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Study finds Canada’s political parties need subsidy to survive

by macleans.ca on Friday, January 22, 2010 11:41am - 52 Comments

According to a study out of the University of Calgary’s School of Public Policy, Canada’s political parties have become more dependent on public subsidies than they ever were on the corporate and union donations the subsidy were meant to replace. In fact, the parties collect about 50 per cent more money from the government than they did before the change. Given the political hubbub that sprang from the Conservatives’ bid to cancel the subsidies last winter, it won’t go unnoticed that the new study’s authors are Tom Flanagan, a former Conservative campaign chair and one-time adviser to Stephen Harper, and his PhD student, David Coletto. Flanagan’s conclusion, that “this may not be the time to try and replace the system,” marks a significant break from the views espoused by the Conservatives, who have vowed to cancel the subsidies in the future. While Flanagan believes modifications to the $1.95 per vote subsidy—like reducing it, for instance—should be considered, he says changes should have the support of the opposition parties. “I think it’s bad policy to do any of these changes unilaterally. This is where the Liberals got us on the wrong track; the Liberals pushed through their changes.”

National Post

Tags: Canada

http://intensedebate.com/people/psiclone psiclone

maybe we will get lucky and Stevie boy will poison pill the throne speech by getting rid of the waste of money. Good grief .. I don't get it – if a political party can not support itself collectively through it's membership and internal fundraising using existing rules and regulations it has has no right to claim that it represents those very members. Look what happens when we subsidize parties as an example look at a nice little money maker the Green party – no seats no representation but a nice little chunk of change for a selected few top members – a much better approach would be say a tax credit as an example when you VOTE say would work very well get a 100 dollar write off with receipt that shows you voted! – the idea that us taxpayers should pay poltical parties that we did NOT vote for is absurd on the face and quite frankly defies logic EXCEPT for thoes parties who couldn't stand on their own two feet OR have been feeding at the public and corporate trough for so long the have lost contact with their own base.

http://intensedebate.com/people/robert_mccl6309 Robert McClelland

the idea that us taxpayers should pay poltical parties that we did NOT vote for

You don't. You pay for the party you did vote for.

http://intensedebate.com/people/psiclone psiclone

are you kidding – look 1.95 per vote is what the partys get = that 1.95 is payed by all of us taxpayers whether we voted for them or not!

http://intensedebate.com/people/Thwim Thwim

Think REAAAAALLY hard.. I know math is hard for Harper supporters, but.. $1.95/vote to the Liberal Party * 0 votes to the Liberal Party you provided =….

C'mon. Take a guess.

Andrew (not Potter or Coyne)

There are three subsidies given by the feds to parties:

-Reimbursement of campaign expenses
-Tax credit for donations to political parties (the government in fact pays most of the donation)
-$1.95 per vote cast for that party in the last election

Personally, I find #2 more reprehensible than either #1 or #3. Why should we all subsidize donations of a select few to their preferred party? The $1.95 / vote subsidy is at least proportional to the contributions of citizens to democracy, and not tens of millions subsidizing the donations of the few thousand. The $1.95 also encourages parties to campaign hard in every riding, and not just the few dozen where the outcome is uncertain. And that campaigning means they need to consider the interests of those people even outside of elections. For instance, the 25% of Albertans who vote Liberal will have a place in the mind of the party despite the fact that no Liberal MPs were elected there.

kcm

That last point's a good one…i have been wavering on this issue, considering some of the merits of non public funding…but that is a very good point indeed.

http://intensedebate.com/people/SamDavies SamDavies

Agreed – very valid angle that I had never considered.

http://intensedebate.com/people/PhilCP PhilCP

Every time I read about the dastardly $1.95 per vote subsidy I'm forced to give a silent tip of the hat to the CPC and their backroom spinners – it is truly awe inspiring to see how they have managed to convince anyone that the $1.95 subsidy is worse than the tax credit for donations.

kcm

Boy you got that right. I wonder if it has something to do with the fact that liberals [ lots of wealthy libs] also benefit disproportionately? There are times when i wonder if supporting the libs for the things i do like are worth the realization that they rarely seem to take a stance against something that hurts them, but is nonetheless the right thing to do.

http://intensedebate.com/people/PhilCP PhilCP

What is the purpose of the $100 tax credit that you are proposing?

http://intensedebate.com/people/jolyon jolyon

Political parties don't have some inherent right to exist. If a party's supporters can't be bothered to keep it alive then is should disappear just like any other company. Cons use to understand this but have somehow 'forgotten' all this since they got their hands on our money. Now they are just as bad as Liberals.

http://intensedebate.com/people/robert_mccl6309 Robert McClelland

If a party's supporters can't be bothered to keep it alive then is should disappear just like any other company.

So the only parties that should exist are the ones that cater to people who can afford to donate to them?

