Part 1 of this series asked: What public good is derived from our investment in political parties with public funds? Missing from that discussion is a discussion on how the existing rules for election expense refunds have a negative impact on our democratic health. The way parties qualify for generous handouts of public funds creates an insurmountable barrier for smaller parties, and rigs the scale towards established ones.
Whenever someone donates to a political party that is registered with Elections Canada, they get a generous tax credit. This means that large, established parties are treated the same as smaller, start-up or “fringe” parties. No matter what party you donate to, you’re eligible for the exact same tax credit. But this is not the case when it comes to election expense refunds for each local candidate election or for refunds for national party campaigns.
Let’s start with local candidate elections in each of the 338 ridings across Canada. In order to qualify for the whopping 60% refund of election expenses, a candidate has to receive 10% or more of the vote. For a new party, attracting 10% of the vote is a very difficult task (for a number of reasons.) It typically takes multiple election cycles for a new party candidate to reach this 10% threshold if they ever do at all. How does this impact the amount of public funding they get to put towards their campaigns?
Let’s use the federal riding of Vancouver Centre as an example:
As is the case in many ridings across Canada, only the three main parties are over the 10% threshold. This means the Liberal, Conservative, and NDP candidate are each getting back tens of thousands in public dollars from Elections Canada (60% of their expenses)
Where does that leave the candidates for the Green Party, the Libertarian Party, and the Marxist-Leninist Party, to name a few? Though financial return details aren’t publicized for the latter two, the Green Party candidate, Lisa Barrett, received 5.8% of the vote after spending $46,544.88. Unlike the candidates for the big three parties, her campaign will not be getting any of that money back because she failed to meet the 10% threshold. This means that by the time of the next election, her campaign will have to raise all $46,000 (plus operating expenses) again in order to spend the same amount in the 2019 election that she did in the 2015 election.
Compare this to the candidates for the big three parties, all of whom spent approximately $100,000. How much do they have to raise in order to be able to spend the same amount in the next election? If they raise only $40,000 (plus operating expenses) they will be ready to spend $100,000 again. Compare this to the Green Party candidate, who has to raise $40,000 in order to spend less than half of what the big three parties can. This is an extreme fiscal disadvantage, and it absolutely unfair. Without doing any fundraising at all, the big three parties already get more public money than the Green Party candidate spent in the last election.
The same story happens in ridings across Canada. On top of that, unless they reach the national threshold, smaller parties won’t get refunds for spending on their nation-wide campaigns either. The larger, established parties already have a host of advantages unrelated to political financing laws. They have established volunteer and donor bases. They have name recognition. Their long history means voters are generally familiar with their overall principles. They also get more free media coverage because they’re seen as serious competitors. How is it fair to pile public dollars onto their already significant advantage?
It’s tempting to take this information and conclude that we should give refunds to candidates regardless of how much of the vote they received. A better question is why do we give them refunds at all? We could put all candidates on an equal playing field by simply removing election expense refunds altogether. Not only would this make our democratic system fairer for smaller parties, but it would save an expense of hundreds of million of dollars that doesn’t do much public good. At election time, I won’t weep for the awful TV and radio ads that could have been, nor will I lay awake at night wondering what annoying robocalls I may have missed out on.
Proponents of electoral reform often say that our current system should be scrapped to increase the competitiveness of smaller parties. By eliminating election expense refunds, we can make smaller parties more fiscally competitive within our current system. We can make our democracy fairer right now and save a few hundred million dollars in the process. We don’t have to change the way we vote or how our MPs are elected, we just need to stop throwing public dollars at political parties that, quite frankly, don’t need it.