Allowance Commissioner’s report on Annual Allowances for Manitoba’s Registered Political Parties
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Transcript of Allowance Commissioner’s report on Annual Allowances for Manitoba’s Registered Political Parties
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Manitoba Allowance Commissioners Report Summary
PaulG.Thomas,Ph.D.,O.M.
ProfessorEmeritus,PoliticalStudies
St.JohnsCollege
92DysartRoad Winnipeg,ManitobaR3T2N2
TheHonourableDarylReid
SpeakeroftheLegislativeAssembly
Room244LegislativeBuilding
450Broadway
Winnipeg,ManitobaR3C0V8
February19,2013
DearMr.Speaker:
IhavethehonorofsubmittingtoyoutheReportonAllowancesforManitobasRegistered
Political Parties. This report is submitted pursuant to subsection 81(4) of The Election
FinancingAct.
The applicable legislation states that the Speaker must table a copy of the allowance
commissionersreportonanyofthefirst15daysonwhichtheAssemblyissittingafter the
Speakerreceivesthereport.
Pursuanttosubsection81(5)ofTheElectionFinancingAct,withoutdelayaftersubmitting
thisreporttotheSpeaker,theallowancecommissionermustmakeregulationstoimplement
hisdecisions.
Respectfullyyours,
PaulG.Thomas,Ph.D.,O.M.
Commissioner
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Manitoba Allowance Commissioners Report Summary
Table of Contents
ExecutiveSummary 5
PoliticalPartiesandDemocracy 9
TheManitobaContext 13
TheAppointmentandMandateoftheAllowanceCommissioner 19
TheApproachFollowedbytheAllowanceCommissioner 23
ThePrinciplesandCriteriaUnderlyingAllowances 27
OptionsforDeterminingtheTotalAmountofAllowanceSpending 31
andAllocatingMoneyAmongRegisteredPoliticalParties
CostsofanAllowanceProgramtothePublicTreasury 41
Regulation,EnforcementandCompliance 55
DecisionsandRecommendations 57
SummaryofRecommendations 77
SummaryofDecisions 77
NextSteps 81
Conclusions 83
Appendices 85
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Manitoba Allowance Commissioners Report Summary
Executive Summary
ThisreportarisesoutofTheElectionFinancingAct(EFA)whichwaspassedbytheManitoba
LegislativeAssemblyinJune2012.TheActeliminatedanexistingprogramforthepayment
ofannualallowancestoregisteredpoliticalparties.Italsoprovidedfortheappointmentofan
independentallowancecommissionertodecide,takingintoaccountcertainconsiderations
statedin theAct, the design ofa new allowanceprogram. The commissionerwas to be
appointedbythegovernmentonlyafterconsultationwithotherregisteredparties.
OnNovember15,2012,ProfessorPaulThomaswasappointedascommissionerandgivena
three-monthdeadlinetotablehisreportcontainingdecisionsonthecomponentsofthenew
partyallowanceprogram.
The first section of this report describes the critical role that political parties play in the
Manitoba political system. Once seen as solely private associations, political partiesgraduallycame tobe seenalsoasimportantpublic institutions.A briefhistoricaloverview
showshow this shiftin perspectiveis reflected inthegradualadoptionof laws respecting
partyoperationsandfinancing.
Tworecentchangestopartyfinancelawsprovokedcontroversy.Thefirstwasabanin2001
oncontributionstopoliticalpartiesbyorganizationssuchascorporations,tradeunionsand
non-profit associations. The second was the introduction in 2008 of annual per-vote
allowancespaidtopoliticalpartiesaspartialcompensationfortherevenuelostasresultof
thebanonorganizational donations. Thecontroversy ledManitobas two largestpoliticalpartiestodeclinetheallowancepayments.Allowancepaymentsweremadetothethree
smallerpartiesfrom2008to2011.
Under the EFA, the commissioner was not authorized to resolve the controversy over
whetherthereshouldbeanallowanceprogram.TheActrequiresthatallowancesbepaid.
Norwasthecommissionerauthorizedtomakechangestootherlegislationandregulations
thatgovernthefinancingofpoliticalparties.However,hewasgivenwidelatitudetoidentify
considerationsrelevanttothedesignofanewallowanceprogram.
A second section describes how the commissioner approached his task. The process
involvedpublicconsultationthroughtheuseofawebsite,whichincludedanonlinesurvey
and the useof newspaper notices across the provincewhich askedManitobans for their
opinions.
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In addition, a series of confidential meetings were held with representatives of political
partiesandotherindividualswithknowledgeofthetopic.Finally,researchwasconducted
on the arrangements for financing political parties in other jurisdictions, including a
comparativeanalysisoftheallowanceprogramsinfourotherprovincesandatthenational
levelinCanada.
Thereportdescribesthefollowingprinciplesandcriteriawhichshouldguidethedesignofa
newallowanceprogram:
clarity targeted affordability predictability fairness enforceability accountability
Basedontheseprinciples/criteria,thereportidentifiesanumberofoptionsfordetermining
the totalamountofallowancemoney tobepaid to registeredparties, aswell asseveral
optionsforitsallocation.
Usingthe latitude thathewasgrantedunder theEFA,thecommissioneridentifiedbotha
seriesofbindingdecisionswhichwillserveasthebasisforthenewallowanceprogramand
a smallernumber of recommendations for theManitoba Governmentand theManitoba
LegislativeAssembly to consider for the future.The reportprovides reasons forboth the
decisionsandtherecommendations.
Thekeydecisionsforthenewallowanceprogramwere:
Therewillbeanannualcapof$600,000placedonthetotalamountofallowancefundsavailable.
Allowancespendingwillnotbeindexedtoinflation,butwillbesubjecttoadjustmentbythenextallowancecommissionerappointedafterthenext
provincialelection.
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Manitoba Allowance Commissioners Report Summary
Inaconditionofseverefinancialstress,allowancespendingcanbesuspendedorreducedbythegovernmentthroughabudgetarybill
passedbytheLegislature.
Allowancefundsaretobeusedtodefraytheadministrative,operatingandcompliancecostsofpoliticalpartiesandnotforpartisanpurposesof
politicaladvertisingandpolling.
Thetotalamountofallowancespendingwillbedividedamongtheregisteredpoliticalpartiesbasedontwocalculations:a)acandidate-
basedpaymentof$100percandidateendorsedbythepartyinthemost
recentprovincialelection;andb)afterdeductingall-candidate-based
paymentsfromthetotalfundsavailable,dividingtheremainingfunds
amongthepartiesbasedontheaverageofthetotalvalidvoteseach
obtainedinthetwopreviousgeneralprovincialelections. Forapartycompetingforthefirsttimeinageneralelection,thevote
portionoftheallowancewillbebasedontheportionofvalidvotes
obtainedinthatelection.
Theactualallowancepaymenttoeachpartywillbethelesseroftheincurredadministrative,operatingandcomplianceexpensesoftheparty
andtheallowanceentitlementgeneratedbythetwo-partformula.
ElectionsManitobawillcontinuetooverseetheoperationoftheallowanceprogram.Existingrulesandguidelineswillbeusedtodefinecoreadministrative,operatingandcomplianceexpenses.
