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Alice Funke

Expanding the debate on party financing Add to ...

Many observers of Canadian political parties have relied on just two of the four sources of income, as Jeffrey Simpson did Wednesday when comparing a party's revenue from central fundraising and from the public per-vote subsidy that has been paid since 2004.

However, using a dataset that includes all four revenue sources - riding association and candidate fundraising, as well as party fundraising and the public subsidy - paints a somewhat different picture, particularly in the case of the Bloc Québécois.

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Party fundraising and the subsidy payments are relatively easy to compile from the Elections Canada website, and are reported quarterly. Perhaps not surprisingly therefore, they receive the greatest attention in the popular press. However riding association fundraising is only reported annually (and was not reported at all prior to 2004), and assessing its value requires a tabulation of over 1,000 returns each year. Similarly, candidate fundraising is reported once per election period, often as much as a year later in its final form. Sixteen hundred and one candidates ran in the 2008 general election.

In the hopes of expanding the debate on the financial health of political parties and the best public policy to pursue in regulating and reporting on their sources of income, PunditsGuide.ca has completed a full review of 2008 candidate fundraising and expenditures, along with an up-to-date tabulation of riding association fundraising for the period 2004-2009, for The Globe and Mail's online readers.

The chart below shows the four sources of party revenue as a percentage of their total revenue, with the subsidy depicted as the solid part at the top of each bar, the central party fundraising at the bottom, followed by riding fundraising. Candidate fundraising appears as the checkered part of the bars in election years only (including by-elections).

We see that in every year reported, fundraising by Bloc Québécois riding associations exceeded that by its party headquarters. Certainly the subsidy remained a significant portion of the party's revenues, but not to the extent estimated by most observers to date (in the range of 53-70 per cent, rather than 76-87 per cent). Rather than raising $1 for every $3.5 in subsidy payments, the ratio becomes 1 to 2 in 2009, for example.

Moreover, as I've written elsewhere, the Bloc's quarterly filings reveal the establishment of a monthly pre-authorized contribution program by party headquarters in late 2008, almost certainly designed to respond to and survive any attempt by the current government to reverse the subsidy in future, and whose impact can be seen in the return of their central party fundraising to 2004 levels.

The Conservative Party's pattern of fundraising meanwhile is completely the reverse of the Bloc's, wherein it obtains proportionately higher fundraising proceeds centrally than it does in the ridings.

The starting point for most of the recent debates about the subsidy's role has been the proportion of registered parties' revenue accounted for by public per-vote payments. This metric is invoked to argue that one party might be more dependent on the subsidy than another, that one party might be less deserving of a public subsidy than another by virtue of its raison d'être, or that one or more parties might be more likely to disappear (to the alleged benefit of other parties) were the subsidy to be eliminated.

But when we look at the combined effect of all four revenue sources, the picture that emerges is of one party (the Bloc Québécois) that is significantly more dependent on the subsidy (if dependency can even be defined as the percentage of its revenues), one significantly less reliant on the subsidy (the Conservative Party), and three for whom it represents a more-or-less significant minority share of its revenue (the Liberals, NDP and Greens). The subsidy represented 66.7 per cent of total Bloc revenues in 2009, 56.1 per cent of the Greens' income, 49.8 per cent for the NDP, 36.7 per cent for the Liberals, and 31.4 per cent for the Conservatives. Those percentages variously represent the high or low watermarks for each party over the past six years.



In every year reported, fundraising by Bloc Québécois riding associations exceeded that by its party headquarters.


The latest proposals to eliminate the subsidy and replace it with a different regime originated in June from various wings of the Liberal Party, in response partly to some recent work by Professor Tom Flanagan and his then-student David Coletto, but also to present an alternative to the proposed post-election coalition discussions. Championed by such Liberal bloggers as Jeff Jedras, Dan Arnold and others, the new regime would see the subsidy eliminated and replaced by higher contribution limits, and even a return of corporate contributions in some variants of the proposal.

We should be honest enough to say that those Liberals are proposing a regime that best fits their relative advantages and disadvantages in the fundraising realm. And why not, when the Conservatives clearly intend to eliminate the subsidy as a way of enhancing their own, opposite advantages. Or when, supported by the NDP, the Conservatives moved to reduce the contribution caps to $1,000 from $5,000 several years ago.

But if we go too far down the road of allowing the victor to create the rules, that's the most anti-democratic outcome of all. Whatever one might believe about the merits of public funding of political parties, the fact remains that prime minister Jean Chrétien introduced it unilaterally, thus violating a longstanding convention that the parties in the House of Commons would collectively establish rules they could all agree on, a rule that was still in effect as late as the 2000 Elections Act amendments.

The second element I hope people will consider is the importance of establishing a principled basis for making those rules, rather than picking some solutions that appear to have a short-term benefit for their own party but might later be found to have altogether different consequences. No doubt Mr. Chrétien believed he was promoting greater democracy by "keeping big money out of politics", but he did not perhaps fully anticipate the impact it would have on his own party.

A number of Liberals who now argue (quite brazenly in some cases) that eliminating the subsidy would eliminate the smaller parties who are currently their most pesky competition, ought to take a second to examine more closely how, if at all, their own dependency on the subsidy differs from that of other parties. Eyeballing it as a proportion of revenues, it does not seem significantly different from the NDP's over the same period of time.



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Moreover, revenue is not the only part of the equation. It might be worth asking whether the other political parties have the same cost structures as the Liberals, who operate separate national and provincial-territorial associations, or whether they in fact have lower overhead. Several have survived on shoestrings before, the New Democrats in particular surviving the loss of official party status for a four-year term. The NDP was able to survive and rebuild without the subsidy; the Liberals who advocate eliminating the subsidy now should ensure they would truly be able to do the same.

Meantime, others in the press who have recently argued that excising three-quarters of its revenue would remove the Bloc's incentive for "laziness", as was stated in a recent Sun Media editorial, cannot have closely studied its true financial situation.

The Bloc raises enough at the riding and candidate level each year alone to run fully funded campaigns after the candidate rebates, and yet it is able to win fully two-thirds of the province's seats spending on average less than two-thirds of the limit in each constituency. Combining the riding-level surplus with its central fundraising would still allow that party to adequately finance its central campaign, after the central rebate is taken into account. We also know it costs significantly less to run a campaign across a single province in a single language than it does to run a national and bilingual one.

So to summarize, whether you are a libertarian who does not believe in any public funding of the political process or limits on money in politics, a radical federalist who believes we should not be subsidizing institutional separatism, or a devotee of the internationally-renowned Canadian philosopher C.B. Macpherson who argued that a democratic polity is the best counterbalance to an undemocratic economy and requires party financing rules that ensure the widest possible participation in our democratic process, carry on the debate.

But, now you can do so with the benefit of a more complete dataset. And please try to take a longer and principled view.

Alice Funke is a database specialist and computer-assisted reporting consultant who runs PunditsGuide.ca

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