[Democracy Watch Logo] [Op-ed]

Changes needed to make public funding of politics more democratic

Set out below is an op-ed by Democracy Watch Coordinator Duff Conacher which was published in January 2011 on TheMarkNews.com, and in slightly different, edited form in the January 31, 2011 issue of the Hill Times

All the federal political parties, and many commentators, are ignoring the fundamental democratic principle of one-person, one-vote in their fight over political financing.  Changes are needed to uphold this principle and ensure that no one receives unjustifiable funding.

Changes to the Canada Elections Act mean that, since January 2004, the public subsidizes federal political parties and candidates as follows: parties are reimbursed 50% of their election expenses if the party receives 2% or more of the national vote (or 5% or more of the vote in any riding); election candidates get back 60% of their expenses if they receive 10% or more of their riding vote; individual donors receive a 50% to 75% tax rebate depending on their size of their donation (which is limited to $2,200 annually to each party and its riding associations), and; each party receives an annual subsidy (which is adjusted for inflation) per vote it received in the most recent election.

As a result, using the 2008 election as an example, election expense subsidies gave parties back about $29 million of the $50 million they spent, and candidates about $26 million of the $43.2 million they spent. 

In addition, individual donors receive about $20 million in annual tax rebates, and the per-vote subsidy gives federal parties each a portion of about $27 million each year (from 33% (Conservatives) up to 77% (Bloc Québecois) of their annual revenue).

Instead of fighting over their share of this large money pie, any federal party that wants to broaden its voter support should make proposals to democratize the political finance system.

First, the annual per-vote subsidy should be cut in half to $1.00 for parties that elect more MPs than they should elect given the percentage of votes they receive.  Since each MP is given about $285,000 annually in public funding for their office and operations, the parties that elect more MPs than they deserve receive a huge subsidy and so don't deserve as high a per-vote subsidy.  The parties that have appointed senators receive an even greater public subsidy of about $275,000 annually for each senator's salary, and office and operations expenses.

The cut to the subsidy is justified because it was set a too-high a level in 2003 by then-Liberal Prime Minister Jean Chrétien to ensure his party would receive a dollar-for-dollar replacement of the corporate donations it was going to lose due to the new ban on donations from any type of organization, and new limits on individual donations.

For parties that elect a lower percentage of MPs than the percentage of votes they receive, the subsidy should be cut by only 25%.  However, for parties that only operate in one region such as the Bloc, the subsidy should be cut by 75% because they do not have the travelling costs that national parties face.

These changes will balance this part of the public financing system in a democratic way by giving all the parties a base amount that takes into account their popular support and other relevant factors.  Only receiving a base amount or per-vote funding will force the parties, in order to prosper financially, to reach out and talk to voters, involve them, and listen to and address their concerns in-between elections, instead of just baiting them with false promises at election time.

Second, the individual donation limit should be cut in half to $1,100 annually.  The current limit of $2,200 ($1,100 to each party, another $1,100 combined total to the riding associations of each party) is much higher than an average Canadian with an annual household income of $40,000 can afford, and therefore allows wealthy people to use money as a means of influencing parties, which is undemocratic.

Also, loans to candidates are currently unlimited -- they must be limited to the same amounts as donations, and only individuals should be allowed to make loans.

Third, the current 75% tax deduction for the first $400 donated should be maintained because it encourages donations.  However, the overall 50% deduction for larger donations should be reduced to 33% because only wealthy people who can afford large donations benefit from it.

These changes will also force the parties to reach out to more voters and address their concerns in order to keep their funding strong, and their base of support broad and, therefore, more democratic.

Fourth, secret donations of money, property and services are currently legal to nomination race and party leadership race candidates (as long as they don't use such donations for their campaign).  All donations to parties and candidates must be required to be disclosed (including of services by volunteers to ensure that corporations and other organizations don't give employees false "time off" to help with campaigns), and the full identity of all donors must be disclosed before voting day so all voters know who is bankrolling whom.

Fifth, loans to candidates and parties must be limited in the same way donations are (as current federal Bill C-19 proposes).  Until this change is made, the donations limits are essentially meaningless, as the last Liberal Party leadership race proved.

Sixth, the party and candidate subsidies for obtaining a specific level of support from voters in an election should be left as is -- these subsidies encourage more people to run for office, and more parties, and that is healthy for democracy.

A portion of all public financing and donations should also be required to be distributed to local riding associations by party headquarters, to increase the independence of MPs.

Enforcement is also far too weak, as candidates, riding associations and parties all choose their own auditors who can easily cover-up misspending -- Elections Canada must be given the power, and required, to conduct regular audits.

Finally, the tax deduction for small donations to charities should be increased from 17% to 33%, and a new tax deduction of 17% for small donations to non-profit citizen groups should be established.  These deduction increases would recognize that these citizen groups play an important role as stakeholders in policy-making processes, and that it is, therefore, democratic to encourage support of these groups.

So send a reality-check (cheque?) letter to your MP and federal party leaders, and tell them to get real and reach a compromise in the public interest, and in the interest of democracy, by making these changes to the political finance system.

And suggest to them that if, instead of practising misleading spin politics as usual, they acted more honestly, ethically, openly, representatively and efficiently, likely they will receive more funding by convincing more people to donate, and 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