AllowancepaymentswillbemadetoregisteredpoliticalpartiesforagivenyearfollowingthefilingofanAnnualFinancialStatementwith
ElectionsManitoba.PartieswillberequiredtoassertintheirStatement
thatallowancefundshavebeenusedonlyforintendedpurposes.
Ifapartywishestodeclinetheirallowance,itcannotifyElectionsManitobainadvanceorreturnthepaymentafterithasbeenissued.
Partiescannotsubsequentlyrequestthatsuchpaymentsbemade.
UndertheEFAthedecisionsmadeinthereportaretobereflectedinregulationsestablished
bythecommissionerandtheprogramwillbemaderetroactivetoJanuary,2012.
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Inthecategoryofrecommendations forfutureconsideration thecommissionermade the
followingtwopoints:
Thereshouldbefurtherstudyoftheoptionofaddingengagementofpartymembersandpolicydevelopmenttotheallowablecategoriesof
spendingundertheallowanceprogram;
IftheaimoftheEFAistocompletelyeliminatetheuseofallowancemoneyforcampaigntypesofexpenses,considerationshouldbegivento
amendingtheActtostatethatallowanceswillnotbeusedtosupport
electionexpenses,aphraseforwhichacomprehensivedefinitionexists.
Thenextstepinimplementingthedecisionsinthisreportisforthecommissionertooversee
thepromulgationofbindingregulationswhichwillbepublishedintheManitobaGazette.
Based on those regulations, Elections Manitoba will make the two-part calculations to
determine the payments to which registered parties are entitled under the new rules.
Paymentswillbemaderetroactiveto2012.
The commissioner hopes that this report will be of educational value in informing
Manitobans about an important topic and that his decisions on the design of the new
allowanceprogramaresoundandfair.Finally,itishopethatthenewallowanceprogram
will help to sustain and enhance the role of political parties as crucial institutions of
democracyinManitoba.
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Manitoba Allowance Commissioners Report Summary
Political Parties and Democracy
Nearlyeveryoneagreesthatahealthyandvibrantdemocracycannotoperateinterritorially
large,economically specializedand socially diversesocietieswithout organized, cohesive,
responsible and effective political parties that are able to provide linkages and active
representationbetweencitizensandgovernments.Mostpeoplealsoagreethatpartiesneed
money and other resources in order to perform various important functions within the
electoralandthegoverningprocesses.Therealissuesthatariseperiodicallyarerelatedto
howpartiesobtainandspendthemoneytheyneedtobeeffective.
Inmostwesterndemocraciesoverthepreviouscenturypoliticalpartiesreliedexclusivelyor
mainly on private sources of funding. There was only limited state regulation of their
activities.Underthesearrangementstherewererealandperceivedrisksthatmajorfinancial
contributors would gain unfair access to public officials, both elected politicians and
appointedpublicservants,andwouldtherebyachievedisproportionate,undueinfluencein
theelectoralandthegoverningprocesses.Inallwesternpoliticalsystems,thisconcernled
graduallytomorelegislationandrelatedregulationswhichsoughttocontroltheraisingand
spending of money by political parties, as well as to the introduction of various forms of
public funding tosupportcertainof theiractivities. Italso led to the insistenceongreater
transparencyabouthowpartiesraisedandspentthemoneytheyobtainedfromprivateand
publicsources.
InCanada,thereformprocess,whichwasintendedtoensureintegrityintheelectoraland
governingprocesses,gainedmomentum from themid 1960sonward. Thenew laws and
regulations sought tobalance the freedomof individualsandorganizations toengage in
variousformsofpoliticalactivitywiththeneedtopromotefairnessintermsofrelativelyequal
accesstotheelectoralandgoverningprocessesfordifferentorganizationsandindividuals,
aswellashonestyandaccountabilityinthoseprocesses.
Topreserve theprinciples ofpoliticalequalitypresumed by the representationandvoting
systems, gradually the national government andmost provincial governments introduced
legal limits on how muchmoney could be donated by organizations and individuals to
partiesandtocandidates.Therewerealsorequirementsforthedisclosureofcontributionsabove a certain amount so that citizens could be aware of which organizations and
individualswereseekingtoinfluencetheelectoralandthegoverningprocesses.
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Alsointroducedweretaxcreditsforcontributionstopartiesandcandidatesasameansto
promotecitizeninvolvement,toprovidethepartieswithabroaderbaseoffinancialsupport
andtoreducetheirdependenceonmajorcontributorslikewealthyindividuals,corporations
andtradeunions.
Thereformstotheelectionfinancinglaws,whichbeganinQuebecinthe1960s,werealso
theresultofagrowinginsistenceonmoredirectcitizeninvolvementinthepoliticalprocess.
Atthetimetherewasearlyevidenceofdecliningpublictrustandconfidenceinpoliticians
andpoliticalinstitutionslikepoliticalparties.Withsomenotableexceptions,thisdownward
spiralof trusthascontinuedtothepresentday.Thecausesof thepublicsdisillusionment
with the political process are too numerous to be analyzed here. However, scandals
involving politics and money were one factor that contributed to the rise of a more
suspicious, even cynical, climate inwhich politicians and political parties were seen by
manycitizenstobeself-interestedandself-servingintheirbehaviour.
Rightlyorwrongly,Canadiansdonotholdpartiesandpoliticiansinashighpublicesteemas
theydidinthefirsthalfofthe20thcentury.Somewhatparadoxically,opinionpollsindicate
thatmost Canadians still accept that responsibleandresponsive politiciansandpolitical
partiesare essential to a healthydemocracy. They also accept that parties and elected
representativesneedmoneyandotherresourcestodotheirwork.However,thequestions
ofhowmuchmoneypartiesneed,howtheyobtainitandhowtheyspendithavebecome
contentioustopicsinCanadaandinmanyotherwesterndemocracies.
Another trend which provides the wider context for this report involves the state ofgovernmentfinances.Comparedtoearlierdecadesthereisstrongerperceptionofscarcity
in the publicsectorand thereseems tobemore resistance topayinghigher taxes.As a
result, governments everywhere are facing serious financial challenges in terms of
balancingtheirbudgetswhilestilltryingtoaccommodatenumerousdemandsonthepublic
purse.Inthesecircumstances,criticshavecometoquestiontheneedforpublicfundingof
parties.
Thereisalsotheconcernthatwehaveenteredaneraofthepermanentelectioncampaign
in which the activities and techniques used to win elections are being applied to theprocessesofgoverningandofoppositionwithinlegislatures.Opinionpollsindicatethatthe
publicresentsseeingtheirscarcetaxdollarsspentonsuchcampaignrelatedactivitiesas
pollingandnegativeadvertising,especiallyoutsideoftheofficialcampaignperiod.
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Manitoba Allowance Commissioners Report Summary
Inshort,publicdisillusionmentwithaspectsofthepoliticalprocesscombinedwiththeneed
for financial prudence in the public sector have provoked debates inCanada and other
countriesovertheappropriatebalancebetweenprivateandpublicsourcesof fundingfor
political parties. The Manitoba political system has not escaped these controversies. In
saying this, one must quickly note that the problems and scandals involving money inManitobapoliticallifehaveneverbeenasseriousasinsomeotherCanadianjurisdictions,in
theUnitedKingdomandespeciallyintheU.S.A.
