Friday, June 11, 2010

Why the Liberals should support ending the per-vote subsidy

A report in La Presse confirms the Conservative government’s (oft-stated) intention to end the per-vote subsidy to political parties. This frightens many Liberal nervous nellies. I think this is an opportunity for the Liberal Party to make a bold move, however. The Liberals should support ending the subsidy, but with one significant addition: raise the limit on personal donations to $5000.


I would like to see the Liberals reframe this debate and seize the agenda by proposing its own political financing legislation: end the per vote subsidy but raise the limit on personal donations from $1100 back up to $5000. Union and corporate donations would remain forbidden.

On the per-vote subsidy, ending it wouldn’t be the calamity for the Liberals many think it would be. At least, it wouldn’t be as mad for us as it would be for others.

The party that would be most hurt by losing the subsidy would be the Bloc Quebecois. The BQ relies on the subsidy for nearly all of their budget, and since they only need to campaign in Quebec, it allows them to run a very strong campaign with barely any fundraising.

The next party that would be most hurt by ending the subsidy would be the NDP. They’ve dramatically escalated their election and between-election spending since the creation of the subsidy, spending at levels they never had before, thanks to the per vote subsidy. Ending it would require a major scaling-back of their budget, and the size of the campaign they could run.

Now, I won’t say the Liberals wouldn’t be hurt. Losing the subsidy would be a blow, without a doubt. Significant adjustments would have to be made (and getting a little leaner wouldn’t necessarily be a bad thing). But the fact is we are less reliant on the subsidy than the other opposition parties, and we have been getting (very slowly) better at fundraising.

I am, though, proposing one major change to be coupled with ending the subsidy: raising the personal donation limit to $5000, where it was before the Conservatives and the NDP conspired a few years ago to lower it down to its current level (around $1100), primarily to try to handicap the Liberals.

I think we can make a strong case for restoring it for a number of reasons.

One, public financing was brought in when Jean Chretien’s government ended union and corporate donations, the argument being if you’re going to remove that fundraising capacity from the parties you should give them an alternative, and a small public fee to end the corporate and union influence in politics is a small price to pay. The same holds true here. If you’re going to remove the public subsidy, you should give parties the capacity to be able to replace that funding. That’s an argument of fairness I think will resonate with the public.

Two, why should the government be able to restrict my ability as a private citizen to support the political party of my choice. While I do support reasonable limits (and I think $5000 is reasonable) there are many people who believe money is speech, speech should be unlimited, and the government has no right to abridge the people’s right to speak. One of those people is Stephen Harper. As head of the National Citizens coalition, he argued stridently for the right of third-party pressure groups to spend anything they want, free of election spending limits. He even took it to the Supreme Court in Harper v. Canada. We should ask Harper, if money is speech, why does he believe in free speech for lobby groups but not for individuals?

Ending the subsidy coupled with raising the donation limit would be a win-win for the Liberals. We would regain our fundraising capacity and emerge stronger than before, and able to capitalize on the impact it would have on the other opposition parties, particularly the BQ in Quebec, where under Stephane Dion we actually gained seats in the last election.

Even more than that though, it would be a bold proposal that would reframe the party financing debate and force the Conservatives onto the defensive for a change. The opportunity is there, if we’re bold enough to seize it.

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42 comments:

Jason Cherniak said...

An interesting idea, but then I couldn't afford the Laurier Club anymore. :)

That's a bit of a joke, but there is something to it - if you raise limits you really do increase the access of those who can afford to pay. I would much rather see donations openned back up to corporations at a rate of $1,100 a year because one of the worst problems in raising money is convincing business people to give personal money instead of corporate money.

penlan said...

A good idea, Jeff. I'd also like to add that there should be a spending cap on the amt. each Party can spend on elections & ONLY during a campaign. No more pre-election ads, etc.
No more "not a leader", "just visiting", etc.

ridenrain said...

I don't know anybody who would donate $5000 to a political party and I suspect anyone who does, would be expecting something far beyond good government. Whatever happened to political parties being supported by average members?

Canadian silver bug/Green Assassin Brigade said...

I always love these discussions focusing on how we can hurt other parties rather than how we can make the system more fair.

Both disgusting and a good reason the public thinks political types are scum.

Proud Canadian said...

Sir as you know we usually don't agree on politics,but thats fine its o.k. I agree with you on this issue,except for one thing! That is the limit of donations. I don't believe we should put limits. If you want to sell your home so that you can give the cash to your party it should be your right.