Atomic Walrus

That's a fair assessment. If you can't convince 5% of the people who voted for you to kick in $40 per year to support you (equivalent to $1.95 for every vote), then your party really isn't doing much to inspire people. The current subsidy makes it too easy for parties to cater to a small base in perpetuity. The result is a fragmentation of the vote that leads to minority governments.
Atomic Walrus

That's a fair assessment. If you can't convince 5% of the people who voted for you to kick in $40 per year to support you (equivalent to $1.95 for every vote), then your party really isn't doing much to inspire people. The current subsidy makes it too easy for parties to cater to a small base in perpetuity. The result is a fragmentation of the vote that leads to minority governments.

Andrew (not Potter or Coyne)

Shorter joylon: Canadians should have to buy their democracy. Too poor? Too bad.

http://intensedebate.com/people/s_c_f s_c_f

What the heck are you talking about? Democracy has existed for centuries, this ridiculous subsidy for just a few years. You don't need a billion dollars to win an election. Poor people can contribute too, just because you have less money doesn't mean you are a non-entity.
If a party can succeed only getting the support of poor people, who form just a small fraction of the population, then obviously that party has no hope of winning an election or even a seat regardless of hoe large the subsidies are.
will

It's probably worth poising out that the current subsidy is $1.95. Seems a bit trite to suggest that only the Rockefellers and Rothschilds of this world would be able to contribute the equivalent of a large coffee to their political party. I mean, come on…

kcm

That's not really the pnt is it, unless you advocate that a couple of bucks be the maximun contribution. It's what the race to bring in maximum donations might do o our poltiy that concerns me.

http://intensedebate.com/people/jolyon jolyon

"Canada’s political parties have become more dependent on public subsidies than they ever were on the corporate and union donations the subsidy were meant to replace."

What do you think is happening now? In your feverish mind, who is too poor to donate $5 or $10 to party of their choice if they so desire. What kind of democracy are you thinking of where the parties have to be kept alive regardless of whether people support it. Doesn't sound like any democracy to me, sounds totalitarian.

If Dippers can't be bothered to support their own party, why should everyone else be forced to. You can vote for the marxist parties, the ones that exist with no support from government, if dippers disappear.

http://intensedebate.com/people/Nich Nich

Are NDP voters taxpayers?

If so, their tax dollars are being allocated to the party of their choice.

If you don't want to support the NDP, don't vote for the NDP.
kcm

Can you name some credible democracies that only have citizen funded political parties – no public support?

'If Dippers can't be bothered to support their own party, why should everyone else be forced to. You can vote for the marxist parties, the ones that exist with no support from government, if dippers disappear"

First off dippers do support their own party. No one is forced to support a party the don't like financially…well except through tax credits…er which subsidize those who can afford to contribute. You know the one the Tories [ and probably the libs] don't want touched.
Nice smear on dippers as Marxists anyway – Yeesh!
http://intensedebate.com/people/Andrew_not_PorC Andrew_not_PorC

If you don't what to contribute to a political party in this fashion, surely you're not interested in voting for them anyway. Why would you not just vote for an independent?

kcm

Piy political parties aren't like roads, or bridges, or schools, or…something important.
http://intensedebate.com/people/Thwim Thwim

And yet this is what leads to extremist and fringe parties far more often. It is typically people who are angry, upset, or fearful that will pay to see if they can make the system change.

You're advocating for a system that works only so long as the people are kept angry, fearful, or upset.

That's rather the opposite of what I want politics and politicians to be about.

kcm

Good for Prof Flanagan for expressing a dissenting opinion from the party line…wat's up with that lately? But again, what's with the only cut the per vote sub – it's not even the most costly one?

“I think it’s bad policy to do any of these changes unilaterally. This is where the Liberals got us on the wrong track; the Liberals pushed through their changes.”

Oh really! And the other parties didn't want to see the changes Chretien brought in..to the detriment of the liberal party? Granted the Tories [ or was it reform at the time?] wanted a change to donations only…but that clearly was to their advantage at the time – Chretien wold have been nuts to have acceded to that. However, he makes a good point. These things should be for parliament to decide. Pity Harper didn't think so in 08, as i'm sure he did back when the changes occurred. But then Mr H is a very "flexible" politician – the ball being in his court now.

http://intensedebate.com/people/YSP YSP

I suspect Chretien's limitations to corporate donations hurt the Liberals more than other parties, since they were primary beneficiaries of corproate donations. Western conservatives & the NDP traditionally had a higher percentage of their money from small, individual donors.

http://intensedebate.com/people/s_c_f s_c_f

The parties have had enough warning, it's been over a year since the subsidy was nearly canned. If they can't replace the money, then so be it. Can the subsidy. Now.

kcm

Can all the subs, right?

http://intensedebate.com/people/s_c_f s_c_f

Yes, all of them.
http://intensedebate.com/people/s_c_f s_c_f

Why would that be wrong?

http://intensedebate.com/people/Thwim Thwim

My apologies. Given your support of donations above, I mistakenly assumed you'd be in favor of tax subsidies for said donations.