ThenextsectionexaminesbrieflythehistoricalandrecentdevelopmentsinManitobawhich
provides the context for the passage by the Manitoba Legislative Assembly of a statute
providingfor theappointmentofanallowancecommissionerwho istodecidehowmuch
public money will be spent on allowances, which activities will be supported by the
allowances,howthemoneywill beallocated among thepartiesandwhat accountability
requirements will be attached to the receipt of such financial support from the public
treasury.
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Manitoba Allowance Commissioners Report Summary
The Manitoba Context
UndermodernconditionsManitobassystemofcabinet -parliamentarygovernmenthasbecome
inmany respects party government. The system presumes strong and responsible political
partiesandhelpstopromotetheirexistence.Partiesperformanumberofessentialfunctionsin
the system. In the most general terms, parties help to link society to government, provide
alternative ideas forpublicpolicy, help to informand shapepublic opinion, act to represent
different values/interests within the policy process, provide a vehicle for citizens to become
involvedinthepoliticalprocess,andhelptorecruitandelectleaderstopublicoffices.
Inmoreconcreteterms,partiesarecentraltotheperformanceoftherolesofgovernment
and opposition. It is the governing party which takes most of the initiative in terms of
legislation and spending. Normally governments are not forced to compromise with the
opposition parties in order to have their legislation and spending approved by the
Legislature. However,with that authority andcontrolcomes accountability in the form ofpoliticalcreditorblameforboththeactionsandinactionsofgovernment.
Meanwhile, other political parties perform the crucial role of responsible opposition,
challengingthegovernment,bothin thelegislatureandoutside,on anongoingbasis. For
thispurposethereisseparaterecognitionandsupportinstatutes,parliamentaryrulesand
thebudgetsoftheLegislativeAssemblyfortheroleofanOfficialOppositionandoftenfor
other opposition parties. In their challenge role, opposition parties help to inform, shape,
reflect and mobilize critical opinions and alternative ideas about the substance and the
processes of policy formulation. In this way, opposition parties represent an alternativegovernment in waiting and thereby allow, after fair and free elections, for the peaceful
transitioninpoweramongrivalpoliticalorganizationsseekingamandatefromthepublic.
Like other Canadian jurisdictions, Manitoba gradually came to recognize the central
importanceofpoliticalpartiestoahealthydemocracythroughthepassageofvariouslaws
andtheprovisionof different formsofdirectandindirectstate financialsupporttoparties.
This report is concerned principally with the implementation of the concept of annual
allowancestoeligibleregisteredpoliticalparties.Itisnotnecessary,therefore,topresenta
detailed history of the legal and financial components of Manitobas system for the
regulation of and support for parties, including the legal and administrative provisions
governingtheirfinancialaffairs.However,abriefoverviewofthatsystemisneededinorder
toplaceinanhistoricalcontexttheestablishmentofthepositionofallowancecommissioner
andtheissueswhichhewasaskedtodecide.
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From1870whentheprovincewascreatedtothepresent,Manitobaselectorallawreflected
thematuringoftheprovincesdemocracy.Onlythehighlightsofthehistoricalevolutionof
provincialelectorallawswillbepresentedhereinordertodemonstratethepointthatour
understandingofthelegalandfinancialrequirementsforanopen,accessible,fair,honest
andhealthydemocraticprocesshavechangedovertime.
Originally, under theManitobaElection Act, onlymales owning propertywereeligible to
vote.In1888thepropertyqualificationwaseliminatedandthesecretballotwasintroduced
forthefirst time.Anothermilestonewasreachedin1916whenManitobabecamethefirst
provincetoallowwomentovote.
Over the years there were changes to the lawsestablishing the number of seats in the
Legislative Assembly and the type of ballots (simple plurality versus proportional
representation)usedtoelectMembersoftheLegislativeAssembly(MLA).In1957Manitoba
wasthe first province toestablish an independentboundariescommission to review the
boundaries of constituencies based onpopulation changes. In 1969 the votingagewas
loweredto18from21.
Amajorsetofchangestoelectorallawweremadein1980.Anindependentofficeofthe
LegislativeAssembly,theOfficeoftheChiefElectoralOfficer,wasestablishedtoensurefair
and free elections. The Elections Finances Act was brought into force. It introduced
advertising spending limits for parties and candidates, an income tax credit system for
politicalcontributionstoregisteredpoliticalpartiesandarequirementforthedisclosureof
thenamesof contributorsandtheamountsof contributionsabovea specifiedamount. In1985,spendinglimitsexpandedtoincludeallexpenses,notjustadvertisingandthepartial
reimbursementofdocumentedexpensesofpartiesandcandidatesbegantotakeplace.
Thenextmajorroundofelectionlawreformoccurredin1988.Intermsofthethemesofthis
report,theimportantchangestoTheElectionsActwereastrengtheningoftheinvestigative
powersoftheChiefElectoralOfficerandanincreaseinthepenaltiesforelectionoffences.
With respect to The Elections FinancesAct, therewas a clarification of the definition of
election expenses, aneliminationof thespending limitson advertising, stronger rules on
disclosureforcontributionstopartiesandcandidatesandgreatercompliance/enforcementpowersforElectionsManitoba.
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Manitoba Allowance Commissioners Report Summary
In 2000, The Elections Finances Act was amended to ban political donations from
corporations,tradeunions,non-profitorganizationsandindividualsnormallynotresidentin
the province. That is to say, contributions could only be made by individuals normally
resident in theprovince.Theamendmentsalso imposeda ceilingof $3,000 ondonations
annually from individuals, placed a limit of $5,000 on third party advertising during acampaignperiod(thisprovisionisyettobeproclaimedintolaw)andputaceilingof$50,000
peryearonpartyadvertisingduringnon-electionyears.Theseprovisionsweretotakeeffect
on January 1, 2001. Donations from organizations like corporations and unions were
previously eligible for political contribution tax credits so the ban on such contributions
representedasavingtothetreasuryintermsoftherevenuepreviouslydeductedfromtaxes
payablebythoseorganizations.
In2008,aseriesofamendmentsto TheElectionsActandtoTheElections FinancesAct
were passed by the Legislature. In summary terms, the amendments introduced the
followingchanges:
Theadoptionoffixeddateelections; Abanongovernmentadvertising90daysbeforethefixedelectiondate; Theintroductionofannualallowancestopoliticalpartiesbasedonvotes
obtainedinthepreviousgeneralelection(detailsbelow);
Theadoptionofannualadvertisinglimitsoutsideoftheelectionperiodintheyearofafixeddateelection.Limitsweresetat$250,000forparties
and$6,000forcandidates;
Theexistingannualadvertisinglimitforpartiesof$50,000waseliminated.Aspartofthelegislativedebateovertheabovechangesto TheElections
ActandTheElectionsFinancesAct,therewascontroversyandactionon
anumberofrelated,non-statutorymatters:
AnincreaseintheexistingceilingonpartycaucusandindividualMemberoftheLegislature(MLA)advertisinginnon-electionyears;
Arequirementthatpartycaucusesfileannualreportsforthefinancialallowancestheyreceiveforresearchandotheractivities;and
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Theadoptionofguidelines,approvedonaconsensusbasisintheLegislativeAssemblyManagementCommittee,respectingaprohibition
ontheuseofcaucusandMLAallowancesfornarrowlypartisan
communicationspurposes.