I could hear peoples say what about the rich not fair for the poor. Who ever said that life is fair? Let me give you examples. Should we prohibit peoples from buying luxuries because certain segments in our society can't afford it?

Sure when the Conservatives wanted to do this they had their own reasons. We all know what they were. Your right Jeff the Bloc would be toast. In my opinion one of the reasons why the Bloc does so well in Quebec is because they get more bang for their buck! They only advertise in French! I find it crazy that we should be forced threw our tax dollars to subsidize a party that wants to break-up our country we all love.

Steven C. Britton said...

Given this is exactly what the Association of Separatists and Socialists claimed to be about in December 2008 -the elimination of the per-vote subsidy. Clearly it was really about doing an end-run around the democratic election held 6 weeks earlier, but the three parties involved would never admit to it.

How telling, now that somebody has realized that ending the per-vote subsidy may actually play well with the electorate, that Liberals are talking about supporting the initiative.

It's never about principle; it's about power.

Greg said...

A good, solid, blue Liberal/Conservative coalition move. The love that dares not speak its name just goes on and on.

Proud Canadian said...

I don't believe we should allow corporations or unions to donate monies to political parties! For these two reasons. First they would want something in return when that particular party gets power and secondly you are forcing indirectly share holds and peoples who pay union dues to support a party in which they have nothing in common.

skdadl said...

If anyone wonders why a merger with the Liberals was never in the cards for the NDP, s/he need read no further than this post.

The Liberals are the party of John Manley, and they see no problem with subverting all progressive constitutional thought since the C17 with lines like "money is speech."

Shameful, but a very easy position to tackle in an election.

Jeff Jedras said...

Jason, you still have a few more year of the under 35 rate to get into the garden soiree. I didn't bother with Laurier this year though, in non-convention year benefits seemed minimal. Anyway, I think keeping corporate donations banned is the right decision, we don't want the corporate influence in politics.

Penlan, an interesting idea but it may run up against free speech issues.

CSB, the discussion doesn't focus on that but if you don't think it's going to be part of the considerations of any party making any decision, you're naive.

ridenrain, if someone gives $5000 to an environmental charity are they suspect, are they unaverage, are they suspicious? Do they expect something, other than meals for the homeless or trees planted in the rain forest? Some people think strong political parties with views that mirror their own are something worth supporting, and some people have more capacity to support them than others.

Steve, the Liberals position on the subsidy hasn't changed. I'm just a blogger in Toronto with an opinion, not Michael Ignatieff.

PC, I don't agree with you on no donation limit at all, but I do at least applaud you for taking a more ideologically consistent position than your leader.

Greg, give me a break. I know this doesn't fit the narrative you've set for yourself in your head, but it was the NDP and the Conservatives that teamed-up (coalition! unholy!) early in the first Harper government to make changes to election law designed specifically to screw the Liberals. They cut the personal donation limit, and they made sure it applied immediately, in the middle of the Liberal leadership race, specifically to screw the candidates and burden them with debts they're still facing because you changed the law mid-race. That was your NDP-Conservative love that dare not speak its name at work. So, really, give me a break.

Skaddl, actually I was quoting Harper and suggesting we throw his words back at him.

The Jurist said...

Anybody remember that the Cons actually thought the NDP would go along with slashing the per-vote subsidies on the basis that the Libs' greater reliance on them would result in their demise? And how the NDP responded to that argument?

Which is to say first, that there's no guarantee that it's the Libs that'll come out ahead if the per-vote funding gets slashed. And second, that if they do put attacking the other opposition parties ahead of anything that serves a positive purpose, the NDP will be well positioned to counter that warped sense of priorities.

Mark Francis said...

When the idea of a per-vote subsidy was first floated to replace corporate and union donations, it was widely believed to be necessary to have the subsidy in order to avoid a constitutional challenge to the banning of corporate and union donations.

I completely disagree with the idea to get rid of the most democratic of our political subsidies. The Liberal Party should play this smarter and propose eliminating all of the other subsidies while keeping this one.

Ever notice how the Conservatives pretend the other subsidies don't exist? They are glad to hang onto the subsidies that help their party more than everyone else's.

For instance, we're rebating half of every central party's electoral expenses (tens of millions overall), and EC can't even verify how the money was spent. Time to bring an end to it.

Does it really make sense that an EDA with 9.99% of the riding vote gets no rebate, where one with 10% gets 50%?

