Killing vote subsidy bad for democracy

Opinion

Hey there, time traveller!
This article was published 26/05/2011 (5230 days ago), so information in it may no longer be current.

“Political parties need to take some responsibility in raising their own money. We believe Canadian political parties already have enormous tax advantages, there are credits when you donate to political parties, there are rebates when political parties do spending.”

— Prime Minister Stephen Harper

Conservative Finance Minister Jim Flaherty confirmed Wednesday that the federal government intends to move forward with plans to phase out the per-vote political party subsidy.

If Prime Minister Stephen Harper was serious about cutting the federal cash that political parties receive as a cost-saving initiative, he would also take steps to immediately end tax breaks for political donations and the reimbursement of election expenses to political parties.

But he’s not going to do that because it would hurt his own party.

The per-vote subsidy, which was introduced in 2003 by Jean Chretien’s Liberal government, guarantees about $2 per vote for parties that receive more than two per cent of all votes in a given election, or five per cent of the votes in electoral districts where they have run candidates.

The bill was introduced amid news of possible misuse of public funds in government advertising and the governing party’s fractious leadership politics. It included strict new limits on cash donations given to political parties from trade unions, corporations and individuals as a way to limit their influence on government decisions.

Most political parties at the time were still getting the bulk of their funding from these kinds of donations, and had the per-vote subsidy not been introduced, the decision to limit cash donations would have left them financially destitute.

While costly, the per-vote subsidy has better aligned political parties with Canadians who vote for them. Yet there remain other political subsidies taken from the public purse that are just as costly.

Currently, the federal government offers massive tax credits to Canadians who donate to political parties — including a 75 per cent tax credit for contributions of $400 — up to a maximum tax credit of $650.

As Globe and Mail writer Eric Grenier pointed out earlier this year, the Department of Finance states the cost of the tax credit in 2009 was an estimated $20 million.

Elections Canada states that registered parties are eligible for a 50 per cent reimbursement of their expenses for general elections if they receive at least two per cent of the valid votes nationally, or five per cent of the valid votes in electoral districts where they endorsed candidates.

In the 2008 election, this meant that the Conservatives received $9.7 million, the NDP $8.4 million, the Liberals $7.3 million, the Bloc Québécois $2.4 million and the Green Party $1.1 million — a total reimbursement of $28.9 million.

By comparison, the official federal parties were given about $27 million under the per-vote subsidy in 2009.

Parties annually receive federal cash for research and staffing as well, and our MPs regularly bill the government for work-related expenses — expenses that don’t always pass the smell test.

Conservatives have widely benefitted from the current structure of electoral subsidies, as they generally attract older — and richer — voters who have no problem cutting a donation cheque.

The same can’t be said for the Liberal Party, the NDP or the Greens — parties that are far less adept at political fundraising and often attract voters with less cash to pony up. In 2009 for example, the Conservatives took in $22 million in donations, twice that of the Liberals.

There’s no doubt that the Tories stand to gain politically from the financial quagmire that killing the per-vote subsidy will create for the other parties. But by killing the per-vote subsidy, Harper will ultimately destroy what amounted to a semblance of a level playing field in federal politics.

While that’s great for the Tories, it does our democracy no service whatsoever.