As you aren't, my snark was entirely undeserved, so again, my apolgies.

http://intensedebate.com/people/s_c_f s_c_f

OK, no problem. I'm not in favour of tax breaks for political donations either (I used to be, until I really thought about it), because in reality a tax break is just another subsidy as well.

mdh

I am with most of the poster's here -

I imagine that it would save the public purse much more $$ with the 75% subsidy to donation than what we do the 1.95 subsidy to parties.

Does it really make send that the governement places a higher value on donation that is more often than not used to launch a smear campaign against another person, rather than a donaton to help in Haiti, or to help Heart and Stroke or Cancer research?

Talk about some messed prorities……
Brian

In my portfolio, Flanagan's stock is rapidly rising in value.

http://intensedebate.com/people/Thwim Thwim

Yeah, well.. sub-pennies tend to move quickly when they move at all.

http://intensedebate.com/people/Andrew_not_PorC Andrew_not_PorC

Credit where it's due: Flanagan, while part of the cult of political games and tactics in Ottawa, seems to have been making a concerted effort lately of distancing himself from all that.

http://intensedebate.com/people/PhilCP PhilCP

Agreed about credit where credit is due…just a few hours ago I happened to catch a radio interview about half way through; I knew the voice was familiar, and often times I can put the voice together with a few phrases to identify the speaker. But today Flanagan's message was unusually balanced / nuanced, and I had to wait until he was identified at the end of the interview.

If Harper is going to appoint new senators perhaps Flanagan wouldn't be half bad.

David B.

Canadians for the most part throw there leaders out rather than vote them in so why do they need funding anyway. No more signs, no more debate ( Sad anyway because of demanding rules) town hall are filled with plants ….. Hello facebook has just proved people will unite and gather in heartbeat and have impact . Also blogs and daily writing on the Internet have an impact . We do need strong professional journalisum perhaps more to keep the base pads clear and concise.
http://intensedebate.com/people/Geiseric Geiseric

nickle dime crap

Harper blew more shutting down parliament than will ever be doled out this session.

As if it has nothing do with advantage, if they want to play in that ballpark they can start by cancelling the 10 percenters.
http://intensedebate.com/people/DuffConacher DuffConacher

To see Democracy Watch's November 2008 op-ed about the federal political finance system and how it should be changed, go to:
http://www.dwatch.ca/camp/OpEdNov3008.html

The per-vote subsidy is the most democratic part of the system, as it provides a democratically based financial boost to parties that do not receive as many seats in the House of Commons (and the MP office budgets that come along with those seats) as their proportion of the popular vote.

But the per-vote funding subsidy is too high, as it was set at a level to ensure the Liberals would receive as much money annually as they used to receive in corporate donations. It should be cut in half (while keeping the limits on donations at is), a level that would give each party a base in funding, and force them to reach out more to voters to prosper financially.

On a related topic, to see Democracy Watch's November 2009 op-ed on how loopholes that allow for secret donations continue to allow for legal corruption of politics in Canada, go to:
http://www.dwatch.ca/camp/OpEdNov0409.html

Hope this helps.

Duff Conacher, Coordinator
Democracy Watch

kcm

You don't comment on the other two political subsidies, in particular the tax credit…or is that in your link?

http://intensedebate.com/people/DuffConacher DuffConacher

To see Democracy Watch's November 2008 op-ed about the federal political finance system and how it should be changed, go to:
http://www.dwatch.ca/camp/OpEdNov3008.html

The per-vote subsidy is the most democratic part of the system, as it provides a democratically based financial boost to parties that do not receive as many seats in the House of Commons (and the MP office budgets that come along with those seats) as their proportion of the popular vote.

But the per-vote funding subsidy is too high, as it was set at a level to ensure the Liberals would receive as much money annually as they used to receive in corporate donations. It should be cut in half (while keeping the limits on donations at is), a level that would give each party a base in funding, and force them to reach out more to voters to prosper financially.

On a related topic, to see Democracy Watch's November 2009 op-ed on how loopholes that allow for secret donations continue to allow for legal corruption of politics in Canada, go to:
http://www.dwatch.ca/camp/OpEdNov0409.html

Hope this helps.

Duff Conacher, Coordinator
Democracy Watch
Rob H

Public finance is an outrage and insane in its logic. A new party is essentially at a huge disadvantage competing with existing drones, who can feast off the public purse. Not a dime to political parties of any kind. If they can't get their supporters of put up money they shouldn't force the people who don't support them to put up the balance.
http://intensedebate.com/people/Nich Nich

A per vote subsidy is one of the rare occasions when citizens directly determine where the government spends money. Since I don't support a particular party, the idea of a subsidy per vote makes sense. In an antiquated first-past-the-post system, it also gives meaning to the majority votes which otherwise have no value.