Why are some low-income persons unable to claim a tax credit when they donate money to a Party? It's a non-refundable tax credit, so persons beneath the lowest tax bracket who hand over $25 sacrifice as much as a person donating $100 from that tax bracket. This is regressive.

There's so much to complain about and reform here. Getting rid of the most transparent and democratic subsidy is not the way to go.

Get rid of the rest.

Oh, it won't happen, but the Canadian people would get better educated about how these various subsidies work and would ask questions about the Conservative's obsessions with just the one.

Right now, most know of no other subsidies but the per-vote one.

MERBOY said...

I HATE that the whole discussion around ending public subsidies for political parties never includes the tax rebate people get when they donate.

If having the government give a party money because an individual decided to vote for them isn't good... then how is having the government subsidizing donations ok?

Jim said...

Jeff, I agree with most of what you propose, except I would propose that political contributions lose their tax deductible status.

Greg said...

Greg, give me a break. I know this doesn't fit the narrative you've set for yourself in your head, but it was the NDP and the Conservatives that teamed-up (coalition! unholy!) early in the first Harper government to make changes to election law designed specifically to screw the Liberals.

What I love is your proposal to raise the personal limit to $5000. As you said, give me a break. Progressives need to ask themselves what your party would be willing to do to squeeze that 5 large from individuals? My guess is, follow policies the Conservatives would support, tax cuts for the rich and corporations and spending cuts for everyone else. It may not be a physical coalition, but it is a coalition of interest.

Alex K said...

The fact is, wealthy people are more likely to support the conservative ideology of small government. We would be doing ourselves and Canadian democracy a disservice by increasing the influence of money in politics.

BUT, if we campaign against big money in politics, that may be a populist message.

Jeff Jedras said...

And puppies, Greg. They'd probably want to kill puppies. This kind of class warfare -- anyone willing to donate more than $1100 is evil -- went out of style in the 19th century. Maybe we have different definitions of progressive, because I don't think class warfare and conspiracy theory is particularly progressive.

Jeff Jedras said...

Jurist, the NDP has continually put attacking other parties first. I don't say that to complain, I say that to point out all parties do that and false claims to moral piety by the NDP are also easily debunked.

MichaelB said...

And phase it in over a number of years to give the parties time to adjust. And give the Tories a chance to prove its not just some tactic designed to upend their opponents in the next election.

And I totally agree that all spending between elections be capped at election levels. Run attack ads during the summer; deduct it from the next campaign.

pogge said...

It's not that anyone wishing to donate more than $1,100.00 is evil. It's that a higher limit means that people with deep pockets have a louder voice than everyone else. That might be good for the Liberal party (which says something in itself) but it would suck for democracy. Is that an accurate reflection of your priorities?

Greg said...

This kind of class warfare -- anyone willing to donate more than $1100 is evil

Using Republican talking points now Jeff? You have been hanging around the National Post too much.

Jeff Jedras said...

pogge, while the Liberals have traditionally had more donations over the $1000 mark, there's no reason other parties couldn't as well. The ground would be open for all.

As for the influence question, let me put it another way. Under our tax system, the more you make, the more you pay, because you can afford to. That doesn't mean the more tax you pay, the more influence you have over government policy. So if someone has more capacity to give more, and wants to, as long as their motives are just, why shouldn't they?

There are lots of measures in place to guard against influence peddling. All donations are public record. There's a lobbyist registry that records meetings, and other public disclosures. And there are laws against influence peddling. If anyone has ideas for more transparency to guard against it, I'm open to hearing them.

I don't, however, think assuming everyone's motives are suspect is sufficient justification for a low cap. I prefer a higher personal limit, but with transparency to guard against improper behaviour and strong punishment for those that violate the public trust.

KC said...

Anyone who thinks that $5000 donation will buy you anything from government is deluding themselves. Even with that limit your donation is too small in the grand scheme of things to make a difference.

pogge said...

I'm sorry but I don't think I'm the one who's deluded here. Anyone who thinks that political parties can be counted on to resist the temptation to tailor their policies towards those who can give them thousands of dollars more than the next guy hasn't been paying attention.

Liberal Justice said...

I agree with ending the per vote subsidy, and wrote a post about that as well. I also agree with Jason C's idea of allowing corporations (and unions I might add) to donate again but with the limit in place. I don't agree with raising the limit (though I think the whole convention fee issue needs to be resolved in a better way). I think we need to become experts at raising smaller donations.

Mark said...