This historicaloverview of thechanges toManitobaselection laws hasnecessarily been
selective.MoredetailedinformationcanbefoundonthewebsiteforElectionsManitobaat
www.elections.mb.ca.WhileElectionsManitobaisthesourceformostoftheinformation
presented above, I hasten to add that it is not responsible for the selection of the
developments highlighted or for any interpretation of the significance of those
developments.
Insummary,between1870and2008,Manitobamoved towards recognitionof thepivotal
role ofpoliticalpartiesin the developmentandconsolidation ofdemocracy.Therewas a
cleartrendtowardrecognitionthatpartieswerebothprivate,voluntaryassociations,aswell
aspublicinstitutionsthatservedsociety.Inresponsetochangingconceptsofdemocratic
participationandto fearsof corruptiontherewasaslowbutsteadytrendtowardsgreater
regulationofcertainactivitiesofpoliticalparties.
Anothertrendwastheprovisionof variousformsof financialandnon-financialsupport to
politicalparties inboth theircampaignandnon-campaignactivities, includingsupportfor
theirrolesinthelegislativeprocessthroughmechanismssuchasacabinetlevelsalaryto
the leader of theofficial opposition, allowances toMLAs to runconstituency officesand
funds forcaucusresearch bureaus. The result today is thatManitoba, likemanywesterndemocracies,hasamixedpublicandprivatesystemforoperating,regulating,financingand
supportingpoliticalparties.
Among thedeclared aims of the reformsadoptedover theyearswere: increasedcitizen
participation,fairness,integrity,transparencyandaccountability.AttimesManitobaled,and
on other occasions followed, other Canadian and non-Canadian political systems in
adoptingreformsintendedtostrengthendemocracy.
By2008,Manitobassystemforregulatingandsupportingpoliticalpartieshadallormostof
thecomponentsfoundatthenationallevelandinmanyotherprovinces.Ingeneralterms
themaincomponentsare:
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Manitoba Allowance Commissioners Report Summary
Spendinglimitsforpartiesandcandidates,includinglimitsonadvertisingforpartiesandcandidates;
Annualcontributionlimitswhichplaceaceilingondonationstoparties,candidates,constituencyassociationsandleadershipcontestantsand
allowonlyindividualsresidentintheprovincetocontribute;
Transparencybasedonpublicreportingofthenamesofallcontributorsover$250.00,includingtoleadershipcontestants,andpublicreportingon
party,candidate,constituencyassociationsandleadershipcontestant
expenses;
Publicfundingintheformofapoliticalcontributiontaxcredit(onaslidingscalebasedontheamount),electionexpensereimbursementsforparties
andcandidates(basedonmeetingalowminimumthresholdofvotes
obtained),auditsubsidiesandannualallowancespaidtoregisteredpoliticalparties(detailstobefoundbelow).
Acommissionerofelectionsexiststoinvestigateoffencesunder TheElectionsActandTheElectionsFinancesAct.
TheregisteredpartieshavealsoagreedtoabidebyaSharedCodeofEthicalConduct,whichwasdevelopedonaconsensusbasiswiththe
assistanceofElectionsManitobaandinvolvesself-regulationbyeachparty.
In most instances, the components in this framework of laws, related regulations and
administrative policies have been developed and adopted on the basis of all-party
consultationsandthesearchforconsensus.Somechangeshavebeenmorecontroversial
than others and governments of different partisan backgrounds have at times found it
necessarytoactwithoutall-partyagreement.Thisbringsustooriginsofthecurrentprocess
to design and implement a new allowance program of financial support to Manitobas
registeredpoliticalparties.
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Manitoba Allowance Commissioners Report Summary
The Appointment and Mandate of the Allowance Commissioner
Thecurrentprocesstoestablishanewprogramofpartyallowancesaroseoutacontroversy
whichtookplaceinsidetheManitobaLegislatureandwithinManitobasocietyatlargeover
the2001banondonationstopoliticalpartiesandcandidatesbycorporations,tradeunions
andnon-profitorganizationsandthesubsequentintroductionin2008ofannualallowances
tobepaidtoregisteredparties.
This is not the place to review that controversy in detail. In this instance, there was a
principledpublicpolicydisagreement betweenthe governingpartyandofficial opposition
thatcouldnotberesolvedthroughlegislativedebateandinter-partynegotiations.Thebills
creating thebanonorganizationalcontributions topartiesandsubstitutingallowancesas
partial compensation for money lost by the parties as a result of the ban were both
introducedbyNewDemocraticPartygovernments.Astheofficialopposition,theProgressive
Conservatives voted against the bills andrefused toaccept the allowances.After internal
debate the New Democratic Party also declined the allowances. The result was that
between2009and2011,theonlyeligiblepartiestoaccepttheallowancesweretheLiberal
Party of Manitoba, the Green Party of Manitoba and the Communist Party of Canada -
Manitoba.
Underthepreviousprogram,theamountoftheallowancepayabletoaparticularpartywas
basedonthenumberofvotesobtainedbythatpartyinthemostrecentgeneralelection,up
to an annual ceiling of $250,000.00 or the total annual administrative expenses incurred,
whicheverwasthe smalleramount. Therewasalso provision foraminimumpaymentof
$10,000whenapartyelectedatleastonemembertotheLegislature.Finally,apartythat
failedtoelectamember,regardlessofhowfewvotesitobtained,wasentitledtoaminimum
paymentof$600.Table1presentstheallowanceentitlementsunderthepreviousallowance
programwhichwerebasedontheresultsofthe2007generalelection.
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Table 1:
Annual Allowance Payments Based on Valid Votes Received in the 2007 General Election
Political
Party
Total Valid
Votes Cast
Valid Votes
Received
by Party
Percent of
Total Valid
Votes
Rate Amount per
Valid Vote
Allowance
Amount
NDP 418,390 200,834 48.00% $1.25 $251,042.50 $250,000.00
PC 418,390 158,511 37.89% $1.25 $198,138.75 $198,138.75
Liberal 418,390 51,857 12.39% $1.25 $64,821.25 $64,821.25
Green 418,390 5,586 1.34% $1.25 $6,982.50 $6,982.50
CPC 418,390 367 0.09% $1.25 $458.75 $600.00
Total 418,390 417,155 $521,443.75 $520,542.50
Becausethegoverningpartyandofficialoppositionpartyrefused allowances, thecostto
thepublictreasuryofthepreviousprogramwasmuchlessthanoriginallyforecast.Thecost
ofthatprogramwasdeterminedbyanumberoffactors:thetotalnumberofvotesthatwere
cast,thedocumentedadministrativeexpensesthatwereincurredbytheparties,thenumber
ofpartieswhichelectedoneormoreMLAsandqualifiedforupto$10,000,andthenumber
of parties which elected no members but qualified for a minimum allowance of $600.Furthercommentsonthepreviousallowanceprogramarepresentedlaterinthisreport.
