Paying Politicians to Party



March 22, 2011

By Mark Penninga (First published in Reformed Perspective magazine, Feb 2011):

A storm is brewing in Ottawa. In early 2011, Prime Minister Harper went on record to state that his party will be campaigning against the direct public financing of political parties. He was referring to the 27 million dollars that we tax payers coughed up last year that went directly to the party coffers. This is no minor matter. As Harper found out the hard way in 2008 it was enough to spark a rare political insurrection in which the opposition parties tried to form a coalition and bring down the government. So why is Harper so intent on pressing on? Is this a matter of principle, or a matter of pragmatism?

How We Pay for Parties

In 2003, then Prime Minister Jean Chretien introduced legislation that both prohibited corporate and union donations, and limited individual contributions to political parties to $5,200. Chretien forced this through Parliament because he knew this would make things difficult for then Finance Minister Paul Martin who was receiving huge corporate donations to run for the leadership of the Liberals. It would also curtail the infamous Adscam in which contracts were given to Quebec firms who then kicked money back to the party.

But if these parties weren’t allowed to get big cheques from corporations, unions, or even individuals, how would they pay for their own expenses? After all, running a series of political attack ads on TV isn’t cheap. The legislation answered this by giving $1.75 (adjusted with inflation) to the parties for every vote they earned, annually. Based on our most recent election, the Conservatives receive a handsome $10.4 million dollars every year, the separatist Bloc Quebecois receive $2.7 million, and the Green Party, which didn’t even capture a seat, received a whopping $1.8 million. These parties also became eligible to receive 50% of election expenses (60% for individual campaigns).

The impact of this new law was huge. For example, prior to this new source of money, the Green Party relied on volunteers (working out of their basements) to carry out the day-to-day work of the party. After the infusion of cash they were able to pay for a headquarters in Ottawa and hire a professional staff. Their membership exploded more than ten-fold and the financial contributions increased along with that.

But there is a hitch to all of this free money. The 2004 law required that political parties had to get at least 2 percent support from all votes cast, or a higher threshold of 5 percent of all votes in constituencies where the party had a candidate.  This is what kept the Christian Heritage Party from benefitting from this payout.

To add to all of this funding, all of the parties (CHP included) get the benefit of being able to grant huge tax receipts to donors. As much as 75% of a donation to a party or candidate is given back via these receipts. Fundraising shouldn’t be too difficult with this incentive.

The Conservative Motivation

In 2006 the Conservative government decreased the maximum individual contribution to $1,100. Since then, they have been pushing to get rid of direct public financing all-together. Why would they want less money? It only takes a glance at the table below to reveal the answer:

Contributions to Political Parties in 2009:

Conservatives: $17.77 million
Liberals: $10.12 million
NDP: $4.04 million
Green: $1.17 million
BQ: $0.83 million

If these parties were cut-off of the direct public funding, the Conservatives would be left with far more money than the others because they get many more donations. A party like the Bloc Quebcois, which in 2007 received 86% of its funding from tax payers, won’t be too thrilled about having their public subsidies cut. In contrast, the Conservatives only received 37% of their funds through this public subsidy (in 2007) and could quite easily move forward without that money. But given the Conservative’s reliance on individual donations, it is unlikely that Harper would also want to “save public funds” by reducing the massive refund that donors get when making a contribution to a party.

Harper knows that cutting direct public funding for political parties will make life very difficult for all of the other parties. It will hurt them so much that a slightly-decreased budget for the Conservative Party will be worth swallowing. For Harper, it’s an investment in the long-term success of his party. Plus it isn’t too hard to sell to a public that doesn’t mind the idea of reducing government spending, especially if it is going to be “politicians” that take the hit.

What are we to Think?

Pragmatic motivations aside, is Harper’s position in itself worthy of support? Cutting direct-public funding would probably result in a paradigm shift for Canadian politics. Parties will need to come up with policies and make decisions that would be attractive enough for someone to personally donate to the party. This means that parties will likely become more ideological. They will try stand for something. That is a big contrast from today, where the Conservatives, Liberals, and NDP really aren’t that different. They are all brokerage parties that try to rule based on current public opinion rather than a belief in what really is best for the country. Why would somebody want to pay a party to simply make decisions based on what is popular? People will pay for something they believe in. As a result, parties will probably at least appear to become more principled, both towards the right and the left side of the political spectrum.

Christians would welcome this kind of paradigm shift because it would result in a political climate where opposing beliefs can be publicly debated based on their merits. That is a contrast from the current climate in which all of the big parties want to publicly support politically correct ideas (like climate change) even if their membership base opposes them. This attempt to look politically correct is the reason why the federal Conservatives haven’t done anything about the Canadian Human Rights Commission even though over 95% of their membership voted to reign the CHRC in at their policy convention.

Another benefit of dropping direct public funding would be that the parties would become less professional. They couldn’t rely on massive public funds to hire a staff of spin doctors or keep polling firms in business. Parties would have to turn to volunteers if they want to be organized and effective. Again, the benefit would be that the party would have to stand for something if someone is going to volunteer their time for the cause. This will only help instigate an open and public debate over issues which for too long have been ignored because they are controversial or politically incorrect. Professionalism may benefit a party, but it would be difficult to show how it benefits Canadians. Not too many people would complain if these parties can’t afford more TV attack ads, or if there were fewer election signs dotting the landscape.

It is hard to think of ways in which Canada would suffer if our political parties had smaller budgets and had to work for donations. After all, they can’t make the case that our governance relies on them. Our constitution welcomes Members of Parliament who sit as independents and are elected based on their own merit. I, for one, would welcome a political climate where merit and principle were given a greater role. Harper may have self-serving motives in wanting to cut direct public funding of our political parties, but it is an idea that would do Canadian democracy well.

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