Bloc voters give their money to the PQ because the Bloc doesn't need it. In fact, the Bloc would probably rather its donors give to the PQ instead, as that's where their stated priority lies.

If the Bloc suddenly needed money, the rabid separartists would be happy to start forking over small donations.

Here's a better idea - repeal the ban on corporate and union donations. There's no reason why collective entities shouldn't be allowed to participate (with some limitations) in the political process. It violates the Charter, and in a few more years you'll have enough data to show that Section 1 doesn't save it anymore.


By restricting political donations to the extreme, the only thing we have accomplished is made money MORE IMPORTANT THAN EVER in terms of its influence over election outcomes.

Let corporations and union give $10k a year to whatever party they want. Anyone who honestly thinks that a government make spolicy decisions based on a few hundred bucks in donations is crazy.

Duff Conacher said...

The individual donation limit and the per-vote subsidy should both be cut in half, but at least both should be maintained because they are the most democratic aspects of the federal political financing system because they are most closely based on the fundamental democratic principle of one-person, one-vote (and so all the provinces and territories should implement them also).

The individual donation limit is actually $2,200 annually and $3,300 in election years -- it should be decreased because it is already much higher than an average voter can afford (given that the average annual salary in Canada is about $35,000) even with the approx. 50% tax deduction you receive for political donations (because you still have to have the money to make the donation in order to receive the deduction).

Like the tax deduction for donations, the per-vote subsidy does not require anyone to subsidize with their tax dollars any party or candidate they do not support -- as is completely obvious if you actually think about it, the deduction and subsidy come only from the taxes paid by a voter who votes for a party or makes a donation.

The per-vote subsidy gives parties support based on their popular support (the number of voters who vote for each party) -- what could be more democratic? However, it is too high because it was set originally by Jean Chretien and his Cabinet at a level ($1.75 then in 2003, $1.95 now (inflation-adjusted)) to replace exactly the amount in corporate donations the Liberals were receiving annually).

It therefore gives the parties much more than a base of financial support, it gives them a large portion of their overall support. This support continues every year in between elections even if they party acts in ways that causes it to lose voter support. For these reasons, the per-vote subsidy should be cut in half so that it only provides a base of support and the parties are forced to continue to appeal to voters in order to prosper financially.

See details in Democracy Watch's letters-to-the-editor and op-eds on the federal political finance system at:
http://www.dwatch.ca/camp/OpEdAug1709.html
AND
http://www.dwatch.ca/camp/OpEdNov3008.html

Hope this helps,
Duff Conacher, Coordinator
Democracy Watch
http://www.dwatch.ca

Mark said...

"Why are some low-income persons unable to claim a tax credit when they donate money to a Party?"


Ummm... probably because you have to pay taxes in order to apply a credit against those taxes?

briguyhfx said...

I too miss the days of royal courtiers! Why stop at $5000/person? Raise the cap to $5,000,000, and allow only those who donate a cool million to have the ear of MPs.

I and my fellow Barons heartily support this idea of yours, Jeff, even if it doesn't quite go as far as we (and Harper) would like.

Proud Canadian said...

To Jeff Jedras:

"PC, I don't agree with you on no donation limit at all, but I do at least applaud you for taking a more ideologically consistent position than your leader."

Sorry for talking so long to respond this,but I had other things to do. I resent the fact that you say that he is my leader. He's everyones leader. He's the head of our government. If you meant that I'm a member of the Conservative party you're wrong! I'm not a member of any political parties never have been and probably never will be.

Now that said why would you be against a no donation limit? I don't understand! What I mean its our money,right? Thank you!

DL said...
This comment has been removed by the author.
DL said...

FYI: Ending the public funding of parties would also annihilate the Green party which gets about 90% of its operating budget from the $2/vote deal.

Eugene Forsey Liberal said...

Everyone who thinks the Bloc would be terribly hampered by cutting the subsidy know nothing about QC. Yes, it helps. But separatism, nationalism and the ability to have a safe protest vote are so entrenched in QC, that it would make little difference. Cutting the subsidy would equal cutting off one's nose to spite one's face. Stupid. This is what comes of Coyne's omnipresence - some people start to take him too seriously. He's smart, he's fun, he writes pretty well. But the reason he is these things is because he tries to amuse Canadians by usually taking all premises to their logical and often hilariously ridiculous conclusions. His best stuff is when he isn't coherent, because his principles lead him one way, and his preferred outcome is different, so he uses sleight of hand to appear to square unsquarable circles. More power to him. Fun stuff. But don't take it too seriously. I do enjoy his work. But I don't fool myself into thinking he is right, at all times, on all things. And on this, he is completely wrong, as it relates to the Bloc.