The experience since 2008 with the previous allowance program led the current
GovernmentofManitobatoincludeinBill33,introducedintheLegislatureonMay17,2012,
asectiondealingwiththeappointmentofanindependentallowancecommissionerwhois
grantedtheauthoritytodesignanewprogramofpartyallowances.TheBillreceivedRoyal
AssentonJune14,2012.
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Manitoba Allowance Commissioners Report Summary
However,notallsectionsoftheBillwereproclaimedatthetime.Part11,dealingwiththe
appointmentandworkof theallowancecommissioner,came into forceonJune14,2012.
AppendixAcontainsacopyofPart11ofthenewElectionFinancingAct.(Boththeformer
ElectionsFinancesActandPart11ofTheElectionFinancingActarecurrentlyinforceand
referencestothetwodifferentpiecesoflegislation,whileconfusing,isintentional).AccordingtoSection80(2)ofTheElectionFinancingActthegovernmentistoappointanindividualto
serveasallowancecommissioneronlyafterconsultationwiththeleadersoftheregistered
politicalparties.
On September 14, 2012 the Government of Manitoba announced that it had selected
Professor William Neville as the provinces first allowance commissioner. Subsequently
ProfessorNevillewasforcedtowithdrawfromtheroleforpersonalreasons.OnNovember
15,2012ProfessorPaulThomaswasappointedashisreplacement.
The Act provides that the commissioner must submit his report to the Speaker of the
LegislativeAssemblywithinthreemonthsofthedateofhisappointment,whichmeansthatit
isdueon February15,2013. There isprovision intheAct thattheSpeakermaygrant an
extensionifthecommissionerrequestsextratimetocompletehiswork.TheSpeakermust
tablethereportintheManitobaLegislativeAssemblyonanyofthefirst15daysonwhichthe
AssemblyissittingaftertheSpeakerreceivesthereport.
Without delay after submitting his report, the commissioner must make regulations to
implementhisreport.Theregulationsofthecommissionercomeintoeffectretroactivelyto
January1,2012.
Itiscriticaltonotethatthedecisionsoftheallowancecommissionerarefinal.Theyarenot
subjecttoreviewandmodificationbythegovernmentortheLegislativeAssembly.
AccordingtoSection81oftheAct,thecommissionerisgivenauthoritytodecideanumber
ofmattersrelatedtothedesignofareplacementprogramofpartyallowances.Itisimportant
to note, however, that the Commissioner is not free to settle the policy disagreement
between the governingpartyandthe official oppositionpartyover whetheror not annual
allowancesshouldbepaid.Theprinciplethattherewillbeallowanceshasbeenestablished
intheAct.Thismeansthatthecommissionerisrestrictedonlytosuchissuesasthetotal
amounttobepaid,whattypesofpartyactivitieswillbesupportedbytheallowanceprogram,
how the available funds will be divided among the eligible political parties and what
accountabilityrequirementswillbeattachedtothereceiptofallowances
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InmorespecifictermsSection81(1) statesthat:Theallowancecommissionermustdecide
thefollowing:
theamountstobepaidtoregisteredpartiesasanallowance,orhowthoseamountsaretobedetermined,
whentheallowanceistobepaid,andwhetheritistobepaidonceeachyearorininstallments,
whethertheallowanceistobeadjustedforchangesinthecostoflivingorforanyotherreasonand,ifso,whenandhow,
anyrelatedmattertheallowancecommissionerconsidersnecessaryordesirable.
Thelastclausegrantsthecommissionerconsiderablelatitudeanddiscretionindetermining
arangeofpotentialcomponentsofanewallowanceprogram.
Section 81(2) states that: In deciding the amounts of an allowance, the allowance
commissionermayconsideranyfactorsthecommissionerconsidersrelevant ,includingthe
following:
theexpensesthatpartiesincurforadministrativeandoperatingcosts(otherthanforadvertisingandpolling),includingthecostsofcomplying
withthisAct,
howmuchpublicsupportaregisteredpartyhas,asdeterminedbythenumberofvotesthepartyreceivedinthelastgeneralelection,the
numberofseatsheld,thenumberofcandidatesendorsedinthelast
generalelection,oranyotherfactororcombinationoffactorsthe
commissionerconsidersappropriate.
The clause is clearly permissive and grants the commissioner significant flexibility in
determining the factors to be considered when designing the allowance program. The
clausereadsthathemay-notshall-considerthetwofactorsmentionedexplicitlyandmay
consideranyotherfactororcombinationoffactorsthathedeemstoberelevant.
Similarly,Section81(3)oftheActispermissive(ratherthanprescriptive)inallowing,butnot
requiring, the Commissioner to consult with interested individuals and groups before
makinghisdecision.
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Manitoba Allowance Commissioners Report Summary
The Approach Followed by the Allowance Commissioner
AsManitobasfirstallowancecommissioner-andthefirstsuchpositiontobecreatedinthe
country - Iwas conscious of theneed toadopt anapproach that was clear, transparent,
principled, based on evidence and open to participation by interested individuals and
organizations.Thefactthatthecommissionerisgrantedauthoritytomakeactualdecisions
as opposed to simply presenting recommendations for action reinforces the need for a
sound, fair,open andaccountable process. Thecommissionersdecisionswillinvolvethe
expenditureofpublicfundsandtheregulationofthebehaviourofpoliticalparties,matters
which have already proven to be contentious. This is another reason for a careful and
balancedapproach.
Whileacceptingthatthereareboundtobecriticismsofmyfinaldecisions,Ihavesoughtto
obtainasmuchrelevantinformation,knowledgeandopinionthatitwaspossibletogather
over the course of a relatively short three month assignment. The Act provides for the
appointmentofanothercommissionerafterthenextgeneralelection(whichwilltakeplace
inOctober2015orApril2016)andthatindividualwillhavetheopportunitytoreviewboththe
processandtheproductofmywork.
MyfirststepwastoenlistthesupportofMr.LorneGibson,formerChiefElectoralOfficerin
AlbertaandbeforethatDeputyChiefElectoralOfficerinManitoba.Mr.Gibsonbringsbotha
strongacademicbackgroundaswellasdetailedknowledgeofthepracticalitiesofelectoral
lawbasedupondecadesofworkinginthefield.HiringMr.Gibsontoassistmeintermsof
logisticsandresearchdidnot addsignificantly to thecostof thestudybecause itmeant
fewerpaidhoursforthecommissioner.Moreimportantlyheaddeddepthofknowledgeand
contactsinthefieldthatprovedtobeinvaluableinhelpingthecommissionertounderstand
theissues,thepotentialoptionsavailableandthechallengesofimplementingthedecisions
containedinthisreport.
ThesecondstepwastomeetwithFredBryans,theExecutiveDirectorofAdministrationof
theManitoba Legislative Assembly, and Deborah Campbell, the Director of Finance and
AdministrationoftheManitobaLegislativeAssembly,todiscussaworkplanandbudgetfor
theallowancecommissioner,aswellasthelogisticsforcreatingadvertisingandawebsitefor the process of consulting Manitobans. The office of the Executive Director had the
experience of assisting on several occasions the work of the independent commissioner
whosetsalaries,benefitsandretirementbenefitsforMLAs,sotheadviceprovidedwasvery
practicalandhelpful.
