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Former Bloc Quebecois leader Gilles Duceppe talks to the media after appearing before the Commons Board of Internal Economy on Parliament Hill in Ottawa, Monday Feb. 13, 2012 . (FRED CHARTRAND/THE CANADIAN PRESS/FRED CHARTRAND/THE CANADIAN PRESS)
Former Bloc Quebecois leader Gilles Duceppe talks to the media after appearing before the Commons Board of Internal Economy on Parliament Hill in Ottawa, Monday Feb. 13, 2012 . (FRED CHARTRAND/THE CANADIAN PRESS/FRED CHARTRAND/THE CANADIAN PRESS)

As Duceppe faces scrutiny, the Bloc struggles financially Add to ...

Already struggling on a barebones budget, the Bloc Québécois is bracing for a financial hit over alleged spending infractions that would hobble the separatist party’s attempt to mount a comeback in the 2015 election, party sources say.

The Harper government is phasing out the per-vote subsidies that filled Bloc coffers every year without the need for fundraising campaigns. The resulting cash crunch has officials preparing to ask riding associations to open up their bank accounts to help pay for the party’s national operations for the first time in years.

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Even in the best of scenarios, the party will go into the next general election with a budget of only $4-million, or about one-quarter less than previous campaigns.

However, it is also worried it might have to reimburse the House of Commons up to $1-million over the so-called “Duceppe affair,” allegations that parliamentary funds were misused for partisan purposes. A penalty would eat into the bank account, which currently holds about $1.2-million.

The Bloc no longer has official party status, and its federalist rivals on the House of Commons’ Board of Internal Economy are investigating the matter. Conservative, NDP and Liberal officials do not hide the fact that they relish the thought that the Bloc, which is still a strong presence in Quebec, according to recent polls, faces ethical problems and could have to pay back misspent funds to Parliament.

Former Bloc leader Gilles Duceppe returned to Ottawa on Monday to address questions about his decision to pay at least one senior party worker – former Bloc director-general Gilbert Gardner – from his House of Commons payroll for seven years.

Instead of cooling the controversy, however, Mr. Duceppe’s closed-door appearance raised new questions and led to an expansion of the review, according to an official statement from the other parties.

The Bloc wants to boost its $1.2-million election war chest to $2-million by 2015. The party is set to receive $2.8-million in per-vote subsidies over four years, but its annual operating budget over the same period will likely be higher, a source said.

Bloc officials said the party’s new leader, Daniel Paillé, is expected to call on riding associations at a meeting next month to divert funds from local activities to national operations.

The move would put a squeeze on riding associations, which had kept most of their money to themselves in recent years, and force the Bloc to compete with the provincial Parti Québécois for donors among Quebec nationalists.

“There will be a return to contributions from ridings associations put forward in the next budget,” an official said.

Mr. Duceppe is holding back any statement on the current controversy until the end of the investigation, but he said after Monday’s hearing that he followed the rules.

“Since when does respecting the law constitute an ethical lapse?” Mr. Duceppe asked reporters.

The Board of Internal Economy is looking into whether House funds can be used to pay a party worker. It is not known when the board will rule.

During the leadership race, Mr. Paillé said he wanted to have $2-million in the bank by the next election. With matching funds from Elections Canada, the Bloc would run a $4-million campaign, which is well below the $5.3-million that was spent in the last election.

Mr. Paillé added the Bloc would use per-vote subsidies of $2.8-million to cover the party’s annual operating costs.

“That’s how we will live within our means, and this will give us the means to turn things around,” Mr. Paillé said during a leadership debate.

However, sources said the party will need new sources of funds to cover about $4-million in expenses over four years as it seeks to top up its war chest and, operating with a staff of around 10 people, attempt to return to its glory years.

The Bloc was trounced in last May’s election and lost its status as a recognized party in the House, which entailed losses of millions of dollars in public funding. Recent polls show the party remains in contention to regain seats in Quebec as the NDP is losing steam there.

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