PM TO BAN DONATIONS BY UNIONS, COMPANIES

Political Parties Would Be Funded Through Government Subsidies

OTTAWA -- Prime Minister Jean Chretien will bring forward legislation to
the House of Commons this winter that bans all corporate and union
donations to federal political parties -- a move that could cost taxpayers
more than $30-million a year -- despite fierce opposition from within his
own caucus and party, a government official says.

And the Prime Minister is prepared to lead his rebellious party into an
election if Liberal backbenchers join opposition parties to defeat the
legislation.

If the government is defeated on a major bill then there would have to be
an election, and the party has only one leader, the official, speaking on
background, told The Globe and Mail.

Mr. Chretien is determined to proceed with electoral changes, which would
drastically reshape the way parties raise money before an election, as part
of a legislative program that would capitalize on his freedom to act in
what he feels is the public interest without being personally concerned
with the political consequences.

The government will also proceed with legislation to decriminalize the
possession of marijuana, will tie health-care financing to specific
spending priorities, and may well proceed with legislation that would
permit same-sex marriages.

But the most contentious piece of legislation may be the electoral overhaul
bill. Not only will it prohibit corporations or unions from making direct
donations to political parties, but it will also make it illegal for
individuals to make personal donations and be reimbursed by a corporation
or union. And individual donations will be limited to a fixed amount.

To substitute for lost revenues, parties will be directly financed by
taxpayers through government subsidies. Under one proposal, each party will
receive a predetermined sum for each vote it earned in the previous
election. Individual candidates for Parliament will similarly be prohibited
from receiving corporate or union money.

The government is not prepared to reveal what the ceiling would be on
individual limits, nor how much the total cost to the taxpayer will be. A
parliamentary committee will debate the limits and formulas. The goal,
however, will be to ensure that all parties receive public and individual
funds equal to the corporate and individual financing they receive now.

In 2001, according to Elections Canada, all political parties combined
received $31.6-million in individual and corporate donations.

The new hard line seems to contradict Mr. Chretien's assertion, made during
year-end interviews earlier this week, that he sees his principal task as
ensuring that his successor is well positioned to win the next federal
election.

He is acting as a liberated leader who is not afraid to take on
controversial issues and is prepared to act aggressively on what he thinks
is the best public policy without concern for having to compete for future
electoral advantage, the source said.

The government is also determined to introduce legislation shortly after
the Commons returns in late January that will decriminalize the possession
of small amounts of marijuana, and that will allow small quantities to be
grown for personal use.

The government is also actively considering legislation that would permit
same-sex marriages, a subject previously thought to have been moved to the
back burner. Mr. Chretien has indicated he wants a full debate on the issue
next year, the source reported, before making a decision whether to act.

Finally, in what promises to be an event-filled political winter and
spring, the federal government will seek to ensure that any additional
federal funds for health care be tied to particular services, in agreement
with the provinces.

All of these initiatives are certain to be deeply controversial. But the
one with the largest potential political fallout is electoral legislation,
which Mr. Chretien promised in late November would be sent to Parliament in
early December.

Word that corporate and union donations would be banned ignited a storm of
opposition from within the government's own ranks. However, the government
source said the Prime Minister has decided to proceed.