Federal political financing in Canada
Canada's federal political parties receive the most significant portion of public funding at election times that is based on what they have spent through electoral expense reimbursements.
(Source: Elections Canada[4]) Public funding of Canada's federal political parties is allocated in two ways:[5][1][3] The per-vote subsidy (amounting to $27.7 million in 2009), also referred to as the "government allowance", the "quarterly allowance", or the "direct public subsidy", was argued by some political commentators to be the most democratic of the three funding mechanisms: The choices of 100% of voters of eligible parties (13,675,146 individual Canadians or 99% of all valid votes in the preceding election) are taken into account, all on an equal-basis.
Sources: Elections Canada, Globe and Mail[1][4]) Of the three ways in which federal parties are allocated public funding, the per-vote subsidy is largely argued as the most democratic as it rewards each vote absolutely equally.
The information stored in the database is then used to customize mailings and phone calls for each targeted donor to appeal to them specifically on issues that they are known to react more strongly to.
(Sources: Elections Canada, Globe and Mail[4][21][23]) In 2009, the overhead cost of fundraising for the top three parties exceeded the net private funds they raised.
Judge P. Theodore Matlow ruled that the law made it difficult for members of small parties to "play a meaningful role in the electoral process.
The Conservative party had not brought up the issue before Canadian voters during the election campaign, but on November 27 – days into its new mandate that began November 18 – the Conservative government attempted to eliminate the per-vote subsidy through a provision tucked within a fiscal update - and designated the update as a confidence motion that would trigger the fall of the government, and the prospect of another election, unless passed.
[8][35][30][31][21][32][33][34] Canada's Parliament was shut down from December 4, 2008, to January 26, 2009, allowing the Conservative government to avoid the confidence vote that it would have lost, and it backtracked on its attempt to eliminate the subsidy.
Prime Minister Harper stated: "There are already generous credits and incentives in the tax system to encourage people to give to political parties today."
Liberal deputy leader Ralph Goodale stated: "Mr. Harper’s position is, essentially, let the big and the wealthy and the most privileged run the show and all the other voices should simply be silenced.
"[7] In spite of the clear opposition by the other parties, in a campaign pledge in April 2011, Stephen Harper vowed to unilaterally eliminate the per-vote subsidy if he wins a majority.
[14][5][2][31][41] On May 25, 2011, just three weeks after the election that gave them majority power, the Conservatives announced that their June 6 federal budget would include the elimination of the per-vote subsidy.
[33][34][42][43] NDP leader Jack Layton voiced his opposition to the plan, saying that "it's wrong", and "opens the door for big money to come back into politics", and he worried about the impact this will have on democracy in Canada.
According to University of Ottawa professor Errol Mendes: "You can see what's happening here, they're moving toward a process of eventually cutting the feet out from all the major opposition parties.
Take away public financing and what you're basically saying is those with the best ability to raise money get to have their ideas heard, and I don't think that's helpful for a democratic society.
"[42][48] Elimination of the per-vote subsidy, with all other things remaining equal, would mean that a very small number of individuals - somewhere between 0.8% and 1.2% of registered voters in 2009 - would control and direct 100% of all the funding to their preferred political parties and candidates.
[4] By the same token, approximately 98-99% of all registered voters would no longer have any participation in how any of the funding is directed - including having no say at all in how any of the taxpayer money involved gets allocated.
[14] The elimination of the per-vote subsidy could also have the effect of further reducing an already low voter turnout by removing an incentive that encourages many Canadian citizens to vote.
[1][4] With the per-vote subsidy, 100% of voters of eligible parties (99% of all valid votes in 2009) participate in determining the distribution of the funds, and do so all on an equal basis.
The children and several other donors that had contributed the maximum allowable $5,400 each - for a total of $108,000 - were all in some way connected to the top corporate executives of one pharmaceutical company.
[1][4] (Source: Elections Canada[4]) In 2006, it was revealed during the Liberal leadership contest that one candidate, Joe Volpe, had received a total of $108,000 in contributions from 20 individuals that were all in some way connected to the top corporate executives of Apotex Pharmaceuticals.
[35] Until the enactment of the Elections Modernization Act in 2018,[50] political parties were only required to report the identities of contributors that had given a total of over $200 to one riding association or the central organization.
[51][52][53] (Source: Elections Canada[4]) In 1997, Industry Minister John Manley disclosed the identities of individuals and corporations that contributed $10,150 and $15,800, respectively, to his re-election campaign.
[49] In 2009, an annual report by Global Integrity, an independent non-profit organization that tracks corruption trends around the world, said that Canada posted a slight "downward tick" based on secrecy surrounding political financing and gaps in government accountability.
[55] According to Global Integrity, "Canada is a really interesting case" in that while it had a generally positive rating, there are "unique gaps in the system that are strange", including that political financing loans to candidates are confidential.
"[55] Elections Canada confirmed in 2007 that individuals could illegally contribute as much as $60,500 over the $1,100 limit and not be detected - simply by donating $200 to each of a party's 308 riding associations.
It rejected calls by the opposition for Elections Canada to be given new measures and tools to be able to detect multiple donations across a party's ridings that exceed the contribution limit.
