Which financial institution gave them an election loan? For how much? What will their deficit/surplus be after election subsidies are received?
FOR IMMEDIATE RELEASE:
Wednesday, November 6, 2019
OTTAWA – Today, Democracy Watch and the Money in Politics Coalition (made up of 50 groups with a total of more than 3 million members), joined by almost 90,000 voters, called on the media to ask federal party leaders 3 key questions that will very likely effect the timing of the next election:
- Which financial institution gave them a loan to pay their election expenses?
- How much was the loan?
- What will their estimated deficit/surplus be in 4 months after they receive the subsidies the public pays for any candidate or party that wins 10% of the popular vote?
The parties know the details of their loans, and can now make fairly accurate projections, based on the election results and past fundraising patterns for November-January post-election periods, of what their financial position will be mid-February when they receive the post-election subsidies.
The public has a right to know this information, and shouldn’t have to wait and always be guessing the financial position of the parties, especially not in a minority government situation when the finances of each party is a big factor affecting when the next election will happen, given the Liberals, Conservatives, NDP and Bloc (and, possibly the Greens) all some power in making that decision. Unfortunately, due to unwritten rules, the Prime Minister still has the most power, and the ability to abuse that power.
“The public has a right to know which financial institutions bankrolled the parties’ election campaigns, and what the debt levels are of each party, as those are major factors in federal Cabinet ministers’ and MPs’ conflicts of interest concerning banking law decisions, and in the timing of the next election given the minority government,” said Duff Conacher, Co-founder of Democracy Watch and Chairperson of the Money in Politics Coalition. “Hopefully the media will ask the federal party leaders the key questions about the state of their party finances, and they will soon give the public the information they have a right to know.”
“Banks and other financial institutions should not be allowed to loan parties and candidates any more than individuals are allowed to donate, as it creates a real conflict of interest for federal ministers and MPs,” said Conacher. “Instead, any loans should come from a public fund, but only after parties can prove they actually need the money to reach voters and run election campaigns.”
The media hasn’t paid much attention to these key questions, and any coverage is always out of date by six months or more because of weak federal party finance disclosure rules. Looking over the past year, there is only this CBC article about the financial status of most of the main federal parties as of December 31, 2018, and then this follow-up CBC article about the NDP’s finances as of December 31, 2018. This Canadian Press article a couple of months later covered the same figures for 2018.
The CBC then did this article about the parties’ first-quarter fundraising totals, and this iPolitics article summarized the parties’ fundraising totals for 2019 up to June 30, 2019. However, neither of these articles contain any statistics on how much the parties spent up to June 30, 2019, or after.
As a result, no one except the parties knew how much money they had in the bank when the federal election began, nor how big their loans are, from which financial institution(s). Voters have a right to know before they vote who bankrolled each party’s, and each candidate’s, campaign, but this information is still hidden from them by weak disclosure rules.
Many commentators were saying at the beginning of the election that the Conservatives had tons of money for their campaign, the Liberals had an adequate amount of money, the Greens had some money, and that the NDP was in a lot of debt. But all of those comments were inaccurate guesses based on the information in the above articles, none of which took into account what the parties spent since Jan. 1, 2019.
For example, the Conservatives had $9.9 million in the bank at the end of 2018, and raised $16.5 million up June 30, 2019, and may have raised $5 million up to the beginning of the election. However, they may have spent $25 million from January to September 2019, which means they may have actually only had $6.4 million in the bank going into the election.
As a result, if the Conservatives planned to spend the full estimated $28 million allowed (under the election spending limit) on their campaign, they must have had a loan or loans of about $21 million from some financial institution or institutions.
The Liberals had $2.3 million in the bank at the end of 2018, and raised $8.85 million up to June 30, 2019, and may have raised $3.5 million up to the beginning of the election. However, they may have spent $10 million so far in 2019, which means they may have actually only had $4.65 million in the bank going into the election campaign, and likely needed a loan or loans of about $23 million in order to spend the maximum allowed during the election campaign.
The other parties have also likely gone into debt with a loan or loans from a financial institution(s). If any party’s loan(s) come from a bank, the bank is regulated by the federal government under the Bank Act, so the bank will have done a huge favour to the party by lending them millions for their election campaign.
Democracy Watch’s position is that loans to parties should be limited just like donations are, to prevent the conflict of interest created by the big banks lending so much money to the federal parties’ election campaigns. It would be much more democratic if election loans to parties came from a public fund, with the amount each party would be allowed to borrow based on the number of donors and members it has, combined with the average amount it has raised in the previous two years.
Many other changes are needed to make Canada’s political finance system democratic and ethical. See details on Democracy Watch’s Money in Politics Campaign page.
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FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Email: [email protected]
Democracy Watch’s Money in Politics Campaign