Subsidizing Political Parties

 In November 2008 and barely a month after winning the elections, Prime Minister Stephen Harper came within a hair of loosing the reigns of power because he and his government introduced an economic statement which sought to abolish the quarterly state subsidy of political parties. 

 Opposition parties were busy saying that they were against other measures in the economic statement such as cuts to aboriginal programs and women’s groups.   However, everyone knew that the Conservatives were cutting their opponents' financial lifeline, and that opposition parties would be willing to defeat the government on the quarterly subsidy issue.  Almost miraculously, the Prime Minister and his government survived when the Governor General agreed to prorogue Parliament without first having voted on the non-confidence motion which was before the House.  Canadians thought that they had heard the last of the political party subsidy debate.

 The Conservatives are once again contemplating dragging this issue at the forefront of political punditry.  Tory MP and Parliamentary Secretary to the Prime Minister Pierre Polievre once again mused that his party would make this issue a campaign theme in the next general election.  Canadians are asking themselves why are the Conservatives so agitated about this measure and why the Prime Minister is willing to risk it all again in the new year for a measure which less than significant.

 Prior to 2004, political parties were permitted to seek and receive political contributions from corporations, unions and from individual donors.  In late 2003, the Liberal government tabled legislation which forbade union and corporate contributions.  I was the sponsoring Minister when Parliament adopted the bill.  As part of the legislation, the loss of revenue for political parties as a result of the new restrictions on corporate and union contributions would be replaced with a annual state subsidy of $1.70 per voter which each political party received in the previous general election.  The amount would be paid in quarterly installments beginning in 2004. The two other existing taxpayer subsidies already operating for the previous thirty years would continue.

        In 1974, the Trudeau government reformed the political contribution system in Canada by establishing public disclosure of political financing coupled with two different subsidies to political parties.  The first, the Political Contributions Tax Credit (PCTC) offers a donor taxpayer a tax credit of up to 75% of the amount given to a political party.  In other words, a taxpaying individual contributing $100.00 to his/her favourite political party, receives $75.00 back from the government on their next income tax filing.  The net cost for the donor is only $25.00.  The second component in the 1974 election finances reform package was a direct subsidy by way of a reimbursement of 22% of a party’ eligible election expenses, and a 50% reimbursement for eligible candidate expenses.  These percentages have since been revised.

 In October 2010, Professors Harold Jansen of the University of Calgary, and Lisa Young of the University of Lethbridge analyzed the financial benefits that each federal political party was receiving from the various taxpayer subsidy schemes based on the 2008 calendar year.  They found that the quarterly installment is not the largest taxpayer subsidy to political parties but the tax credit (PCTC) holds that distinction, costing taxpayers some $34million, of which a whopping $21 million or two thirds benefitted Conservative Party supporters.  In second place, the Election Expenses Reimbursement cost the public treasury $29 million of which $10 million was given directly to the Conservative Party and its candidates.  In third place for the calendar year 2008, is the Quarterly Allowance which the Conservatives tried to abolish cost $28 million. The Conservative party received $10 million under this program.

       From these numbers, it is easy to conclude that the Conservative Party receives more largesse from the taxpayers than any other party.  It is also clear, that the present government was, and in all likelihood is seeking to abolish only one of the three taxpayer funded subsidy scheme namely the quarterly subsidy which benefits their opponents most and themselves the least.  Furthermore, if the quarterly subsidy were to be abolished, under the remaining two subsidy schemes, the Conservatives would proportionately be the largest winner, at the expense of all others.

 Canadians need to ask themselves if Stephen Harper is against taxpayer subsidies to political parties, or rather, is he against those subsidies which proportionately benefit his opponents.

 The answer seems obvious.