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The per-vote subsidy: Political welfare or the great leveller?

Conservative leader and Canada's Prime Minister Stephen Harper works behind the counter during a campaign stop at a Tim Hortons in Dieppe, New Brunswick April 1, 2011. Canadians will head to the polls in a federal election May 2.

Chris Wattie/Reuters/Chris Wattie/Reuters

Stephen Harper's campaign pledge to cut the per-vote subsidies that political parties receive has opened a clear debate with his opponents: Are the funds welfare for politicians or a way to counter the pernicious influence of money in politics?

The parties are clearly aligning with their self-interests. The Conservatives' wide lead in private donations means their opponents need the public funding to compete.

On Friday, Mr. Harper promised to revive past attempts to cut off the per-vote subsidy collected by parties if his government is re-elected on May 2, arguing that the money is the reason Canadians have gone to the polls so often in recent years.

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"It is partly in my view this per-vote subsidy - this enormous cheque that keeps piling into political parties every month, whether they raise any money or not - that means we're constantly having campaigns," the Conservative Leader said at an event near Moncton.

"The war chests are always full for another campaign. You lose one; immediately in come the cheques and you are ready for another one even if you didn't raise a dime."

Mr. Harper regularly castigates the Liberals, Bloc Québécois, and NDP for attempting to unseat him with a coalition when he tried to cut off the subsidies shortly after the 2008 election. And while the opposition triggered the current campaign with a non-confidence vote, Mr. Harper had a role in causing two previous elections, voting with the Bloc and NDP to defeat Paul Martin's Liberal government in 2005, and calling a vote in 2008.

Mr. Harper's opponents said the subsidy - each party gets $2 per year for every vote they received in the previous election - is a democratic way to put the parties on similar footing. NDP Leader Jack Layton said the Tory plan would put politics back in the hands of the rich.

"The question really is: Do we want to go back to the days where money, and those who can finance campaigns, determine the nature of our democracy?" Mr. Layton told reporters at a campaign stop in Sudbury, Ont.

The per-vote subsidy was introduced in 2004, when the Liberals, reeling from the sponsorship scandal, eliminated most corporate and union donations. Mr. Harper tightened the system further, reducing the maximum donation to $1,100.

The Liberals, who long relied on big corporate donations, now consistently trail the Conservatives' fundraising machine, which has used mail and Internet campaigns to canvass individuals. The Tories raised $17-million in donations in 2009, compared to $9-million for the Liberals and $4-million for the NDP; the Bloc Québécois relies heavily on the subsidy, and raised only $621,000 in donations.

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But the per-vote subsidies are only one of several that parties receive - and Mr. Harper has not targeted the others. Candidates and parties receive rebates on a large part of their election spending. And tax credits on donations - 75 per cent of the first $400 donated, 50 per cent of the portion between $400 and $750, and 33 per cent of the on the rest - cost the Treasury $20-million in 2009.

Some, like McMaster University political scientist Henry Jacek, say that the problem with parties supporting their activities with donations alone is that it relies on the wealthy, who tend to give financial support to political parties, not the poor. The subsidies, he said, "level the playing field."

It's clear from various jurisdictions that political donors tend to have disposable income. But it's no longer clear to what extent that's true in Canada because the Canada Revenue Agency has stopped publishing tables indicating the income levels of those who claim donation tax credits, said University of Calgary political finance expert Lisa Young. But common sense indicates that those who will get a big chunk of the money back at tax time, and miss it less in the meantime, will be more likely to donate, she said.

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Chief political writer

Campbell Clark has been a political writer in The Globe and Mail’s Ottawa bureau since 2000. Before that he worked for The Montreal Gazette and the National Post. He writes about Canadian politics and foreign policy. More

Parliamentary reporter

Gloria Galloway has been a journalist for almost 30 years. She worked at the Windsor Star, the Hamilton Spectator, the National Post, the Canadian Press and a number of small newspapers before being hired by The Globe and Mail as deputy national editor in 2001. Gloria returned to reporting two years later and joined the Ottawa bureau in 2004. More

Parliamentary reporter

Steven Chase has covered federal politics in Ottawa for The Globe since mid-2001, arriving there a few months before 9/11. He previously worked in the paper's Vancouver and Calgary bureaus. Prior to that, he reported on Alberta politics for the Calgary Herald and the Calgary Sun, and on national issues for Alberta Report. More

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