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Federal political parties reveal how much self-interest motivates them in fight over their public funding -- A democratic compromise is to cut per-vote funding in half


Set out below is an op-ed by Democracy Watch Coordinator Duff Conacher which was published in slightly different, edited form in the November 30, 2008 issue of the Montreal Gazette

On Thursday, Conservative Finance Minister Jim Flaherty spun his government's proposal to remove the $1.95 per vote annual public funding for political parties as a belt-tightening measure needed to match the belt-tightening forced on many Canadians by the current recession.

Yes, the Conservatives will lose money by cutting the per-vote funding to zero, but their proposal (which they did not mention during the recent election) is clearly designed to undermine the opposition parties that all receive a much higher percentage of their annual funding from the subsidy.

The Prime Minister also falsely claimed that the Canadian public "overwhelmingly" wants this party funding cut (when, in fact, recent polls show no more than 60 percent want the cut, while 40 percent support the funding, which is hardly overwhelming given that if one person in 10 changed their mind to support the funding, Canadians would be split 50-50 on the issue).

It would likely not be difficult to convince that one person to support the funding either, given that polls indicate many Canadians believe the false claim that the funding takes their tax dollars and gives it to parties they didn't vote for (in fact, every Canadian's tax payments support only the party for which they voted).

Opposition party representatives counterspun by claiming it was "outrageous" and a "denial of democracy" - making it clear they feel they are entitled to every cent of the subsidy.

True, the party funding is democratic because it encourages people to vote, and because it is based on votes received and therefore somewhat balances out the fact that Canada's vote- counting system rips off some of the opposition parties by not giving them the number of MPs they deserve. However, that doesn't mean the parties deserve the full $1.95 per-vote annual subsidy.

The subsidy was proposed in 2003 by Liberal Prime Minister Jean Chrétien at $1.50 per vote. But senior Liberals calculated that at this level their party would not receive a dollar-for-dollar replacement of the corporate donations they were going to lose under Chrétien's proposed ban on donations from any type of organization, and limits on individual donations.

So, to appease these Liberals, Chrétien approved increasing the $1.50 to $1.75 per vote (with annual inflation increases, which is why the subsidy is now $1.95 per vote).

In addition, the Canada Elections Act was changed to increase other subsidies so that, since January 2004, parties have been reimbursed 50 per cent of their election expenses if the party receives two per cent or more of the national vote (or five per cent or more of the vote in any riding); election candidates get back 60 per cent of their expenses if they receive 10 per cent or more of their riding vote, and; donors receive a 33-per-cent to 75- per-cent tax rebate depending on their size of their donation.

As a result, in addition to about $15 million in annual tax rebates for political donors, the per-vote subsidy gives federal parties each a portion of about $27 million each year and, using the 2004 election as an example, election expense subsidies gave parties back $30.5 million of the $50.4 million they spent, and candidates $24.8 million of the $43.2 million they spent.

Federal politicians should recognize that there are many other citizen advocacy organizations in Canada with equally broad-based support that have never received any public subsidies. Even donors to charities receive a much, much smaller tax rebate (17 per cent) than do party donors.

In 2003, Democracy Watch and the 50-group Money in Politics Coalition it co-ordinated proposed that the subsidy be cut to 75 cents per vote, based on a calculation of how much each party had raised annually in recent years, and how much funding each party actually needed to cover its basic operations (taking into account inflation, it would now be about 90 cents per vote).

The public funding system should not give parties more than a base amount so that, in order to prosper financially, they will still be required to reach out and talk to voters, involve them, and listen to and address their concerns (to attract their donations and votes).

The current per-vote subsidy level, established solely in the self-interest of the Liberals, is too high and allows parties to remain financially healthy without involving voters.

All party leaders have to do is bait voters with false promises during an election to attract their votes, and then even if they break all their promises their party continues to receive the same high per-vote funding annually until the next election.

For example, the Bloc Québécois raises about $900,000 annually from mainly individual donors. Since 2004, the party has received an additional $3 million each year from the per-vote subsidy (in other words, about 77 per cent of its funding). Yes, that's right, by making the changes he did, Chrétien provided more support to the separatist Bloc than anyone else ever has.

The other parties receive about 33 per cent (Tories) to about 50 per cent (NDP and Greens) to about 60 per cent (Liberals) of their annual funding from the subsidy.

So send a reality-check (cheque?) letter to your MP and the party leaders, and tell them to get real and reach a compromise in the public interest, and in the interest of democracy, by cutting the annual subsidy from $1.95 down to 90 cents per vote.

And suggest to them that if, instead of practising misleading spin politics, they acted more honestly, ethically, openly, representatively and efficiently, likely they will win more public funding by winning more votes (including from the more than 40 per cent of voters who didn't vote in the last election).


For more details, go to Democracy Watch's Money in Politics Campaign page