This piece can be considered a companion piece to Abolish Privately-Funded Politics to Prevent Another WE Scandal | Op-Ed. They present two-differing perspectives on how Canadians can choose to fund their political parties.
In the midst of a global pandemic, a considerable amount of attention has been given to revisiting the idea of a voter-subsidy to keep political parties afloat. Some have even gone as far as to use the WE scandal as a springboard for this conversation, hoping that giving political parties more public money will ensure a higher ethical standard will prevail.
The issues with the WE scandal is not a political fundraising issue. At the heart of the WE scandal is a question of ethics and providing single sourced government contracts with limited oversight.
The pesky thing about ethics is that it requires you to do the right thing, over and over again. Which, when in government, is often challenging in normal times, let alone when facing record levels of unemployment, a debt that will be the burden of unborn generations and an uncertain future.
In Short: In the case of a per-vote subsidy, there is no evidence that political parties act more ethically. In Ontario there is a very generous per-vote subsidy and yet there is no indication of a higher ethical standard. For instance, in the latter years of the last Liberal government in Ontario, there was no shortage of ethically questionable decisions. In response to questions raised about positional cash-for-access fundraisers held, the government was forced to change political fundraising rules.
The trend of bringing up voter-subsidies during a challenging time is not new. When the idea was first introduced by Prime Minister Jean Chrétien, amidst the sponsorship scandal that plagued his final year in office, the abundance of daily headlines forced the Prime Minister to make numerous changes to party fundraising laws. A per-vote subsidy was introduced to minimize the impact of the financial changes, which saw the ability for corporations and unions to donate to political parties limited and placed a cap on individual donations.
The next changes were introduced by Prime Minister Stephen Harper who attempted to scrap the voter-subsidy in the Fall Economic Update mere months after picking up his second minority government. This decision initiated a plan from opposition parties to overthrow the Harper government with a coalition government. These talks were eventually put to bed following the prorogation of Parliament. Despite being the party that benefited most in this case, Harper successfully scrapped the subsidy following his majority government win in 2011.
The idea of a per-vote subsidy didn’t die after Harper kicked it to the curb. In 2017, a Bloc MP introduced a private member’s bill (PMB) that sought to reduce annual individual political contribution limits while reintroducing public funding for registered political parties through quarterly allowances. Like most PMB’s, it died on the Order Papers following the end of the 42nd Parliament. The Parliamentary Budget Officer estimated that the total cost would be $45.2 million in 2018, increasing to $46.2 million in 2021. That is enough to send over 7,000 young Canadians to a 4 year university for free.
Canadian political parties are an essential service to Canadian democracy, but at their core, they are just another business. They produce a product, usually a vision for Canada, and then try to sell that product to Canadians during an election. They do not differ from the pizza place down the street that has some hot takes on whether pineapple belongs on pizza.
The only difference is that political parties provide a service that is not monetarily profitable, and it’s not meant to be. No person should go into politics wanting to make money, it’s a place of service and a chance to help make life easier for Canadians. Parliament isn’t on Bay Street for a reason.
This is why political parties are treated like charities in the sense that they offer such generous tax subsidies. The most generous of them all is the tax break a person receives for donation – 75 percent of the first $400, 50 percent up to $750, and 33.5 percent for the remainder, up to $1,625. The tax break means that a person who donates 20 dollars is only really paying 5 dollars as the rest is returned through their taxes.
- In 2019, political parties had no issues fundraising. The Conservatives led the pack by raising $30.8 followed by the Liberals raising $21 million, the NDP raising $8 million and the Green’s bringing in $6.5 million.
To balance the playing field during an election, political parties and candidates have strict spending limits. In the last federal election, the spending limit for each of the four mainstream national political parties was $29,060,308. This cap applies to the spending during the election and includes transportation, staff salaries, advertising and any other expense that might come up. This limit is a counterbalance to ensure that one party doesn’t win by just out spending their competition like they do in some other countries.
- In the last election, the riding with the highest spending limit was Kootenay-Columbia, B.C., which had a limit of $145,436.
- The lowest was the riding of Charlottetown, P.E.I., which had a spending limit of $86,542.
After an election, Elections Canada reimburse political candidates that received 10 percent or more of the votes in their riding 60 percent of their eligible election expenses.
- For example, if a candidate spent $100,000 in his or her election campaign, Elections Canada would pay $60,000 in rebates. Of which, political parties can require candidates to return a portion of their reimbursement.
- After the 2015 election, Conservative Party candidates received $16,778,265, Liberals $14,146,482, the NDP $9,469,792, the Bloc Québécois $1,406,006; and the Green Party $773,165 in rebates in total.
An Unneeded Subsidy: Between the genius tax incentives, expense reimbursement and strict spending limits, there is no actual need to add a per-vote tax subsidy to parties that are already receiving millions of dollars in public funds. Instead of taxpayers taking on the burden of supporting political parties, the money should instead be reinvested into Canada through efforts to reduce the deficit, improve critical services or even better support green space in Canada.
Understandably, political parties will be impacted by COVID-19, but so are all Canadians. Much like the rest of us, political parties should be forced to adapt to these changing times and find fresh ways to engage with voters to compel them to donate. Because spamming party members with emails and phone calls asking for donations is not going to work anymore.
Political parties will survive. The Conservative Party has a proven method of engaging with a highly motivated base, the Liberal’s have the clout of being the governing party and with a funding raising system second to none, the NDP have political veterans such Anne McGrath and a vibrant leader to drive fund-raising numbers, and the Green’s have a leadership race that is producing countless new and innovative ideas. And for the People’s Party, I think we can all agree that leaving them alone is the best idea.
The Bottom Line: A national pandemic is not an excuse to prop up political parties with more public money when businesses across Canada are struggling to keep their doors open and people employed. If this means that political parties have to rethink their fundraising strategies and how they spend money, there are worse mountains to climb.
- Abolish Privately-Funded Politics to Prevent Another WE Scandal | Op-Ed
- Trudeau & the WE Charity | Anatomy of a Scandal
- Trudeau Remains Popular Despite WE Dip