Report to: General Committee Date Report Authored: December 4, 2009

SUBJECT: Municipal Election Contribution Rebate Program

PREPARED BY: Andrew Brouwer, Deputy Clerk, Ext. 8220

Kimberley Kitteringham, Town Clerk, Ext. 4729

RECOMMENDATIONS:

1) That the Report entitled “Municipal Election Candidate Contribution Rebate Program” be received; and,

2) That, should Council choose to implement a Municipal Election Candidate Contribution Rebate Program for the 2010 Municipal Election, it adopt Option 2 – a Revised Rebate Program (outlined in Appendix “C” attached to this Report).

4. Financial

5. Others (HR, Strategic, Affected Units) 6. Attachment(s)

PURPOSE:

The purpose of this Report is to request Council’s direction on the implementation of a Municipal Election Candidate Contribution Rebate Program (“Rebate Program”) for the 2010 municipal election.

BACKGROUND:

Section 82 of the Municipal Elections Act, 1996, (the “Act”) provides that a municipality or local board may enact a by-law that allows for the payment of rebates to individuals, corporations and/or trade unions that make contributions to candidates for office on municipal councils. Rebate programs are intended to assist municipal election candidates in their fundraising efforts and to offer an incentive for campaign contributors. Municipalities which establish Rebate Programs determine the conditions of entitlement to collect a rebate.

In November, 2005, Council passed By-law 2005-311, authorizing a Rebate Program for the 2006 Municipal Election and any By-Election held during the current term of Council, including the November 23 Ward 3 By-election. In accordance with By-law 2005-311, rebates are calculated as follows:

Contribution	Rebate
$50.00	Minimum contribution
$50.00 to $300.00	Rebate is 75% of the contribution-Maximum rebate of $225.00
Greater than $300.00 to $550.00	$225.00 plus 50% of contribution between $300.00 and $550.00
Greater than $550.00	Maximum rebate of $350.00

The cost of the Rebate Program to Markham residents in 2006 was approximately $370,000 over the past 3 years. The cost of the Rebate Program for the recent By-Election was predicted to be approximately $9,500.00.

A total of 5 municipalities (including the Town of Markham) implemented Rebate Programs for the 2006 Municipal Election (see Appendix “A”). Of these, all restricted rebate eligibility to persons as a means of encouraging greater support by individuals.

By-law 2005-311 does not provide coverage for the 2010 Municipal Election. As such, Council may choose at this time to take no action relative to this matter (which would essentially end the Rebate Program) or to implement a Rebate Program for the 2010 Municipal Election. If Council chooses to implement a Rebate Program, Council may choose to limit eligible contributions in order to reduce costs to the Town.

Individuals may file a Nomination Paper for the next Municipal Election as of January 4, 2010. Once a person has filed this documentation with the Town Clerk, they are eligible to receive campaign contributions. As such, it is strongly recommended that, should Council wish to again adopt a Candidate Contribution Rebate Program for the 2010 Municipal Election, they pass a by-law prior to January 1, 2010.

It is important to note that the proposed Good Government Act (Bill 212), which has recently received Third Reading, does not specifically affect Council’s authority relative to Rebate Programs. Once the Bill has received Royal Assent, staff will be bringing forward an information report to General Committee.

OPTIONS/DISCUSSION, FINANCIAL CONSIDERATIONS:

Staff propose the following three options for consideration by Council:

1. Option 1 – Re-implement Existing Program. Adoption of a rebate program with the same provisions as By-law 2005-311 as well as the following housekeeping amendments:

A. Elimination of the need for candidates to submit actual copies of receipts (these will be required upon request by the Clerk only);

B. Elimination of the requirement for candidates to submit all campaign expense invoices (these will be required upon request by the Clerk only); and

C. Implementation of a new provision to require candidates to submit an electronic file containing the names and contact information of contributors of $50.00 or more, including the net contribution amount to fund raisers.

A copy of the proposed By-law reflecting Option 1 is included as Appendix “B”.

2. Option 2 – Revised Rebate Program. Adoption of a rebate program incorporating the following provisions in addition to the housekeeping amendments noted in Option 1:

A. Contributors eligible for rebates include resident or non-resident owners or tenants of property in the Town of Markham only;

B. Candidates, candidates’ spouse and children be ineligible to receive rebates; and

C. A requirement for Council to pass a by-law to specifically authorize a rebate program to apply in any by-elections held during the 2010-2014 Council term.

A copy of the proposed By-law reflecting Option 2 is included as Appendix “C”.

3. Option 3 - No Rebate Program.

Options Analysis

The Town of Markham has offered a Rebate Program in the 2003 and 2006 Municipal Elections as well as the recent Ward 3 By-Election. In 2010, staff estimate that the costs of simply re-implementing By-law 2005-311 “as-is” for 2010 Municipal Election will be at least $400,000.

