Per-vote subsidy should be made more democratic, not cut

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Removing the $2 per-vote annual subsidy for federal political parties is yet another undemocratic move by Prime Minister Harper's Conservatives, who have decreased the level of integrity and democracy in the federal government in the past few years, according to Global Integrity's 2010 report.

Because it is based on the key democratic principle of one-person, one-vote, the per-vote subsidy is the most democratic part of the federal political finance system (although it should be made even more democratic).

The subsidy also has the democratic benefit of encouraging voters to vote. Despite the Conservatives' oft-repeated false claim, no one's $2 supports any party other than the one they vote for, as all voters pay at least $2 in tax each year.

In contrast, every election our flawed voting system gives a higher percentage of MPs in the House of Commons to some parties compared to their percentage of voter support. This causes the largest, undemocratic annual subsidy of some parties, and does take tax dollars from some voters and gives them to parties they don't support.

For example, the Conservatives received 24 MPs more than they deserved in the recent election (they received 39.6 percent of the vote, but 54 percent of the MPs). Each of those MPs receives about $440,000 annually in salary and for their offices, so the Conservatives will receive an undemocratic subsidy of $10.5 million every year until the next election.

So a fair, democratic move would be to cut the per-vote subsidy to any party that receives more MPs than it deserves, while keeping it for any party that receives fewer MPs than it deserves (or, even better, change the voting system so that parties receive a similar percentage of MPs as their voter support percentage).

At the same time, the per-vote subsidy was set at too high a level in 2003 by then-Prime Minister Jean Chretien to replace the annual corporate donations the Liberals received at that time. Cutting the subsidy in half to $1 per vote would be a democratic incentive because it would force parties to reach out to more voters in order to prosper financially.

The subsidy should also be cut even more for regional parties that do not operate nationally, such as the Bloc Quebecois, simply because they have lower operating costs than the national parties.

Another needed democratizing change is to decrease the individual annual donation limit from $2,200 to $1,100 (and from $3,300 in election years to $1,650). The current limit is much higher than the average Canadian can afford, given that the average individual annual after-tax income is $35,000-$40,000.

The current limit is also much higher than the average annual individual donation to each federal party of between $100 to $200.  Given this average donation level, another democratizing change would be to decrease the current 75% tax deduction for the first $400 donated so that it applies only to the first $250 donated.

As well, the overall 50% deduction for larger donations should also be decreased to 17% because only wealthy people who can afford such large donations benefit from it, and it is currently another major way in which money from voters is taken to benefit parties they
don't support.

Given the averages set out above, it would be doubly undemocratic to increase the annual donation limit as some people have proposed. Scientific, peer-reviewed research (led by American Robert Cialdini) has shown that even small gifts and favours have influence over decision-makers because they feel obligated to return the favour, so allowing larger donations will only increase the influence of wealthy donors and increase the likelihood of having the best government money can buy.

The cutting of the per-vote subsidy by the Conservatives adds to their democracy-damaging record. For this and many other reasons, the opposition parties should take every possible step, including proposing democratizing amendments, amendments to change the voting system, and filibustering at every stage of the bill's review, to delay the implementation of this change until every voter in Canada is made aware of it.

Duff Conacher is a Board member of Democracy Watch, Canada's leading
democratic reform organization

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