with the rest coming in monies from the candidates themselves. When the candidates' own money is excluded - corporate donations account for almost 81% of remaining donations.

MacDermid further calculated that more than two-thirds (68.2%) of those corporate donations came from the development sector.

"The reliance of municipal candidates in this study on the development industry (developers plus building services and contractors) for campaign funds is undoubtedly far greater than the reliance of any other group of candidates on any one industry at any other level of government in Canada," says MacDermid, cautioning that even these numbers are understated.

"It is important to note that figures for the contributions from the development industry are certainly underestimates since they do not include contributions from individuals who are themselves developers or work for developers, nor do they include a number of contributors who could not be identified but are likely to be connected to the development industry, nor do they include contributions from individuals and some firms, such as lawyers and law firms, that do significant work for the development industry."

Corporate donors played a smaller role in the city of Toronto than in its suburbs, especially in the mayoralty race where winner David Miller got only 21% of his donations from corporate sources. However, development backed candidates won a majority of the seats on the 44 member council, and it's clear to MacDermid that this was an organized effort.

"In 16 of the 28 wards where the candidate that received the most funds from the development industry won, the losing candidate received not a penny from the development industry," notes MacDermid.

He argues this pattern shows coordination between developers and points to evidence of similar behaviour that was revealed by the Bellamy Inquiry into the computer leasing scandal that rocked Toronto City Hall in 2002.

"Normally, Jeff Lyons would ask donors to make out cheques payable to various candidates, each cheque for an amount equal to or under the legal campaign donation limit. When he had a few cheques for a particular candidate, he would bundle them together and deliver them to the candidate with his usual cheery covering letter." (Bellamy, Volume 1, 403)

While MacDermid didn't include Hamilton in his study, he makes a brief reference to local efforts to expose illegal donations to several candidates, noting this has shown the difficulties for citizens to verify corporate information and the need for enforcement by an independent agency.

His study also suggests that the domination of municipal government by developers has produced "cities that are automobile dependent, unfriendly to mass transit, lacking the density to support other services and dependent on urban infrastructure outside the boundaries of their municipalities."

MacDermid argues that citizens bear some responsibility for the corporate domination of municipal politics. "The lack of citizen interest in financially supporting candidates [has] meant that corporate funding filled or commanded the resulting vacuum of citizen political interest."

He notes, for example, that only 25 individuals made donations of more than $100 in Whitby, while in Ajax the number was 105 out of 54,500 eligible voters. MacDermid thinks these tiny numbers "suggest that few candidates outside of Toronto organize campaigns that mobilize groups of citizens and few citizens' groups of any size organize themselves to support a candidate."

Only in Toronto did he find evidence of extensive citizen involvement as shown by the fact that over half of the donations there came from individuals and less than a third from corporations.

MacDermid's full report can be found at
http://www.cpsa-acsp.ca/papers-2006/MacDermid.pdf.