PM wanted to do most damage to opponents by cutting political donations, opposition MPs say

PARLIAMENT HILL—Newly-released government accounts showing the scope of a generous tax benefit for donations to political parties are evidence, opposition MPs say, Prime Minister Stephen Harper was targeting the opposition parties when he selected outright vote subsidies for the chopping block instead of other forms of taxpayer support.

The $2-a-vote subsidy is slated to end within four years under a budget measure the government is rushing through the Commons before the Christmas recess, but the tax credits for political donations, which benefit the Conservatives most, cost the government millions of dollars more per year, documents tabled in the Commons show.

The accounting tabled in the House of Commons this week reveals the cost of the tax credits, worth up to 75 per cent of a political donation depending on the amount, totalled $36.3-million for the 2010 tax year.

The per-vote subsidies that year totalled far less, $27.3-million for all five main parties, with the Conservatives receiving $10.4-million compared to $7-million for the Liberals and $5-million for the NDP.

With the Conservatives raising $17.4 million in donations in 2010, much more than the NDP and Liberals combined, they would have benefitted most from the tax-credit incentive to donors.

“I don’t think there’s any doubt from the get-go, and right now, with this, we’re seeing evidence of that, that they went after the amount of money that would do the most damage to their opponents,” NDP MP David Christopherson (Hamilton Centre, Ont.) told The Hill Times.

“It was never about democracy, it was never about Canadian taxpayers, it was always about politics and it was always about the viciousness of trying to wound to the point of making the opposition parties disappear,” Mr. Christopherson said. “It was trying to get an unfair advantage out of the guise of doing a favour for taxpayers.”

The subsidy was a much larger share of revenues for the opposition parties than the Conservatives in 2010, with the Liberals raising only $6.4-million in donations and the NDP $4.3-million.

But Andrew MacDougall, Mr. Harper’s associate communications director, said the Prime Minister’s motive in eliminating the vote subsidy was based on a view that public financing should be tied to party support among voters.

“As the Prime Minister has said, our view is that there is a role for some public finance, but it has to be tied to a party’s own efforts or to the willingness of voters to actually contribute money,” Mr. MacDougall said in an email to The Hill Times.

“Canadians should be able to choose whether or not they want to fund political activities, parties should not rely on hand-outs to fund their political activities—they should be making their own efforts to engage with citizens and raise their own money,” Mr. MacDougall said.

The Canada Revenue Agency figures the government tabled in response to a written question from NDP MP Peter Julian (Burnaby-New Westminster, B.C.) do not break the donations down by party. That information is not reported on tax returns.

The formula the Conservatives use to generate a larger number of donations, focusing on smaller donations spread out among more people, is also advantageous. On a donation of $400, the net cost to the donor after the maximum credit of 75 per cent is subtracted is $100, with the proportion of the credit decreasing as the amount of the donation increases.

The Conservative Party of Canada, which spends at least $7-million in fundraising annually, in part through a Washington-based fundraising firm, routinely outdoes the other parties in donations.

Mr. Harper (Calgary Southwest, Alta.) promised to eliminate the per-vote subsidy during the campaign for last May’s federal election, after his first attempt to kill the program ended in disaster for the Conservatives in 2008. Its surprise elimination was included in a fall budget that year, sparking outrage from the opposition and inspiring a short-lived coalition among the opposition parties that threatened to topple the Conservative minority.

The CRA figures and other information the government tabled in response to Mr. Julian’s question are the most comprehensive comparison so far of the subsidy programs available to the major parties.

Another, even larger, source of taxpayer support for the parties, election reimbursements worth up to 60 per cent of candidate campaign expenses and 50 per cent for the parties, totalled $54.9-million for the 2008 election. Again, the Conservatives benefitted the most, receiving $21-million compared to $14.8-million for the Liberals and $11.9-million for the NDP.

Election expense reimbursements were a key part of the recent Elections Canada court case against the Conservative party, which pleaded guilty on four counts to under-reporting expenses for the national Conservative campaign in the 2006 election. As part of a scheme involving “in and out” transfers to candidates to shift expenses for the party’s national advertising campaign to candidates, the Conservatives also increased the amount of reimbursements individual candidates could claim.

The Supreme Court of Canada has agreed to hear a Conservative appeal in separate civil legal action on that aspect of the controversy.

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Source: Hill Times