Public Values

Changes needed to make public funding of politics more democratic

One-person, one-vote principle needs to apply to party funding.

Duff Conacher of Democracy Watch: send your MP a reality-check (cheque?) Duff Conacher

In the fight over the $47 million in annual public funding given to federal political parties, the fundamental democratic principle of one-person, one-vote is being ignored. The following changes would uphold that principle, thereby making the system much more democratic.

First, the annual per-vote subsidy should be cut in half to $1 for parties with more elected MPs than they should have based on the percentage of votes they received. Since MPs are each given about $285,000 annually in public funding for their offices and operations, the parties with more elected MPs than they've earned receive a huge subsidy and so don't deserve as high a per-vote subsidy.

The cut to the subsidy is justified. The subsidy was set at too high a level in 2003 by then-Prime Minister Jean Chrétien to ensure his party would receive a dollar-for-dollar replacement of the corporate donations and personal contributions it would lose due to a new ban on donations from any type of organization and new limits on individual donations. The parties now share the annual subsidy of about $27 million.

  Forcing parties to reach out to more voters and address their concerns by decreasing public funding will help the parties to secure strong sources of funding from a broad base of supporters.

For parties with a lower percentage of elected MPs than they deserve, the subsidy should be cut by only 25 percent. For parties that only operate in one region, such as the Bloc Québécois, the subsidy should be cut by 75 percent because they do not have the travelling costs that national parties face.

These changes will balance this part of the public financing system in a democratic way by giving all the parties a base amount that takes into account their popular support and other relevant factors. Only receiving a base amount or per-vote funding will force the parties, in order to prosper financially, to reach out and talk to voters, involve them, and listen to and address their concerns in between elections, instead of just baiting them with false promises at election time.

Second, the individual donation limit should be cut in half to $1,100 annually. The current limit is $2,200 ($1,100 to parties and $1,100 to party riding associations). It is much higher than an average Canadian with an annual household income of $40,000 can afford. It therefore allows wealthy people to use money as a means of influencing parties, which is undemocratic.

Third, the current 75 percent tax deduction for the first $400 donated should be maintained because it encourages donations. The overall 50 percent deduction for larger donations, however, should be reduced to 33 percent because only wealthy people who can afford large donations benefit from it. The deductions currently provide a total of about $20 million to donors annually.

These changes will likewise force the parties to reach out to more voters and address their concerns in order to keep their funding strong and their base of support broad (and therefore more democratic).

Fourth, secret donations of money, property, and services are currently legal to nomination race and party leadership race candidates (as long as they don't use such donations for their campaign). All donations to parties and candidates and the full identity of all donors should be disclosed before voting day so all voters know who is bankrolling whom.

Fifth, loans to candidates and parties must be limited in the same way donations are (as current federal Bill C-19 proposes). Until this change is made, the donation limits are essentially meaningless, as the last Liberal Party leadership race proved.

Finally, the tax deduction for small donations to charities should be increased from 17 percent to 33 percent and a new tax deduction of 17 percent for small donations to non-profit citizen groups should be established. These tax deduction increases would recognize that these citizen groups play an important role as stakeholders in policy-making processes and that it is therefore democratic to encourage support of these groups.

So send a reality-check (cheque?) letter to your MP and federal party leaders. Tell them to get real and reach a compromise in the public interest and in the interest of democracy by making these changes to the political finance system. Suggest to them that if, instead of practising misleading spin politics as usual, they acted more honestly, ethically, openly, representatively, and efficiently, they would likely receive more funding, first by convincing more people to donate and second by winning more votes (including from the more than 40 percent of voters who didn't vote in the last election).

Duff Conacher is the Coordinator of Democracy Watch, Canada's leading democratic reform organization.

Posted: February 07, 2011

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