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October 23, 2008 (FB066)

In Brief:

Public subsidies to political parties have increased dramatically since 2004 when existing subsidies were increased and a new annual “allowance” (paid in quarterly instalments) was enacted.
Since 2000 and to the end of 2008, taxpayer subsidies to political parties are estimated at $313 million with $290 million of that paid out since 2004.

What Saved the Bloc Quebecois in the 2008 Election: Public Money

Taxpayer subsidies for political parties since 2000: $313 million

Over the past several decades, there have been several key changes to how Canada’s federal political parties are funded. The most recent and significant changes took effect in 2004 with federal legislation (Bill C-24, passed in 2003) which banned corporate and union donations. That legislative change also limited personal donations to $5,000 per individual donor. Effective in 2007, that limit was lowered by the new Conservative government to $1,100 per individual, per year, adjusted annually for inflation. That limit also applies to candidates in federal ridings.

In addition to the 2004 ban on union and corporate donations, the 2004 changes also provided for increased public — i.e., taxpayer-financed — subsidies to political parties. In particular, existing public subsidies to parties and candidates were increased and a new subsidy introduced:

Results of 2004 and subsequent changes:

• Political parties are reimbursed for 50% of their election expenses (compared to 22.5% previously);

• Candidates are reimbursed for 60% of their election expenses (compared to 50% previously);

• A new annual “allowance” was created for political parties based on the number of votes cast for each party in the most recent federal election. The legislation provides for inflation adjustments. As of October 2008, a registered political party receives the equivalent of just over $1.95, annually, for each vote received in the previous election, an amount that is paid in quarterly instalments.

For example, if Party “X” received 1,000,000 votes in the 2006 election, it would receive $1.95 million in an allowance in 2008, paid quarterly.

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Author's Picture Mark Milke, Director of Research also lectures in Political Science at the University of Calgary where he received his doctorate. He is the author of three books on Canadian politics, including the 2006 A Nation of Serfs? How Canada’s Political Culture Corrupts Canadian Values from John Wiley & Sons. He is a former director (first in Alberta and then British Columbia) with the Canadian Taxpayers Federation 1997-2002. Since 2002, among other work, Mark has written policy papers on British Columbia’s treaty process, the Canada Pension Plan, Alberta’s Heritage Fund, automobile insurance, corporate welfare and the flat tax. He is writing a book on the effects of anti-Americanism on deliberative democracy in Canada and is a Sunday columnist for the Calgary Herald. In addition, his columns on politics, hiking, nature and architecture have been published across Canada including in the National Post, Globe and Mail, Reader’s Digest, The Western Standard, Vancouver Sun, and Victoria Times Colonist and the Washington DC magazine on politics, The Weekly Standard.