Local Government 101: Personal Financial Disclosures

The votes have been cast, the winners declared and, barring any ties, recounts or other dramas, each B.C. community now has its new council. So before they hold their inaugural meeting, we find ourselves at a unique time when we are entitled to get to know each successful candidate a little better.

I don't mean socially, or something as simple as attaching names to faces. Although those things are important, I'm talking about getting to know them in a more fundamental way: who owns what and owes how much to whom. While some may think this a rather dark subject, the worst does happen.

A B.C. municipal councillor was dismissed from office for bias/conflict of interest earlier this year. In his decision, the Honourable Mr. Justice Burnyeat wrote: "If electors are to continue to have confidence in the electoral process and the integrity of those who discharge public duties, then councillors such as [blank] must undertake an even-handed and independent consideration of the matters before council unaffected by a direct or indirect pecuniary interest."

If you are intrigued and wish to spend the time, the name can be found. But only the example is important, because it shows the system works. For our purposes today, we'll look at one element of the larger subject and at how simple it is for the average elector to be satisfied with "the integrity of those who discharge public duties". We'll look at financial disclosures.

As shareholders of private B.C. corporations know, the directors must make personal financial disclosures to them. This is done so shareholders know if the directors have financial dealings that may conflict with the interests of the corporation, thus negatively affect the shareholders' investments. Since local governments are corporations too, the BC Financial Disclosure Act makes similar demands of those we elect. And since we are equivalent to corporate shareholders, we are entitled to review the personal financial background of our CEO (mayor) and directors (councillors) for the same sort of reasons.

To be clear, the Act requires every person nominated for or holding local government office make detailed personal financial disclosures. These are locally held public documents that we may inspect. The documents must contain the name of every corporation or organization within the regional boundaries that pays the person as an owner, part owner, trustee, partner or employee. They must disclose the name of any corporation in which they (or a trustee on their behalf) own a share, and identify each corporation in which they, their spouse, children, siblings or parents own more than a 30 per cent voting position.

They must disclose the name of any subsidiaries of these corporations. And they must list all debts of any of these corporations if greater than $5,000 and must identify to whom the debt(s) is owed. They must identify all land they personally own or is held in trust for them (within the regional boundaries), and must identify any land they may have an agreement to acquire an interest in.

Except for the mortgage on their home and loans for household or personal living expenses, they must also identify all personal debts and the creditor to whom the debt is owed. Failure to make these disclosures (and to update them each January while in office) could result in a fine of up to $10,000. In addition, if the court finds a personal financial gain was made as a result of failure to make the disclosures, the guilty party could be fined in the amount of the personal gain and the money given to the local government against which the offence occurred. And, as happened in the case mentioned above, the court could make the guilty party pay some or all of the court costs and dismiss him from office.

By running, candidates indicate they wish to operate our "corporation" on our behalf. So, we are entitled to know if there are financial influences at play that could possibly cause them to act contrary to our best interests. As intrusive as this may all sound, it's fair because most local government revenue comes from taxes on land, and council decisions are frequently related to land values. It's as simple as that.

But be warned: the process of challenging someone in court is very technical, legalistic and expensive. It is meant for the most extreme cases. My personal approach is not to try and "catch" somebody. I just spend a few minutes each time the financial disclosures have been updated and go have a read. That way they know at least one person is looking. "An ounce of prevention?" and all that.

David and his wife Colleen live in Port McNeill. He holds a degree in Canadian Government and Politics and retired there after a lengthy public service career. He may be contacted via this newspaper.