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Why party subsidies are fundamentally democratic

The Vancouver Sun By Kathleen Cross 2 April 2011

On April 1, Stephen Harper announced that he was still hoping to end the per-vote public subsidy of political parties in Canada, a policy he has publicly disliked from its introduction.

The reason? He is quoted in the media saying that taxpayers should not financially support political parties that they don’t support with their votes. But this is an inaccurate misrepresentation of the effect of the subsidy, as well as the intent.

Here is how the subsidy works.

When you vote, that vote essentially translates into $1.75 annually for the party you voted for, as long as that party gets a minimum of 2% of the popular vote. Thus, $1.75 of your tax money goes to the party you voted for. If many people voted for that party, then the party gets a lot of money. If not as many vote for the party, then the party gets less. The idea that your tax money goes to parties you do not support is erroneous.

Indeed, contrary to the misleading spin from Stephen Harper and the Conservatives, financial support to political parties is directly related to who taxpayers support with their vote. The party you voted for gets your $1.75 of tax money just like the party Stephen Harper voted for gets his $1.75, and so on. It couldn’t be more democratic.

Mr. Harper also suggested that the subsidy is one of the reasons that we are having so many elections. But the election in 2008 was triggered by Harper himself, looking for a majority, not by opposition parties. This rewriting of history does not help political discourse in Canada.

In fact, how the per-vote subsidy came to be is a vitally important part of our political history. Here’s how it happened.

In 2003 Liberal Prime Minister Jean Chretien made changes to federal election contribution rules which stated that corporations, trade unions and other associations could not make contributions of more than $1,000 to political parties. (The amount was further reduced to zero on Stephen Harper’s watch in 2006). This was done to limit the influence of those with money over political and policy decisions, something that has been a dramatic and ongoing concern in U.S. election financing for decades.

Limiting the amounts of donations by corporations and other large groups is based on a belief that party coffers should be supported by the voters, through small individual donations, not large organized interests that they then may be beholden to if they get elected.

In return for losing funding from corporations and unions, a per-vote subsidy was introduced in order to help offset the lost revenue to parties. This created a level playing field between parties who may be more attractive to those with a lot of money and those who may be more attractive to those with less income. Other countries, such as Germany and Sweden, have similar limits and subsidies.

To be sure, some have suggested that the per-vote subsidy can have the effect of making political parties lazy at getting support. University of Windsor political scientist Heather McIvor said in the Hill Times in January that a guaranteed income such as that represented by the per-vote system removes party incentives to engage with civil society. But this doesn’t make sense either. Since the subsidy is based on how many votes a party gets, parties who become less engaged with the public will end up getting fewer votes, and thus less of a subsidy next time around. If anything, the per-vote subsidy significantly increases the incentive for parties, including small parties, to keep connected with their membership and attract new members.

Indeed, the election financing provisions in Canadian elections are some of the most democratic in the world. We should be proud, and keep them that way.

Kathleen Cross teaches about democratic communications in the School of Communication at Simon Fraser University