Winnipeg Free Press - PRINT EDITION

Per-vote subsidies bad public policy

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Finance Minister Jim Flaherty has made it clear that the subsidy of $2 per voter for the political parties in federal elections will come to an end. These payments are made on an annual basis, but they will be phased out over the next four years, probably on a diminished basis each year.

The Conservative Party itself will be hardest hit, but its finances are in so much better shape than the other parties that the end of this subsidy will help the Tories on a comparative basis. Last year, based on the election results of 2007, the Conservative Party received more than $10 million in the per vote subsidy, the Liberal Party more than $7 million, the NDP $5 million, the Bloc Québécois almost $3 million, and the Green party close to $2 million. That will all change as a result of the 2011 results, which would improve the position of the Conservative Party and the NDP, but drastically reduce the subsidy to the Liberals and the Bloc.

Now that there is a majority government, there is little doubt that the subsidy will be terminated, despite the joint opposition of the other parties.

The per-vote subsidy is but one method of financing political parties. Perhaps the reason the government is about to end it is because its other means of raising funds are far ahead of the other parties'. There are rebates of election expenses that favour the winning party, and like the per vote subsidy, are a direct payment from the public coffers. The political parties also benefit from the tax deductibility of political contributions. Unlike charitable donations, the deductions are directly off the taxes that are otherwise payable, not off taxable income, and the scale of the deductions is very substantial, particularly for gifts of $500 or less.

The Conservative fundraising machine has proven to be far more efficient in raising "tax supported contributions" than the other parties' fundraisers. There are limits on political donations. Corporations and labour unions cannot make contributions, and individuals are held to a maximum annual donation of $1,100 -- a sum that should be increased.

I was watching some of the talking heads on CBC the other day when one of the commentators expressed surprise that the entire system of subsidies and supports has not been challenged as being unconstitutional. But it has. The constitutional challenge was not to federal government policies, but the policies of the provincial government in Manitoba, and it happened back in 1984.

The case is MacKay versus Government of Manitoba and it was argued before the Manitoba Court of Appeal in October of 1985, and decided a month later. The issue that was raised and argued was whether the provision of the Election Expenses Act of Manitoba, providing subsidies to provincial candidates and parties in Manitoba, was contrary to Section 2(a) and (b) of the Charter of Rights. That is the section of the charter that states that everyone has "freedom of conscience..." and "freedom of thought, belief, opinion and expression." The question before the court was whether it was contrary to the charter for the government to support political parties, which in turn enabled those parties to publicize their positions and platforms, which might be inimical to the taxpayer who is required to participate in paying the subsidy.

One does not need to look too far to understand the grievance. For years the Bloc Quebecois has received substantial subsidies which were used to preach the gospel of secession throughout Quebec. Is it contrary to freedom of conscience, or freedom of thought, belief and expression, to require taxpayers to subsidize that propaganda? The Conservative party succeeded in gravely damaging Michael Ignatieff with their attack ads, long before the election itself. Should the public be required to subsidize the cost of these intentionally misleading personal attacks?

The MacKay case resulted in a split decision with Judges Twaddle and Philp holding that charter rights were not violated by the Manitoba legislation, while I dissented and held that the subsidies were unconstitutional. I must concede that the majority view may well be the right one. For the majority, Judge Twaddle wrote:

"The impugned provisions of the Election Finances Act, in providing for state reimbursement of some election expenses... do not impede the freedom of the applicants, or anyone else, to think what thoughts they will... ; nor do they restrict the applicants from expressing their own views and incurring whatever expenditure they think appropriate for the purpose."

On the other hand, I was of the opinion that freedom of conscience was engaged. It was conceded that the legislative program of the government, no matter how offensive to some of the electorate, could not be challenged on basis of Sec. 2 of the charter. However, it was argued that it contravenes the charter to require the applicants to contribute to the cost of the propaganda of political parties seeking public support for their positions. My response was:

"In my view there is no answer consistent with Sec. 2 of the charter other than the state cannot become involved in the financing of political propaganda."

The decision of the Manitoba Court of Appeal was appealed further to the Supreme Court of Canada, and in a most unusual decision, the Supreme Court did not provide its opinion on the merits. The Supreme Court said that there was an insufficient factual matrix to enable the court to render a decision. (It never occurred to the members of the Court of Appeal that there was any shortage of material facts on which a decision could be made.) As a consequence, there never has been a definitive ruling on this important constitutional question.

An ending of all forms of subsidization would be desirable because the constitutionality remains an open question until there is a ruling by the Supreme Court. In addition, it is simply bad public policy to use taxpayers' dollars to fund political parties and their messages. Unfortunately, there is no immediate likelihood that someone with deep pockets will challenge the constitutionality of the various kinds of subsidies to the Supreme Court level. Equally unfortunately, while the current government will move to delete one kind of subsidy, it appears unwilling to cancel all subsidies -- even those that it would like to retain in its own self-interest.

Charles Huband, former leader of the Manitoba Liberal Party and former

Appeal Court judge, practices law

at Taylor McCaffrey.

Republished from the Winnipeg Free Press print edition June 3, 2011 A14

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