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Conservatives keep tax credit and expense reimbursement measures, to their own benefit.

Next week, when the Harper government brings down the first budget of its majority era, it will include a controversial provision to phase out the per-vote subsidy for political parties — a move that will save about $27.4 million a year. The principle, as the prime minister explains it, is that taxpayers should not be expected to finance political parties they do not support at the polls.

On one level, it's smart politics, because the loss of the subsidy will hurt the opposition parties much more than the governing party.

Like it or not, we could find ourselves in an American-style, money-is-everything regime, with all the abuses such a regime attracts.

On another level, it is a disingenuous argument. The per-vote subsidy is one of three established taxpayer-financed measures designed to make the political field as level as possible — by controlling the amount of influence that money (and those who have it) can command.

The other two measures are tax credits and expense reimbursements. Stephen Harper is not proposing to eliminate either of those — conceivably because each benefits the Conservatives more than their opponents.

Under the tax credit system, which dates to 1974, Canadians who donate money to federal parties receive a tax credit of up to 75 percent of their contribution. In other words, a $400 contribution earns a tax credit of $300. That's not a "deduction" from taxable income. It's a "credit" — $300 off the tax payable bottom line.

In 2009, the last year for which figures are available, the tax credit cost the treasury $20 million, of which $10.5 million went to supporters of the Conservative party.

Expense reimbursement is the big-ticket item, costing the treasury $55.4 million in 2009. Parties that get 2 percent of the national vote are entitled to reimbursement of 50 percent of their campaign expenses. In addition, candidates who receive 10 percent of the vote in their riding can get 60 percent reimbursement.

That $55.4 million reimbursement figure was based on party and candidate expenditures in the 2008 election. Conservatives collected $21.4 million of the total, $6 million more than the Liberals and $9 million more than the New Democrats.

The tax-credit and expense-reimbursement systems are products of the Trudeau era. The per-vote subsidy, which so annoys the Harper Conservatives, was introduced by the Chrétien Liberals as part of a major updating of the political finance rules.

Their Bill C-24 shut down traditional sources of party funds. It banned all contributions by corporations and trade unions, and it imposed a limit of $5,000 (subsequently lowered to $1,000) on donations by individuals.

To compensate parties for the loss of all this money, Bill C-24 created the per-vote subsidy. Any party that won 2 percent of the national vote was entitled to an annual allowance of $1.75 for every vote it received. Inflation has pushed that figure to about $2 per vote.

Based on the vote in the May 2 election, if this subsidy was left alone, it would cost the treasury $27.4 annually, 60 percent of which would go to the opposition parties — to run their offices, pay staff and researchers, and cover the costs of their leaders' travel, among many other things.

The parties will survive, but the change will increase pressure to raise or remove the ceiling on contributions by individuals — and perhaps to invite major corporations, trade unions and lobbying firms to start financing our political system once again. Like it or not, we could find ourselves in an American-style, money-is-everything regime, with all the abuses such a regime attracts.

A final thought. Harper says taxpayers should not be required to provide financial support to parties they do not vote for. How far would he extend that ideological reasoning? Would he, for example, argue that families who do not have children in the school system should be exempted from paying education taxes? Should healthy people be excused from contributing to the cost of public health insurance? Should people without cars not have to help pay for roads?

Conservative ideology can be tricky stuff.


Cambridge resident Geoffrey Stevens, an author and former Ottawa columnist and managing editor of the Globe and Mail, teaches political science at Wilfrid Laurier University and the University of Guelph. He welcomes comments at the eddress below.

eMail: geoffstevens@sympatico.ca