Tax dollars also go to funding donations to political parties. If the per vote subsidy is to be cut, so should tax credits for political contributions… something tells me that isn't on the agenda…
hosertohoosier

What are the macro-effects of a vote subsidy (and the 20 million dollar spending cap and the ban on corporate/union donations).

1. It creates an environment where smaller parties – like the Bloc and the Greens – can thrive politically. This is part of why we are stuck in minority government territory. In addition, it means that the NDP is on parity with the Liberals and Tories in terms of what they can spend in elections.
2. Since parties are less reliant on business/unions, they are instead reliant on the ideologically motivated grassroots. Thus they are more likely to take stances that will appease the base (rather than serve the national interest).
3. Because the parties often have more money than they could ever spend during an election campaign, we get campaign-style ads in-between elections, perpetuating the unending campaign.
4. Because the PM sets election dates, and because you can't spend more than 20 million in an election campaign, the system inherently advantages the government. The PM can run pre-writ ads, while the opposition has to scramble to do the same, assuming they don't know when the next election is.

Chretien's election finance rules (and Harper's additions to them) seriously undercut the effectiveness of our political system.
http://intensedebate.com/people/Thwim Thwim

1. I like smaller parties. Smaller parties are more likely to give a damn about what I have to say. I like minority governments too, when all parties in the minority government respect what that means. There are plenty of minority governments out there that function well, so don't put the results of Harper's actions on minority governments. Put them on Harper.
2. Because businesses and unions are so well known for serving the national interest? The "base", in case you haven't noticed, is us, the people. Maybe it's just me, but I kind of like it when parties take stances that appease the people.
http://intensedebate.com/people/YSP YSP

I believe HtoH is, as his name implies, living in the US.

I more or less agree with his point 2, to the extent that a policy that doesn't appeal to the non-core, it hurts them in the $-per-vote funding. But a small ideological fringe with loose wallets can influence the direction of a party. In the US, the term moneybomb is used to describe a short, intense fundraising campaign using mostly social networking tools to raise large amounts of money from small individual donations. It seems to benefit mostly "non-traditional" candidates.

I think point 4 will be true no matter which funding system is in place. I'm interested in seeing how the results of Citizens United v. FEC impacts future elections. I don't think the Canadian constitution would allow for a similar result.
hosertohoosier

1. I have no problem with smaller parties, but our electoral institutions are not set up to accommodate them. In the Westminster system coalitions are inherently unstable because small shifts in the polls can yield large shifts in the number of seats won. In an NDP-Liberal coalition, for instance, a 5 point swing to the NDP would strongly encourage the NDP to break off the coalition. Minority governments can work well with the right institutions, or an accident of favourable circumstances – but we lack the first, and should not rely on the second.
2. There are other ways of preventing businesses and unions from unduly affecting governments without the nasty side effects. Better transparency, for instance. The national interest is served by businesses, unions and private individuals COLLECTIVELY. Cutting one or two out of the political system harms our national discourse.
3. The subsidy is also a factor. I would have no problem killing the subsidy. Another factor is minority government – when there could be an election at any time, you have to act like you are in an election all the time.
4. I would prefer eliminating the caps altogether.

The last ad hominem was really unwarranted. We are talking about reforms mostly passed in 2003 – was Canada "too American" in 2002? Or if you mean my preference for a two-party system (I don't actually care about the number of parties, I care about having a parliament that is stable and able to govern with the long-term in mind. Neither the NDP nor say, Social Credit, challenged stability in the way that the Green Party, Reform Party or Bloc did/do), was Canada "American" from 1867-1921? I believe that the Westminster system is the greatest set of institutions in the world, bar none. However, even the best institutions may be incompatible with some policies. The Chretien finance reforms are one such instance.
http://intensedebate.com/people/Thwim Thwim

Except businesses and unions are made of private individuals, so as long as we respect those private individuals, we aren't cutting anything out at all.

I'd also like to point out that it is donations, not public subsidies, that are more likely to come from the "ideologically motivated"
http://intensedebate.com/people/Thwim Thwim

Except he's suggesting that being able to appeal to an ideologically motivated core is a bad thing. In essence, he's arguing more against donations being allowed than the public subsidy.
http://intensedebate.com/people/YSP YSP

It depends on how deranged that ideologically motivated core is.

I suspect this argument can be reduced to whether a vote is a public or private good. If the first, public funding is better; if the second, private donations should be chosen.
http://intensedebate.com/people/Thwim Thwim

I tend to come down on the side of a public good. As a vote reflects the will of the public, and as the results of the vote will affect every member of the public, not merely those who cast a particular vote, it strikes me that voting is a public good.