If this is proposed on principle, it's wrongheaded but fine. But the idea this will deal some terrible blow to the Bloc is laughable. They managed fine before (uh, 1993-1997-2000?) They'd be fine again.

It's a bad idea for all Opposition parties, unless we go completely back to old ways, which would let Liberals become big-money party again. Which I oppose. Even Flanagan gets this. Really. Think things through, gentlemen and gentlewomen.

RuralSandi said...

In this so-called world of freedom and democracy, I really hate being told how much of MY money I can spend to support a party.

But, if a limit is required, up it a little.

If Quebecers want to support the BLOC, let them. I don't see why the rest of Canada has to support them via subsidies.
Ridenrain - as they say, those that don't trust, can't be trusted themselves.

ol lib curmudgeon said...

What the Liberals should propose is a decrease in the tax credit by 50%. It would hurt the Harpocrits more because all the ones I know are tight bastards and they would whine about not getting the tax break.

Issachar said...

You've hit the nail on the head Jeff. Ending the voter subsidy is a no-brainer as the system is based entirely on involuntary donations. (aka, tax payers "donate" whether they want to or not). Additionally, since our taxes aren't collected on a head tax basis, the people at the upper end of the income scale have their involuntary donation designated by others.

But Jason Cherniak's idea of having corporate donations back contradicts the principle of voluntary donations. As he said, it's easier to convince business people to give business money than personal money because a lot of the time it's NOT their money. It's the shareholders money. The problem is even worse with union donations. Union membership is mandatory much of the time, so the union is forcibly donating on behalf of members.

Donations should be voluntary. A party's ease in securing a donation is an entirely secondary concern.

Merboy also hits another oft-neglected nail. Additionally, isn't it rather sick that our tax system gives a greater financial system to donate to a politician than Doctors without Borders?

briguyhfx said...

I don't see how people are donating "against their will" with the per-vote subsidy. Each vote comes from a person, you see. If no people vote for a party, they get no subsidy. Even the people who decide that all the choices suck get a say in where the money goes when they don't vote. The "rest of Canada" is not subsidizing the Bloc...they get all of their votes from Quebec.

Voting with your wallet is profoundly undemocratic. Not surprising to see it espoused amongst so many insiders.

briguyhfx said...

I don't see how people are donating "against their will" with the per-vote subsidy. Each vote comes from a person, you see. If no people vote for a party, they get no subsidy. Even the people who decide that all the choices suck get a say in where the money goes when they don't vote. The "rest of Canada" is not subsidizing the Bloc...they get all of their votes from Quebec.

Voting with your wallet is profoundly undemocratic. Not surprising to see it espoused amongst so many insiders. If a party gains widespread appeal, they should be able to build a war-chest with many small donations, not a few large ones.

Issachar said...

Briguyhfx,

There's two main reasons why people call vote subsidy's involuntary donations.

1) It is involuntary. You cannot vote without "giving" money. If you don't want to funnel money to a party you have to stop voting.

2) Vote subsidy's are divided on a "head" basis, while taxes are raised progressively. Effectively, those who pay less tax direct the involuntary "donations" of those who pay more taxes. To be "donating" your own money, we'd have to have head taxes instead as even a flat tax would have some paying more than others. Most people like progressive taxation for schools, hospitals, policing, roads, justice, social programmes and the like. We don't like progressive taxation to directly fund political advertising.

Voting and donating are two entirely different things. Most of us vote. Few of us want to donate to political parties.

Issachar said...

On the issue of money being speech, Michael Kinsley made a solid argument that money is speech in May's Atlantic Monthly.

"A Republican Congress, for example, could decide that The Washington Post is too influential compared with The Washington Times, and require The Post to cut its budget (a superfluous requirement these days, perhaps). Most journalists would have no trouble correctly finding that in this case, money is speech after all."

Of course he's also talking about corporate speech, but whether or not corporations have rights as persons is an entirely different question as to whether actual human beings have the right to spend money to make their speech heard.

DL said...

WE also all "involuntarily" donate because all the salaries for MPs and the funds that go to each parties caucus services etc... come out of tax revenues. With the logic some people are using maybe we should stop paying salaries to MPs and make them panhandle on street corners in their ridings!

Issachar said...

Not at all DL. Don't be silly. Anyone can see that there's a qualitative difference between a pay cheque and a political "donation".