Compared to other public supports for political parties, the wage subsidy is a drop in the bucket

Political parties, pandemic or non-pandemic, receive taxpayer subsidies worth tens of millions of dollars a year – an amount that will increase in 2020 when the four national parties receive the emergency wage subsidy to make up for the lack of donations.

The COVID-19 outbreak had a significant impact on the parties' ability to raise money – which explains why the Liberals, conservatives, new Democrats and Greens have applied for the federal government's salary subsidy program. The program pays up to 75% of an employee's pre-pandemic salary.

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The parties collectively employ 200 people, so the grant will cost the treasury about $ 670,000 a month.

There is no doubt that the parties are difficult to make money, as are many companies and organizations in Canada. An analysis of fundraising in March and its comparison with previous years suggests that liberals, conservatives and the NDP may have lost as much as $ 2 million in contributions in that month alone.

The parties that applied for or have already received the grant were denounced today by Yves-François Blanchet, leader of the Québécois Block. The bloc did not apply for the subsidy.

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"Programs designed to prevent the bankruptcy of businesses and individuals today serve to finance Canada's two wealthiest parts," he said.

"It is deeply unacceptable. Liberals don't need it. Conservatives don't."

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The leader of the Québécois Block, Yves-Francois Blanchet, criticized the other federal parties for receiving the salary subsidy. (Sean Kilpatrick / Canadian Press)

Prime Minister Justin Trudeau was repeatedly invited on Monday about the liberals receiving the grant. He said only that the grant is an important program designed to protect companies and nonprofits from being forced to fire employees.

The decision is also causing some consternation among candidates for conservative leadership.

Ontario lawmaker Erin O & # 39; Toole was the first to voice his opposition to his party's decision to receive the grant, promising that if he is elected leader, he will pay that money back over time.

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"Canadians have already sacrificed enough," O & # 39; Toole said in an email to supporters. (He also pointed out that if an election were called, he would prioritize defeating liberals rather than paying the subsidy.)

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Toronto candidate Leslyn Lewis released a statement expressing her "disappointment" at the party's decision.

Former Cabinet Minister Peter MacKay also said that he opposed the party that received the subsidy, arguing that "our party has ended the direct subsidization of political parties by taxpayers".

Parties receive millions in grants already

From 2004 to 2015, political parties received a direct subsidy for each vote received in the most recent elections. That subsidy was eliminated by conservatives under Stephen Harper.

But indirect subsidies by political parties continue. The most significant is that tax credit donors receive for their contributions – 75% of the first $ 400, 50% for the next installment up to $ 750 and 33.5% for the rest, up to $ 1,625.

According to the Finance Department, this credit has cost $ 145 million since 2016, or approximately $ 29 million each year.

But this is not the only source of public funding for the holidays. They also receive lucrative reimbursements for their electoral expenses. These reimbursements are worth 50% of eligible expenses for national parties that receive at least two percent of the votes and 60% for individual candidates who obtain at least 10% of the votes in their constituency.

Party reimbursement for the 2015 federal election (the latest for which data are available) totaled $ 60.7 million, while another $ 42.7 million was paid to individual candidates.

On Monday, Prime Minister Justin Trudeau defended the parties requesting the emergency wage subsidy. (Adrian Wyld / Canadian Press)

This election expense reimbursement adds another level of subsidy to the contribution tax credit.

A $ 400 donation will give the taxpayer $ 300 in tax credits. If the party spends that money during an election campaign, it will receive another $ 200 in reimbursements – the $ 400 donation has been transformed into a $ 500 grant. And if the party spends its refund in another election, it may receive another $ 100 … and so on.

In the end, the wage subsidy will be much less costly than the other subsidies from which the parties already benefit.

Certainly, political parties play an important role in democracy – and they are employers, like any other organization. Like many nonprofits, they can do a good job.

Nevertheless, the appropriateness of the parties that receive subsidies from programs that they themselves have created or supported in Parliament can be debated.

But the wage subsidy is only one of many ways in which the parties have provided themselves with sources of taxpayer finance. Whether these sources are direct or indirect, all money comes from the same place.

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