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Thethirdstepwastoconductanhour-longinterviewwithMr.MichaelD.Werierwhohad
served on two occasions as the commissioner on salaries, allowances and retirement
benefits forMLAs, a task somewhat similar to thepresentassignment. BothMr.Weriers
report(September,2012)andhisadviceprovidedintheinterviewwasthoughtfulandvery
helpfulintermsofthelogisticsofconductingsuchastudyandidentifyingfactorswhichmight be relevant to determining the amounts ofpublic money to be spentonpolitical
parties.
ThefourthstepwastomeetwithElectionsManitobainthepersonsofShipraVerma,Deputy
ChiefElectoralOfficerandTracyNylen,ManagerofElectionsFinances. These individuals
offeredprofessionalsupportforthisstudybasedonyearsofexperienceadministering The
ElectionsActandTheElectionsFinancesAct.Theyprovidedthecommissionerwithfactual
backgroundinformationontheelectionlawpracticeswithinManitobaandotherCanadian
jurisdictions. The commissioner also made extensive use of the data on party financing,
including data on the previous allowance program, which can be found on Elections
Manitobaswebsite.Thisdataiscitedatseveralpointsthroughoutthereport.Theaccuracy
and interpretationof the material obtained throughElections Manitoba is, of course, the
responsibilityofthecommissioner.
Thefifthstepwastodesignanewspaperadvertisementinvitinginterestedindividualsand
organizations to submit their views on the design of a new party allowance program.
BeginningDecember 8,2012advertisements appeared in the followingdaily andweekly
newspapersandpublications:
WinnipegFreePress BrandonSun WinnipegSun MetroNews FirstPerspectiveWebsite PortageDailyGraphic SwanRiverStar&Times LaLiberte
CanstarWeeklies ThompsonCitizen FlinFlonReminder ThePasOpasquiaTimes SteinbachCarillonNews ThompsonNickelBeltNews GrassrootsNews SnowLakeUndergroundPress
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Manitoba Allowance Commissioners Report Summary
The advertisement drew to the attention of readers a website for the allowance
commissioner (www.allowancecommissionermb.ca) where thelegislation establishing the
positionandtheroleofthecommissionerwerepresented.
Thewebsitealsosolicited inputfromManitobans.Tofocusandguidesuchsubmissionsa
series of questions were posed, including an open ended invitation to provide any
informationandopinionsthatindividualsandorganizationsdeemedrelevanttotheworkof
thecommissioner. Thewebsiteoffered theopportunity for visitors to complete an online
survey.ResultsofthatsurveycanbefoundinAppendixBofthisreport.
Asa sixth step, on November24, 2012, the commissionerwrote to the leaders ofall the
registered political parties asking if they would like to meet with him to receive an
explanationofhowhewasapproachinghismandateandtoreceiveanyinput theywould
caretoprovide.
Theywerealsoaskedtodesignateanyotherpartyofficialsthatthecommissionershould
contacttoreceiveadditionalinformationandadvice.Thisinvitationresultedinface-to-face,
confidential meetings with representatives of three political parties - theGreen Party, the
LiberalPartyofManitobaandtheNewDemocraticParty -allofwhomalsomadewritten
submissionstothecommissioner.TheCommunistPartyofCanadaManitobaalsomadea
writtensubmission.
As a seventh step, the commissioner spoke with four individuals who had specialized
knowledgeofpartyfinancingissuesbasedonpastinvolvementwithaparty,havingmade
submissionsonthetopictoothercommitteesoracademicstudyoftheissues.
Aeighthstepwastoconductresearchon thearrangementsforpartyfinancinginCanada
andinothercountries,withaparticularfocusonthetypesofallowancesorsubsidiespaidto
politicalparties.Fortunatelythecommissionerhadconductedpreviousresearchonthetopic
sothatreducedtheamountofworkandtimeinvolved.Attherequestofthecommissioner,
Mr.LorneGibsonpreparedacomparativesummaryofthemainfeaturesoftheallowance
programs at the national level and in the five Canadian provinceswhere such programs
exist.ThiscomparativesummarycanbefoundinAppendixCofthereport.
Astheabovedescriptionoftheworkplanmakesclear,thecommissionerhadvaluablehelp
intermsofadviceandsupporttocompletehisreportwithinthethree-monthdeadlinehe
wasgiven.
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Hewishes to thank sincerely the interestedManitobans who replied to his invitation for
input.Hewantstothanktherepresentativesofthepoliticalpartieswhoagreedtomeetwith
himand toprovidecandidinsightsintothe operationsand financingoftheirpartyaffairs.
ThepublicofficialsworkingforElectionsManitoba,theManitobaLegislativeAssemblyand
in the election agencies in the other jurisdictionsapproachedby thecommissionerweremostresponsiveandhelpfultoourrequestsforinformationandsupport.Mr.LorneGibson
provided superb research and logistical support, and most importantly provided crucial
adviceandacriticalreviewofthereportasitwasbeingdrafted.Theaccuracyandqualityof
thereportwereenhancedbyalltheseformsofassistance.Ofcourse,anyerrors,omissions
ormisjudgmentsaretheresponsibilityofthecommissioner.
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Manitoba Allowance Commissioners Report Summary
The Principles and Criteria Underlying Allowances
A number of principles and criteria underlie and have shaped the design of the allowance
program.Thesedesignprinciplesandcriteriaaredescribedhereandlaterinthisreporttheyare
linkedtothemoreconcrete,detailedcomponentsofthenewallowanceprogram.Thefollowing
principlesandcriteriashouldbereflectedandreinforcedbythenewallowanceprogram:
Clarity-Therationaleforsettingthetotalcostoftheallowanceprogramandtheformulaforallocatingallowancesamongtheregisteredpolitical
partieswhichqualifyforfinancialsupportshouldbeasunambiguousand
easilyunderstoodaspossible.
Targeted-Allowancesshouldbetargetedtoprovidepublicfinancialsupportonlyfordesignatedactivitiesbyeligibleregisteredpoliticalparties.
Thefocusofpublicfundingshouldberestrictedtoactivitiesarisingoutof
statutoryobligationsimposedonpartiesand/ortoactivitieswhichare
strictlyoperationalandadministrativefunctionsinvolvedwithmaintaining
viablepartiesduringnon-electionyears.Activitiesdirectlyrelatedtoparty
competitionandcampaigningshouldnotbesupportedbytheallowances.
Affordability-Foranumberofreasonsallowancesshouldberelativelymodestinamount.First,governmentshavemorepressingfinancial
obligationsandthepublicinsistsonprudenceinpublicspending.Second,
modestallowanceswillreducethelikelihoodofdependencyonpublic
fundingandwillpreserveastrongincentiveforpartiestoraisemostoftheirrevenuesfromprivatesources.Third,modestallowancestargetedto
designatedadministrativepurposeswilllimittheriskofsuchfundsbeing
usedforpartisancampaign-typeactivities,suchaspollingandadvertising,
whicharespecificallyprohibitedbytheAct.Finally,limitedpublicfundingwill
havemoreacceptanceandlegitimacyintheeyesoftaxpayersandvoters.
Predictability-Anallowanceprogram,perhapswithaceilingonannualamountspayabletoeligibleregisteredparties,shouldinvolveameasure
ofbudgetarypredictabilityandsustainabilityoverthefour-yearperiod
betweenfixeddateelections.Inthiswaythegovernmentwillknowits
financialobligationswithsomecertaintyandpoliticalpartiescancounton
acertainleveloffundingtosupporttheircoreoperationaland
administrativeactivities.
