Political party subsidies: A $370-million bill

Several years back, in an interview with Gilles Duceppe, the Bloc Quebecois leader claimed Quebec and Alberta had much in common. He cited how both contribute more to federal tax coffers than their citizens and provincial governments receive back in services or federal transfers.

When I challenged Duceppe on this point, the Bloc leader claimed his party had analyses that proved Quebec was a net contributor to the rest of Canada. He said his aide would send me the numbers.

They never came. And that’s because Duceppe’s claim was a fabrication. Anyone familiar with federal transfers well knows Quebec has long been a net recipient of tax dollars from the rest of Canada.
                                                             
It’s possible that somewhere in the Bloc’s files, an analysis exists that misinforms Quebecers and tells them they are shortchanged.  Given the Bloc’s raison d’etre is to break up Canada, fiscal fibs are hardly unlikely.

But forget those inter-governmental transfers for now. Here’s another subsidy that helps keep alive the separatist party, and also acts as a “buffer” between all political parties and Canadians. It’s the three involuntary taxpayer-financed subsidy schemes for political parties. Since 2000, those subsidies have meant $370.3 million for those same federal parties.

So, if Canadians wonder why parties now advertise year-round (compared to past practice when such ads appeared only during elections), it’s because Canadians were dragged into paying for such constant electioneering through the generous subsidy system.  Parties have used the $370.3 million to staff their daily operations, fund campaigns and advertise—before, during and after elections.

Here’s how that $370.3 million breaks down. Since 2000, $90.3 million in federal tax dollars went to candidates for election-time reimbursements; $94.6 million has been reimbursed to political parties for their election expenses; and the parties have benefitted greatly from a whopping $185.4 million in “allowances” that began in 2004. (That last subsidy is the per-vote subsidy, where parties receive money from the federal purse every three months, based on votes received in the prior election; it is the only subsidy the Conservatives have again promised to eliminate.)

The big winners in this taxpayer-funded bonanza are the Liberals at $122.2 million and the Conservatives at $119.4 million. The NDP garnered $70.4 million and the Bloc Quebecois have snatched up $37.5 million. The Greens received $11.5 million; minor candidates and now-defunct parties picked up the remainder of the cash.

But the big numbers don’t tell the dependency story. For that, you must compare how much parties raised from individual donors since 2000, versus how much they receive in taxpayer subsidies. Here are the ratios courtesy of Elections Canada data: For every one dollar raised privately between 2000 and 2010, the Liberals received $1.83 in subsidies; for every buck donated to the Conservatives, 99 cents then arrived in taxpayer subsidies. The Greens and the NDP took $1.62 and $1.40 respectively from the public purse for every donated dollar.

All of those ratios pale in comparison to the Bloc Quebecois. In dollar terms, the Bloc raised just $7.6 million from individual donors since 2000. So imagine if the Bloc were forced to fight five elections (including this year’s) and finance its operations on just that amount. But, as noted, the separatist party in parliament also received $37.5 million in taxpayer-financed subsidies. That’s a ratio of $4.94 in subsidies for every donor-raised dollar—the highest subsidy ratio of all the parties.

When I first raised this issue in autumn 2008, before Finance Minister Jim Flaherty suggested scrapping the allowances (but regrettably not the other subsidies), the Bloc called me up. They argued I ignored how their party also receives additional individual donations but via their riding associations.

Even with that calculation thrown in (an extra $2.1 million for the Bloc since 2000), the Bloc is extremely reliant on tax dollars, with $3.86 in taxpayer cash for every dollar raised privately. Using the same number-crunching, the nearest ratio is still the Greens, with $1.58 in public money for every private buck.  

Some assert that taxpayer funding for political parties helps democracy. Wrong. If parties were forced to scramble for donations to survive, their platforms would be more or less attuned to what average Canadians want. (Unions and corporations cannot donate to parties, only individuals.)  All subsidies do is insulate parties and politicians from the very people they purport to represent—voters.

Worse, with the Bloc, taxpayer-funded life support keeps the party intent on Canada’s break-up financially healthy.

Political parties are necessary animals; in liberal democracies, they broker differing interests and keep the fight for political power peaceful. But such animals should find their own sustenance.