Wednesday, August 12, 2009

Party Funding - Not So Simple

Recently, there has been talk of removing the public party funding from the Bloc Quebecois. It was first brought up in a Globe and Mail editorial by a former Conservative, and more recently was brought up by Minister of State Steven Fletcher, responsible for democratic reform.

Chantal Hébert has a scathing, and in my view justified, opinion on that matter.

One of the basic elements of the argument is that the Bloc is dependent on the public subsidy for survival, and that Canadian tax-payers are funding a sovereigntist party. Of course, the $1.95-per-vote subsidy is actually funded by the voters themselves. If you vote for the Conservatives, your $1.95 will go to the Conservative Party. If you vote for the Bloc, your $1.95 will go to the Bloc. That is a very democratic way of giving the parties public funding.

But the argument falls flat when you realise that private donations to political parties are subsidised at between 50% to 75%. So, if you donate $400 to a political party, you will get $300 back on your taxes. In that way, Canadian tax-payers are funding political parties in an undemocratic way. For example, if a party gets about 60% of all private donations (as the Conservatives did last year), but only had 36% of the vote, that party would be funded by tax-payers in a proportion larger than their portion of the vote.

So, I thought I'd look at how much money each party actually receives from this subsidy on private donations. These are rough, rounded numbers, but according to my calculations should be very close to the actual amount each party has so far raised in 2009 that will come from this private subsidy:

Conservatives - $5,400,000
Liberals - $3,700,000
New Democrats - $860,000
Greens - $270,000
Bloc Quebecois - $210,000

In addition to the $5.4 million the Conservatives will receive from this private subsidy, they have also received $5.1 million from the public per-vote funding. Taking both the public funding and the private donations into account, the Conservatives have raised about $13.4 million. Of that $13.4 million, only $2.9 million will actually be coming out of the pockets of private donors. The rest is coming from the public funding and the private subsidy - or a total of 78% of all of their funding.

In that sense, it is incredibly hypocritical to criticise the Bloc for relying on public funding, paid for by the Canadian tax-payer. The Bloc will only receive a total of $1.6 million from public funding and the private subsidy.

The Conservatives will be receiving about 6.5 times more funding than the Bloc from tax payers, while they only had 3.7 times more votes.

The number of 86% is often thrown around as how much of the Bloc's funding comes from the public per-vote funding, compared to the 38% of the Tories. The Bloc reports donations differently. Unlike the other parties, funds are raised in and for the local ridings to spend. The Bloc does not do major national funding and then distribute it to the riding associations, as the other parties do. As far as I can understand from the reports on the Elections Canada website, the Bloc raised $191,811 in donations at the national level so far in 2009. At the riding association level, they've raised $140,631, for a total of $332,442 - or 24% of their total revenue. So, if my calculations are correct, the Bloc's funding comes 76% from the per-vote funding. Still high, but not so high.

UPDATE - Thanks to The Pundits' Guide for pointing out that my calculation of the fundraising of the Bloc in the individual ridings is mistaken. It seems to be very difficult to figure out how much money is raised at the local level by the Bloc, though I'm sure there is a way. Suffice to say, the 86% is still incorrect as the Bloc, according to Bloc MP Pierre Paquette, raises as much money at the local level as they used to do with the national campaigns - somewhere around $1 million.

This post fills in some of the gaps and corrects some of my errors.