Developers generally get the candidates they want elected into municipal office - and they get the policy decisions they want as well.
By Ryan McGreal
Published August 18, 2009
In the 2006 Hamilton municipal election, a campaign by Citizens at City Hall (CATCH) challenged local candidates to voluntarily refuse corporate and union donations. The responses were varied, tending to break into three distinct positions:
In fact, most of the incumbent councillors who won re-election never responded at all - councillors like Tom Jackson, who collected so much corporate money that he had to throw a $13,334 "voting day party" for his supporters to avoid running afoul of election rules.
Late last year, a campaign to ban corporate and union donations in Toronto made it to City Hall. Toronto has more powers than most Ontario municipalities via the City of Toronto Act, and its executive committee voted in January to ask staff for a draft bylaw that would outlaw both corporate and union donations.
Not long after, Ajax Mayor Steve Parish wrote an op-ed for the Toronto Star that pulled no punches in its critique of the sprawl industry - its political practices, its role in influencing public policy, and its long-term effects on city development.
In an interview with Raise the Hammer, Parish insisted the only solution is to "Ban developer contributions to municipal candidates!" He also called on the Province to push back when municipalities like Durham Region try to pass growth plans that continue sprawling patterns of development.
In a somewhat surprsing decision last week, Hamilton's City Council voted nine to five to ask the province for the right to ban corporate and union donations. It joins Ajax in calling for the change in municipal rules.
Of course, some councillors balked. Ancaster Councillor Lloyd Ferguson insisted, "I can't believe any of us would sell our souls for $750," the maximum allowable donation from an individual corporation.
Does Ferguson have a point? Is the hoopla over corporate donations merely about "perception" or is there a real undercurrent that affects how democracy works at the municipal level?
The Hamilton Spectator punted on this question in a recent editorial, arguing that they "don't believe that council overall or certain members are unduly influenced by campaign contributors" but supporting the ban on "that pesky matter of perception."
York University Professor Robert MacDermid is ground zero for the question of whether Ontario municipalities should allow corporate donations to candidates for Council in municipal elections. He's been researching the role of corporate - and specifically developer - donations in election results for years and has published several papers.
In a major study [PDF link] of the 2006 municipal election filings across Ontario, MarDermid found that among the 905 municipal politicians who get most of their campaign donations from corporations, most of their money comes from the development industry.
He discovered that the GTA is an interesting case study in contrasts - between the downtown Toronto Councillors, who for several years have refused corporate donations, and suburban councillors in places like Pickering and Vaughan, who get up to two-thirds of their money from developers and other corporate donors.
Overall, winning contestants in 905 area wards received 54 percent of their funding from property developers; whereas losing candidates got only 35 percent of their money from developers.
Interestingly, donations from unions represent a tiny fraction of the total received - even in places like downtown Toronto and Oshawa, in which union donations accounted for two percent and four percent, of each respective total.
The major political obstacle to progressive, sustainable development in Hamilton is that special network of single-use residential and big box commercial property developers who have effectively held the reins of urban development for the past several decades - what I have called Hamilton's Bidness community.
The Hamilton Halton Home Builders Association (HHHBA) and its members - including the Spectator, a "Platinum Member" - are responsible for most of the corporate donations to candidates and also were responsible for most of the illegal over-contributions that arguably tipped the 2003 election to a sprawl-friendly council that approved the construction of the Red Hill Valley Parkway and opened up a billion-dollar sprawl development at Summit Park.
Setting aside all the environmental, social and psychological costs associated with sprawl, I want to highlight two very specific ways that sprawl development harms cities like Hamilton:
As a 2006 report for the City of Hamilton demonstrated, sprawl development costs more to service than the city collects from developers and residents, so every new house actually raises the city's fiscal deficit. (A recent decision by council not to follow staff advice and raise development fees was strongly influenced by the heavy lobbying of the development industry.)
The result is public infrastructure with very low productivity compared to its costs. This inefficiency increases the cost of servicing for both residents and businesses, while the opportunity cost of that unproductive infrastructure crowds out potential public investments that might actually generate value.
Sprawl measurably reduces the city's rate of innovation by reducing opportunities for people to cross paths and share ideas. A lower rate of innovation means less potential for the city to launch and grow wealth-generating businesses.
The only recourse is to try and lure foreign businesses to move, which it can do only through a race-to-the-bottom competition on lower prices (which further exacerbates the city's finances) and/or looser regulation (which reduces the quality of life for residents).
Councillor Ferguson misses the point when he suggests that councillors won't be swayed by the money they receive. Ferguson doesn't support the sprawl industry because he gets donations - it's the other way around. He gets donations (and can run a successful campaign) because he supports the sprawl industry.
Allowing corporations to make political donations increases the resources and electability of politicians who already represent the developers' interests and, as MacDermid demonstrated through his study of election data, increases their likelihood of getting elected.
The result, as MacDermid demonstrated through election data and Parish argued from an insider's perspective, is that the interests of the council that ends up getting elected end up disproportionately reflecting the interests of developers.
Of course, it doesn't always work that way. Eisenberger ended up narrowly winning the Mayoral race in Hamilton, even though he spent only $60,000 compared to the $236,000 spent by incumbent Mayor Larry Di Ianni. Similarly, McHattie handily re-won Ward 1 despite a concerted top-down campaign by Tony Greco, fueled by corporate donations from property developers.
However, at least in the Mayoral race, the results may have been due to a backlash against a too-well-funded campaign by an incumbent already tainted by an historic conviction for campaign finance violations. (It's worth pointing out that Di Ianni hismelf disputes the claim that his conviction was a factor in his defeat).
Outliers aside, developers generally get the candidates they want elected into office. When it comes time to form policy, they generally get the decisions they want as well, and to hell with the broader public interest.