Down on donations
Over the past decade, the provincial government provided a $1.5-million subsidy to Newfoundland and Labrador political parties by way of tax write-offs for individual citizens and corporations.
Over the past decade, the provincial government provided a $1.5-million subsidy to Newfoundland and Labrador political parties by way of tax write-offs for individual citizens and corporations.
In 2015, the most recent year for which information is available, the tax write-off for political donations was nearly $300,000.
In recent months, there’s been a fair bit of public discussion about political financing in Newfoundland and Labrador, especially when it comes to corporate and union donations to political parties.
The Liberal government has come under fire for accepting large donations from companies such as Corner Brook Pulp and Paper and Canada Fluorspar Inc. while simultaneously negotiating deals for government support.
The Liberal government has promised to strike an all-party committee to study the issue later this year or in the spring of 2018.
Meanwhile, the NDP has called for an end to corporate and union donations, and the Progressive Conservative party has said it’s an idea to seriously consider.
As part of the discussion, the idea of some sort of government subsidy to political parties is frequently raised as a way to offset the loss of revenue from corporate and union donations.
To understand the current cost of corporate and union donations, The Telegram requested the total value of the tax credit in an access to information request.
Between 2002 and 2015, the cost to taxpayers in lost revenue has been quite small, averaging about $33,000 for corporate donations. The Department of Finance was not able to determine how much is claimed by unions specifically.
For the sake of comparison, since 2000, the average cost to taxpayers from the individual political donation tax credit has been about $114,000 per year.
Political science professor Kelly Blidook said it’s a good idea to provide some sort of government support to political parties.
“Political parties are actually a public service,” Blidook said.
“By thinking up policies, by potentially governing, they’re part of our democracy.”
But Blidook said it would be better if the government provided a direct subsidy to political parties as part of reforms, which would eliminate the reliance on corporate and union donations.
The problem with relying on donations, especially from corporations and unions, is that it sets up a situation where political parties appear to be beholden to their donors.
Even relying primarily on individual donations isn’t a perfect solution, Blidook said.
“Because the activists tend to be the most polarized, what you’re getting is political parties that don’t serve the public interest to the same extent that they might if they were simply trying to get the most votes,” Blidook said.