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Fairness-Theallowanceprogramshouldbefairtoallregisteredpoliticalpartiesthatqualifytoreceiveallowances.Itshouldcontributetothe
capacityofallpartiestoperformeffectivelytheirfunctionsofshapingand
representingpublicopinion,aswellasperformingtheirlegislativerolesof
governmentandopposition.Fairnessinvolvesarequirementforclear,objectivecriteriatodeterminethetotalamountsspentunderthe
allowanceprogramandtodeterminetheallocationsamongtheparties.
Theformulausedtomakesuchcalculationsshouldbeflexibleenoughto
recognizethedifferenthistories,organizationalstructuresandfinancing
arrangementsforthedifferentparties.Forexample,theprincipleof
fairnessmightimplythataminimumorbaseamountofmoneyshouldbe
providedtonewerand/orsmallerpoliticalpartiessothattheallowance
systemdoesnotpreservethestatusquointermsofpartycompetitionin
theprovince.
Accountability-Politicalpartiesshouldbeheldstrictlyaccountableforthepublicmoneytheyreceiveintheformofpartyallowances.Theyshould
committobeingscrupulousandhonestintheuseofallowancesonlyfor
thedesignatedeligiblepurposes.Uptoapoint,reliancecanbeplacedon
thepartiestoexerciserestraintandself-regulationintheexpenditureof
publicmoney,butinthepresentpoliticalclimateofsuspicionthepublic
willinsistonmechanismsfortransparency,publicreportingandauditing
ofspendingundertheallowanceprogram.Also,insupportof
accountabilitytherecanbeaninsistencethatallowancesbepaidonlyfor
incurredanddemonstratedexpenses.
Enforceability-Theallowanceprogramshouldbesupportedbyclearregulationsand/oradministrativeprocedureswithidentifiedsanctionsfor
breachesofthoseaccountabilityrequirements.Theregulationsand
sanctionsshouldbeproportionatetotheabusestheyaremeantto
preventandshouldnotimposeanexcessiveregulatoryburdenon
politicalpartiesthatwouldaddtotheircompliancecosts.
Inmostinstancestheseprinciplesandvaluesarecomplementaryandmutuallyreinforcing,
butthereisthepotentialforconflictsandtheneedfortrade-offsbetweenandamongthem.
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Manitoba Allowance Commissioners Report Summary
For example, in the pursuit of fairness, an allowance program could use an allocation
formulabasedononefactor(forexample,votesobtainedatthelastgeneralelection)ora
combinationof factors (forexample,votes obtained, seats obtained, the number of party
members,theamountofmoneyraisedfromprivatesourcesetc.).Addingmorefactorsmay
increase thefairnessin termsofprovidingfinancialsupporttonew, fledglingpartiesbutacomplicated formula could reduce the clarity, understandability and predictability of the
allowanceprogram.
InmakingdecisionsonthedesignoftheallowanceprogramIhavesoughttobalanceallthe
aboveconsiderations,but there isadmittedlyan elementof subjective judgmentinvolved
with deciding how the principles/criteria will interact with one another in practice. The
fundamental challenge as I see it is how to achieve an appropriate balance between
providingessential fundingto sustainandenhancethe roleofpolitical partiesin fostering
political/policydebate, including theengagementof theirmembersand citizens in those
activities,togetherwiththeassurancethatpublicmoneyisusedforlegitimatepurposesina
transparent,accountablemanner,whilerespectingtheautonomyofthepartiesasprivate,
voluntaryassociationsoflike-mindedpeople.
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Manitoba Allowance Commissioners Report Summary
Options for Determining the Total Amount of Allowance Spending and
Allocating Money Among Registered Political Parties
Thissectionseekstoillustratethereasoningthatliesbehindthedecisionspresentedlaterin
this reportregarding thetotalspendingandthe allocationof funds thatwould take place
under the new allowance program. The list of options was generated from comparative
researchonthepartyfinancingarrangements thatexistelsewhereinCanadaandinother
westerndemocracies,onareviewofrecentdebatesoverpartyallowancesthathavetaken
placeinManitoba,ontheconfidentialadviceprovidedbyrepresentativesoftheregistered
parties in Manitoba and on input from interested organizations and individuals who
contactedthecommissioner.
Basedonthearrangementselsewhere,thereisawiderangeofpotentialoptionsforanew
allowanceprogram.Onecanlearnfromexampleselsewhere,butcaremustbetakennotto
import features from other political systems that do not fit with the size, economic and
financialrealities,historicaltraditionsandpoliticalcultureoftheprovinceofManitoba.The
commissionerisgrantedauthoritytomakefinaldecisionsand,inprinciple,doesnothaveto
considerthepoliticalacceptabilityofthenewprogram.Thatwouldbeamistake,however.
The goal is to design an allowance program that is not only sound in terms of certain
principlesandcriteria,butalsoenjoysthemaximumpoliticalacceptancebythepublicand
the political parties. This includes the requirement that any new program bepractical in
termsofunderstanding,administrationandcompliancewiththe rulesandis affordablein
financialterms.
The discussion to follow considers a number of optional approaches toprogramdesign
basedontheprinciples/criteriasetforthintheprecedingsection.Thesectionisintendedto
allowcitizensandpoliticalpartiestoseethatthedecision-makingprocesswasbasedonthe
consideration of a range of options, as well as on evidence and careful and balanced
analysisoftheprosandconsofdifferentoptions.Myhopeisthatthisanalysisaddstopublic
understanding, confidence in the process and acceptance of the decisions which the
commissionerisrequiredtomake.
Option 1
Annual allowances based on votes obtained in the most recent provincial election in
combination with a minimum payment to all registered parties and a ceiling on total
spending.Annualreportsandauditedstatementswouldberequired.
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Thisoptioncomesclosestto thepreviousallowanceprogramwhichwaseliminatedwith
thepassageoftheActunderwhichthecurrentprocessoperates.
In terms of theprinciple of clarity, this option represents relativecontinuitywith thepast
program and therefore might imply relative ease of understanding. Party officials have
learned toworkwith the former allowance program so there would less adjustment for
them in complying with a new program along the same lines. In terms of public
understanding,mostcitizensareprobablynotawareofthetechnicalitiesofpartyfinancing
andtheirknowledgeoftheaimsandmethodologyofanewprogramwouldprobablynotbe
muchgreater.However,ifcitizenstookthetimetoconsiderthisoption,Ibelievethatmostof
themwouldfinditrelativelystraightforwardintermsoftheprinciplesandpracticesinvolved.
Intermsofbeingtargeted,thepreviousprogramwassomewhatvagueandopen-endedin
termsoftheaimsandtheeligibilityofdifferenttypesofactivities/spendingbytheparties.
The new Act governing party allowances ismore explicit in terms of its aim to support
administrativeandcompliancecostsandtoprohibitmorecampaign-typeactivitiessuchas
pollingandadvertising.Areplacementprogramdesignedalongsimilarlinestotheformer
program could be more restrictive and focused in regulating the activities to which
allowancemoneycouldbeapplied.
