Randall Denley: It won’t be easy to wean Ontario parties off generous tax treatment
- Ontario’s political parties, led by Premier Doug Ford’s PC party, are spending lavishly with taxpayer-subsidized donations, including costly events like a $3,000 trip to Jamaica and extravagant dinners.
- Ontario’s political financing system is much more generous than other provinces and federal rules, featuring high donation limits ($5,000 vs. $1,775 federally), the most generous refundable tax credits, and the highest per-vote subsidies.
- Despite campaigning against public funding for parties, Ford made per-vote subsidies permanent, allowing parties to receive millions annually in taxpayer money with little accountability or transparency.
- The article argues Ontario’s dual system of generous tax credits and per-vote subsidies is excessive, lacks proper oversight, and benefits all parties, especially the ruling party, making reform unlikely due to self-interest.
Ontario Premier Doug Ford and his PC party have taken some heat lately for squandering taxpayer-supported political donations, and rightly so. It’s difficult to justify spending $3,000 to snoop on Liberal leader Bonnie Crombie in Jamaica. Then there was the revelation that some cabinet ministers’ riding associations spent thousands of dollars on lavish dinners, and even an axe-throwing event.
The real scandal, though, is the way Ontario political parties enrich themselves at taxpayers’ expense at levels that are out of sync with what’s happening in the rest of the country.
In defending the Jamaica adventure, Ford referred repeatedly to “the party’s money,” but every dollar the party receives is subsidized by the public, whether it’s through a donor tax credit or a per-vote payment.
Ontario has one of the highest political donation limits in the country, the most generous tax treatment for donors, and the highest per-vote subsidy.
Donor contributions to federal parties are limited to $1,775. In Ontario, the limit is $5,000. Ford raised the figure from $3,400 last year. Why do Ontario politicians require so much more money in ridings that are identical to federal ridings?
Ontario’s tax treatment of political donations is also out of step with the federal amounts. The feds cap political donation tax credits at $650 and the amount is non-refundable. Ontario’s tax credit limit is $1,698 and it’s fully refundable. Even if you owe no tax, you still get cash back.
Ontario’s tax credit for political donors is markedly more substantial than any other province. Manitoba and Alberta have $1,000 tax credit limits, but most provinces range from $500 to $650.
Quebec leads the way on keeping tax dollars out of the hands of provincial politicians. It has no political contribution tax credit, limits donations to $100 and pays parties based on donations, to a maximum of $250,000 per party.
At least with tax credits, someone has to donate their own money, even if they do get a good chunk of it back. That’s not the case with Ontario’s pay-per-vote system, the other main source of political funding. It provides automatic quarterly payments to parties based on their performance in the most recent election.
Back in 2018, Ford campaigned against such payments, which had been brought in by the provincial Liberals the previous year. At the time, he said, “I do not believe the government should be taking money from hard-working taxpayers and giving it to political parties. Corporate welfare is wrong, and political party welfare is equally wrong; I will put an end to both.”
Ford’s batting 0 for 2 there, but at least political welfare is cheaper than corporate welfare.
Like many welfare recipients, Ford subsequently found himself dependent on the payments. The idea of free money without doing any work has a certain allure. After years of extending them temporarily, he made the per-vote payments permanent last year.
Attorney General Doug Downey said the per-vote subsidy ensures “a balance of public and private spending in elections.” He must have meant a balance between money coming out of your right and left pockets.
Again, Ontario is out of step with much of the country. The federal government does not give pay-per-vote payments. Only Prince Edward Island, Nova Scotia, New Brunswick and Quebec pay such allowances.
Quebec’s $250,000 per party limit is pocket change compared to what Ontario parties get. This year, the PCs will collect $5.5 million in taxpayers’ money, the Liberals $3.8 million and the NDP almost $2.4 million.
The other provinces with per-vote subsidies all provide significantly less than Ontario does.
Ontario politicians’ unparalleled generosity to political parties ought to come with enhanced accountability. That’s why Ford’s comments about “the party’s money” and his suggestion that reporters should talk to the party are so off base.
Once you accept the public’s money, you lose the right to talk about “the party’s money.” Even if it were the party’s money, Ford is still the leader of the party. That would suggest he’s the person to talk to about how it’s spent, not some party functionary.
One could make a case for per-vote public subsidies or for a system reliant on donors. It’s difficult to argue that both are necessary, especially when the vote subsidy and the political tax credit are so generous.
It would be nice to think that some electable party would stop fleecing taxpayers, but it’s unlikely. They all benefit from the existing rules, and no one benefits more than the party in power, the one that would have to make the change.
As Ford has already demonstrated, a promise to limit politicians’ access to the trough is easily trumped by naked self-interest.
Randall Denley is an Ottawa journalist and author. Contact him at randalldenley1@gmail.com