No free rent now for NDP at office building

Change comes amidst charges headquarters sale has to do with fundraising reforms

Ontario’s New Democrats will be paying full commercial rates for office space at the downtown building now being sold by the party’s unionbacked holding company.

But the rent will be paid to the company, Ontario Cornerstone Leadership Corporation, whose shareholders are the NDP and eight unions or their locals.

The rent change comes after terms of the sale by Cornerstone were revised last Friday, altering plans to give the NDP free rent at 101 Richmond St. E for the rest of the year, and a reduced rate until July 2017.

“Once a sale is finalized the party will be charged fair market rent by Cornerstone,” Karla Webber-Gallagher, the NDP’s provincial secre- tary, said in an email Monday. And Cornerstone will keep the rent money, she said.

The rental arrangement follows a Star report that a previously secret Cornerstone shareholders’ agreement from Sept. 9, 2009 showed the company has a complex corporate entity where the NDP controls all of the Class A common shares. Typically, these shares carry more powers. Eight unions hold Class B shares. The agreement also showed that each union has a seat on the Cornerstone board, the NDP has one seat.

The corporate structure is not illegal. But it appears to challenge past assertions by the NDP that the party had an arm’s-length relationship with Cornerstone. In 2014, Cornerstone guaranteed a $6-million loan for the NDP, which currently has a debt of around $5 million.

As the Star revealed Saturday, Cornerstone is selling the building on Richmond St. to Streetwise Capital Partners Inc. for $3.5 million in a deal set to close June 24. That’s $400,000 more than Cornerstone paid nine years ago.

NDP Leader Andrea Horwath said Monday she’s not in the loop of dayto-day operations at Cornerstone, established more than a decade ago to help the New Democrats raise money and secure loans for election campaigns.

The sale of the building to Streetwise comes as Premier Kathleen Wynne’s Liberals are scrambling to reform Ontario’s lax political fundraising laws, possibly imposing bans on corporate and union donations.

It is possible a ban on contributions from unions would lead to an unravelling of the Cornerstone arrangement. That would put extra financial pressure on the NDP.

But Horwath said the office is “absolutely not” being sold because of the reforms, which Wynne will introduce later this month. “Nobody even knows what the new legislation is,” the NDP chief said, noting the party has been looking for new premises for some time.

“There have been problems with that building for many, many years. There are problems with accessibility, there are problems with the roof.”

But Finance Minister Charles Sousa suggested the timing of the real estate deal is curious.

“It’s coincidental — or not — that suddenly they’re trying to unwind the shell corporation,” said Sousa, whose own party announced reforms only after the Star disclosed that ministers had annual fundraising targets of up to $500,000 each.

He accused Horwath of trying to “delay the process” of introducing the fundraising reforms.

The NDP leader said the Liberals are using their majority to bring in the reforms without enough input from her, Progressive Conservative Leader Patrick Brown and Green Party Leader Mike Schreiner.

Horwath, who endured Liberal heckling in question period about the Cornerstone controversy, maintained she is “not involved” with the building sale.