Political parties need to raise their own money

The Conservatives are ready to re-visit the issue of subsidies for political parties, a welcome assertion of the importance of individuals in the political syst

From Monday’s Globe and Mail Published on Sunday, Jun. 20, 2010 10:00PM EDT Last updated on Monday, Jun. 21, 2010 12:28PM EDT


The Conservatives are ready to re-visit the issue of subsidies for political parties, a welcome assertion of the importance of individuals in the political system, and a necessary move given the subsidy’s failure to make politics cleaner or more inclusive.

The subsidy gives political parties that got at least 2 per cent of the vote in the last general election $1.95 per year for every vote they received. Dimitri Soudas, Stephen Harper’s director of communications, told La Presse recently that the elimination of the subsidy would be “written in black and white” in the Conserative Party’s next electoral platform.

The foul political smell around the subsidy’s role in the 2008 constitutional crisis lingers. And the Conservatives would undeniably benefit in the short term. After the sensible ban on union and corporate donations, the Liberals and Bloc Québécois became dependent on the subsidy. The Green Party, despite its lack of MPs, was fuelled by it.

But it is not the amount of money ($27-million distributed in 2009) nor its allocation that is the issue. Rather, it should be re-evaluated because it has not delivered on its promise to improve democracy. Voters have not been convinced that their votes count more – the general trend of declining electoral turnout has not reversed in the three elections since the subsidy was introduced.

Nor has it, when viewed in isolation from the ban on corporate and union donations, made politics evidently cleaner or less corrupt. The “In and Out” scandal involving questionable internal Conservative Party transfers happened with the subsidy in place. And a forthcoming paper by David Coletto and two co-authors in the Canadian Journal of Political Science points out that the subsidy may be related to more centralization of the parties at the national level.

But parties still need money to run campaigns, and the subsidy represents almost half of the total money raised by all the parties in 2008. Other policies will have to change if the subsidy is to disappear.

The $1,100 annual cap on donations to a party is one of the lowest in the Western world, and should, given the union and corporate ban, be increased – Australia, Germany and the UK have no limits at all; American donors can give $2,400 (U.S.) and in France the limit is €4,600.

To encourage more donations, a U.S.-style system that allows people to donate part of their refund directly to parties when filing their annual tax returns could also be instituted. The 75 per cent deduction provided for donations up to $400 could be extended to larger donations. Additional tax incentives could be made available to younger donors.

Ideally, political parties are well-funded while deriving support from a broad base of partisans and democratically-minded individuals. Their very act of donating helps enhance democracy. Laws and public financing systems should support these private decisions. The vote subsidy should be replaced.