If Council chooses Options 1 or 2, housekeeping amendments are recommended and include minor changes to the documentation required by the Town Clerk. The proposed amendments are based on a review of administrative requirements from the 2006 Municipal Election Candidate Contribution Rebate Program and are denoted in bold and underlined in Appendices “B” and “C”.

Variations within Option 2 are possible as provided for in Subsection 82 (4) of the Act, which permits Council to “provide for the payment of different amounts to different individuals, corporations or trade unions on any basis”. The following three changes to the current By-law are recommended as part of Option 2:

A. Contributors eligible for rebates include resident or non-resident owners or tenants of property in the Town of Markham residents only

While the Act allows for a candidate in a municipal election to receive a contribution from an individual, corporation or trade union in Ontario, limiting contributors eligible for a rebate to resident or non-resident owners or tenants of property in the Town of Markham ensures the program primarily benefits Town of Markham ratepayers. From 2003 to 2006, the number of resident contributors decreased by 316, whereas the non-resident contributors increased by 448. In the 2006 Municipal Election, there were 2,229 rebate recipients (791 residents and 1,438 non-residents). The total value of rebates paid by the Town in the 2006 Municipal Election was $368,435. Of this, $135,675 (37%) was paid to Markham residents and $232,760 (63%) was paid to non-residents.

The suggestion to limit contributions to resident or non-resident owners or tenants of property in Markham was identified during the Town’s E3 exercise. Assuming the 2010 Municipal Election has a similar number of races and rebate recipients as in 2006, limiting rebates to resident or non-resident owners or tenants of property in Markham would likely reduce costs significantly.

B. Candidates, candidates’ spouse and children be ineligible for rebate

Given that the purpose of a Rebate Program is to foster participation in the electoral process by individuals, the Program’s benefit realized by candidates, their spouse or children is unnecessary given that these individuals are already fully engaged in the process. The Town of Oakville’s rebate program specifically excludes candidates, their spouse and children from eligibility. Very few candidates received a rebate in the 2006 Municipal Election.

C. A requirement for Council to pass a by-law to authorize the Rebate Program for application in a by-election during the 2010-2014 term of Council

While By-law 2005-311 included application to any by-election in the current term of Council (most recently the Ward 3 By-election), staff recommend that this be confirmed should a by-election be authorized, which provides staff with the opportunity to advise Council of any financial implications. New and amended sections in Option 2 relative to Option 1 (By-law 2005-311) are outlined in bold and strikethrough in Appendix “C”.

Next Steps

Following Council’s direction, staff will prepare any required implementing by-law for consideration at the December 15 Council meeting. The 2010 Municipal Election Candidate’s Guide and the Town’s website will be updated to reflect the provisions of the implementing by-law.

HUMAN RESOURCES CONSIDERATIONS:

Not applicable.

ALIGNMENT WITH STRATEGIC PRIORITIES:

Not applicable.

BUSINESS UNITS CONSULTED AND AFFECTED:

Legal and Finance departments have been consulted in the preparation of this report.

RECOMMENDED

BY: ________________________ ________________________

Kimberley Kitteringham, Andy Taylor,

Town Clerk Commissioner of Corporate Services

ATTACHMENTS:

Appendix “A” – Municipal Rebate Programs in Ontario

Appendix “B” – Option 1 (Status Quo based on By-law 2005-311)

Appendix “C” – Option 2 (Staff Recommended Rebate Program)

APPENDIX “A” – ONTaRIO MUNICIPAL REBATE PROGRAMS

The following Table outlines the scope and financial impact of Rebate Programs implemented across Ontario for the 2006 Municipal Election.

Municipality	Markham	Ajax	Oakville	Ottawa	Toronto
Electoral Population	164,151	63,418	112,458	560,431	1,421,144
Voter turnout	35%	23%	35%	54%	39%
Non-resident eligible	Yes	Yes	No	Yes	Yes
Corporation or trade union eligible	No	No	No	No	No
Contributor must apply for rebate	No	Yes	Yes	Yes	Yes
Excludes candidate, spouse or children of candidate	No	No	Yes	No	No
Minimum contribution eligible for a rebate	$50	$25	$25	$50	$25
Maximum allowable rebate	$350	$150	$200	$187.50	$1,000
Contributor must apply for rebate	No	Yes	Yes	Yes	Yes
Audited statement required	Yes	No	No	Yes	Yes
Surplus funds become property of municipality	Yes	No	Yes	No	Yes
Total contributions eligible under program	$628,115	$31,252	$77,000	$1,403,594	$4,630,053
Total rebates issued	$368,435	$16,364	$25,008	$503,333	$2,116,030
Number of candidates eligible to use program	55	23	37	99	313
Number of candidates that used program	38 (69%)	12 (52%)	14 (38%)	64 (65%)	165 (53%)
Number of candidates elected who used program (excludes acclamations)	11 out of 13	4 out of 7	4 out of 13	20 out of 24	41 out of 45

The cities of Ottawa and Toronto as well as the towns of Ajax and Oakville plan to continue with a rebate program for the 2010 Municipal Election. The cities of London and Hamilton have recently considered but did not move forward with the implementation of a rebate for the 2010 Municipal Election.

