Inside Politics

UPDATED - Kerfuffle over Broadbent Institute donations just what the NDP doesn't need right now ...

by Kady O'Malley Posted: August 26, 2011 12:37 PM Last Updated: August 26, 2011 2:09 PM
SCROLL DOWN FOR IMPORTANT UPDATE

There's no way to describe this particular controversy-in-the-making as anything other than hideously unfortunate, given the timing, but as Glen McGregor reports, on the eve of the state funeral set to celebrate the life of Jack Layton, the party he leaves behind may have landed itself in a heap of Elections Canada-related trouble by soliciting donations to the Broadbent Institute in his memory.

Hours after Layton's death was announced, the party added a page inviting visitors to contribute money to the Institute -- which was announced, amid much fanfare, at the party's biennial policy convention last June. But as McGregor pointed out on Thursday, the Institute itself has yet to be incorporated, which means that technically, no such entity exists to receive the money.

Instead, the party has been acting as an interim intermediary, with all donations flowing first into its own coffers, albeit with a pledge -- not stated on the website, but issued by federal director Brad Lavigne in response to a query from McGregor -- that "every penny" will eventually be forwarded along to the intended recipient once it comes into being, although no fixed date appears to have been set for that to take place.

By funneling those donations through the party, the NDP can offer donors partial tax credits in exchange for their money, as it is considered a political donation -- far more generous tax credits, in fact, than the BI itself can ever hope to issue even if it does successfully apply for charitable status, which is by no means a sure thing. 

It may also be a potential violation of the Elections Act, which explicitly forbids parties from asking for contributions on behalf of a third party. All of which is, undoubtedly, adding considerably more stress to what was already shaping up to be a very difficult weekend for the party executive.

At press time, the NDP website was still directing visitors to the donation site, albeit with the text regarding tax credits having been removed at some point over the last two days. It's unclear whether that means they've put a temporary hold on issuing tax credits to donors, but even if that was the case, it would still seem to run contrary to the rules regarding raising money in the name of outside entities.

Oh, and as long as it is the party collecting the cash, those donations would also count against the cap for donating to the party itself, which is currently set at $1,100 per year, and all the same restrictions would apply -- no union or corporate contributions, and disclosure of the names of anyone who gives more than $200 total.

So will the party return the BI-earmarked money that it has accepted on the Institute's behalf to date? We'll find out. 

UPDATE - According to McGregor's latest update, Lavigne now says that the party will not be providing tax credits for the donations after all. 

After the funeral, an e-mail will be sent to everyone who has donated so far, explaining that they will not receive a tax receipt. Anyone who wants a refund of their donation will receive one, Lavigne said.

Lavigne said it is easy for the party's accountants to sort out which of the electronic donations should be held aside and not considered donations to the party.

The party had received about $130,000 in donations by Friday, Lavigne said.

The information about tax credits was being removed from the online form.

The party is also writing to Commissioner of Canada Elections William Corbett to explain what happened and how the party is handling it.


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