APPENDIX “B” - Option 1

Status quo

(with housekeeping amendments)

BY-LAW 2009-xxx

A By-law to authorize the payment of rebates to

residents of the Province of Ontario who make contributions to candidates for an

office on the Town of Markham municipal council

for the 2010 Municipal Election and any By-election held during the

2010 – 2014 term of office

WHEREAS subsection 82(1) of the Municipal Elections Act, 1996, as amended (“the Act”) provides that a municipality may, by by-law, provide for the payment of rebates to persons who make contributions to candidates for an office on the municipal council;

THEREFORE THE COUNCIL OF THE CORPORATION OF THE TOWN OF MARKHAM ENACTS AS FOLLOWS:

1. The payment of rebates to individuals who are residents in the Province of Ontario who make financial contributions to candidates for an office on the municipal council for the 2010 Municipal Election and any By-election during the 2010-2014 term of office is authorized.

2. Notwithstanding section 66 of the Act, the following are not eligible for a contribution rebate:

a) contribution of goods and services;

b) a candidate’s contribution of inventory from a prior election;

c) contributions made by corporations and trade unions.

3. Notwithstanding section 66 of the Act, only the net contribution from a fundraising event shall quality for a rebate.

4. The application for rebate shall be in the form established for that purpose by the Clerk, which shall include a receipt in the form provided by the Clerk that is signed by, or on behalf of, the candidate.

5. A candidate for an office on the municipal council who participates in the rebate program:

a. shall comply with subsections 78(1) to (4) of the Act; and

b. shall include with the documents filed under subsection 78(1) or (2) of the Act, as the case may be:

· a copy of the receipt issued for the contribution if requested by the Clerk,

· a copy of all campaign expense invoices incurred as part of the campaign if requested by the Clerk,

· an electronic file containing a list of contributors $50.00 or more, including the net contribution amount to fund raisers in the format prescribed by the Clerk,

· a separate list of contributors to fund raising events, and

· an auditor’s statement that the auditor has verified all contributions against a bank statement for the campaign account.

6. A candidate who is not participating in the rebate program shall notify their contributors and obtain their consent in writing that their contribution will not be submitted for a rebate.

7. The Clerk shall pay the contributor a rebate in accordance with section 8, if the following conditions are met:

a. the application complies with the provisions of this by-law;

b. the candidate has complied with the provisions of the Act and has filed a financial statement and auditor’s report in accordance with Section 78(1) of the Act;

c. the Clerk is satisfied with the receipt filed by the candidate if requested to be provided;

d. the Clerk is satisfied with the campaign expense invoices submitted by the candidate if requested to be provided;

e. the Clerk is satisfied that the candidate has filed the documents required by section 78 of the Act by the relevant filing date, and that no such document shows on it face that the candidate has incurred expenses exceeding what is permitted under section 76 of the Act;

f. the Clerk is satisfied that the candidate has paid any campaign surplus to the Corporation; and

g. the candidate has agreed to participate in the rebate program established by this By-law.

8. The rebate shall be calculated as follows:

a. the minimum contribution qualifying for a rebate shall be $50.00;

b. if the contribution is $300.00 or less, the rebate is 75 per cent of the contribution;

c. if the contribution is greater than $300.00, the rebate is 75 percent of $300.00 plus 50 percent of the difference between the total contribution and $300.00, to a maximum rebate of $350.00 regardless of the number of contributions made by any individual eligible contributor.

READ A FIRST, SECOND, AND THIRD TIME AND PASSED THIS

15^th DAY OF DECEMBER, 2009.

_______________________________ ______________________________

KIMBERLEY KITTERINGHAM FRANK SCARPITTI

TOWN CLERK MAYOR

APPENDIX “B” - Option 2

staff recommended rebate program

(with Housekeeping amendments)

BY-LAW 2009-xxx

A By-law to authorize the payment of rebates to

resident or non-resident owners or tenants of property in the Town of Markham

who make contributions to candidates for an

office on the Town of Markham municipal council

for the 2010 Municipal Election ~~and any By-election during the~~

~~2006-2009 term of office~~

THEREFORE THE COUNCIL OF THE CORPORATION OF THE TOWN OF MARKHAM ENACTS AS FOLLOWS:

1. The payment of rebates to individuals who are resident or non-resident owners or tenants of property in the Town of Markham ~~the Province of Ontario~~ who make financial contributions to candidates for an office on the municipal council for the 2010 Municipal Election ~~and any By-election during the 2010-2014 term of office is authorized.~~

2. Notwithstanding section 66 of the Act, the following are not eligible for a contribution rebate:

a) contribution of goods and services;

b) a candidate’s contribution of inventory from a prior election;

c) contributions made by corporations and trade unions;

d) contributions made by a candidate, a candidate’s spouse and his or her children.