Intermsofaffordabilityandpredictability,thetotalcostoftheprogramandthebudgetary
certaintyinvolvedwithitsoperationwouldbeaffectedbyseveralvariables:thetotalvotes
cast,theceilingplacedonallowancestoindividualpartiesorthetotalpoolofmoneyfor
which parties might compete, the actual expenses incurred by the eligible parties, theminimumpaymenttosmaller,newpartiesandwhetheranyspecialpaymentisallowedfor
apartywhichelectsasingleMLA.
Intermsoffairness,theuseofanallocationformulabasedonthevotesobtainedinthe
mostrecentgeneralelectionisseenbymanyobserverstobethemoststraightforwardand
fairwaytoallocatemoneyamongtheparties.Thefactthatthisformulaisusedinfourother
Canadianprovinceswhichhaveallowancesprogramssupports thisviewpoint.Apervote
formulasupportstheprincipleofproportionalitywhereasaperseatformula(basedonthe
simplepluralityrepresentationsystemonwhichprovincialelectionsarefought)wouldoverrewardpartiesthatwinmoreseatsbasedonnarrowvictoriesratherthanalargershareof
thepopularvoteoverall.
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Manitoba Allowance Commissioners Report Summary
Invotingforaparticularparty,citizenscouldbeseentobedirectingtheirtaxdollarstothe
partyoftheirchoice(althoughthisisprobablyinthemindofonlyasmallnumberofvoters
whentheycasttheirballots)andtheamountofeachpartysallowanceisbasedonthelevel
ofvoter supportat the timeof the lastgeneral election. It is true that between fixed-date
elections held every fouryears,popular support forparty could drop significantly,but thepartywouldcontinuetoreceiveallowancesbasedonpastlevelsofsupport.
Providingpublicmoneyonlyforidentifiableadministrativeandstatutorycompliancecostsof
political parties might also be fairer to taxpayers because they are not being asked to
supportwith theirtaxdollarsthecostsofmorestrictlypartisanactivitiesof politicalparties
whichtheydonotsupport.
Intermsofenforceabilityandaccountability,anewprogramwhichwasmoretargetedinits
purposes anddesignated certain activitiesas ineligible for reimbursementwould present
fewerproblemsthanthepreviousprogramwhichwasgeneralinpurposeandminimalinits
reporting requirements. The newAct presupposes a distinction betweenparty expenses,
which arestrictly administrativeandstatutory in purpose,and those expenses which are
clearlypoliticalandcampaignrelatedinpurpose.Theprohibitionontheuseofallowances
forpollingandadvertisingsuggeststhatcampaignrelatedactivitiesshouldnotbefinanced
with taxpayer dollars. Regulations to implement the Act would have to make these
distinctionsasclearaspossible.Therewouldbea requirementtomakepubliclyavailable
(includingOnline)anannualreportdocumentingtheuseoftheallowancemoney,including
anauditedfinancialstatementinwhichtheauditorconfirmsthatpartyspendinghasbeenin
linewiththeobligationsofreceivingthemoney
Itshouldalsobenotedthattheuseofaper-voteformulacreatesanadditionalincentivefor
the political parties to connect with more voters and to gain their votes, which might
indirectlycontributetohigherturnoutsingeneralelections.
Option 2
Allowancesmight bepaidon the basis of the averageper-capita vote obtainedby each
political party over the two previous general elections (rather than just one election) in
combinationwithaceilingon totalpayments andaminimumpayment tosmallerand/or
newer parties. The allowances could be targeted to support only documented incurred
expenses by parties to support non-campaign activities. Annual reports and audited
statementswouldberequired.
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Intermsofclarityandtargetingthisoptionwouldbeclosetothefirst,withthedifferencethat
aformulabasedonanaveragevoteobtainedintheprevioustwogeneralelectionswould
probablybelesseasilyunderstoodbythegeneralpublic.Restrictinguseoftheallowances
to non-campaign periods and to non-campaign activities would help to promote public
understandingandacceptance.
Intermsoffairness,apervoteallowancebasedontwoelectionswouldrepresentabetter
indication of long-term voter support for a party than a single election whichmight be
dominatedbyasingleissueorothercircumstancesthatmightproducewidefluctuationsin
thehistoricalshareofthevotescapturedbydifferentparties.Undertherulesforfixeddate
elections,employingaslidingaverageofvotesobtainedoverthetwomostrecentgeneral
electionswouldpotentiallycreateaconcernthatapartymightfalloutoffavourwithvoters,
butitwouldcontinuetohaveitsallowancepaymentsbasedinpartonvotesobtainedgoing
as far backaseight years earlier. Aminimumallowance for new, smaller partieswould
allow them topresent their views and build theirmemberships, but the requirement for
multi-electionsuccesswouldencouragethemtobroadentheirappealtomorecitizens.
In terms of affordability and predictability, the combination of a ceiling with the use of
multiple election results would cap spending and smooth out the allowances paid to
differentpartiesprovided they remainedcompetitive.Since2008Manitobaelectionshave
been scheduled on fixed dates - once every four years unless there are exceptional
circumstances-whichwouldmeanthatallowanceswouldnormallyreflectpartyfortunes
overaneight-yearperiod. A two-electionaverageapproachwouldprotectparties froma
poorelectionshowingwhichsawtheirvotesharedropprecipitously.
In termsof enforceability and accountability, this programwould be targeted like the first
optiontosupportonlynon-campaignactivitiesandtheprohibitionon theuseofsuchfunds
forpollingandadvertisingwouldbeenforced.Similartothefirstoption,Onlineannualreports,
includingauditedfinancialstatements,ontheuseoftheallowanceswouldberequired.
Option 3
Anallowanceprogrammightbebasedonthenumberofvotesobtainedbyagivenpartyin
combinationwiththenumberofcandidatesthepartyelectstotheLegislativeAssemblyin
themostrecentgeneralelection.AminimumallowancetoanypartyelectingoneMLAand
aceilingon totalamountof allowancesto bepaidcouldbepart ofthe program. Annual
reportsandauditedstatementswouldberequired.
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Manitoba Allowance Commissioners Report Summary
In termsof clarity andtargeting, therewouldbe limited differencesbetween thisprogram
andthetwooptionsdescribedabove.Combiningvotesandseatstosetallowanceamounts
mightbesomewhatconfusingtovoterswhoareusedtoseeingtherolesofgovernmentand
opposition decided on the basis of seats won rather than share of the popular vote. Of
course,thepreviousallowanceprogramusedmainlyvotestodetermineallowances,withaspecial payment made to a party electing at least one candidate, so that a combined
allocationformulawouldnotbeunprecedented.
Dependingupontheweightassignedtothetwocomponentsofseatsandvotes,thisoption
mightproducegreateruncertaintyandmoredrasticfluctuations intheallowancespaidto
different parties. Conceivably, this might happen when a single election resulted in a
lopsidedvictoryforparticularpartyintermsofcandidateselectedbecausethepartyforming
governmentwonallormost of the close three or four-waycontests. In this instance, the
winningpartycouldtherebyobtainamuchlargerallowancethanthepartywhichmayhave
comeaclosesecondinthepopularvote.
Intermsoffairness,thisoptionwouldcombinethesimplepluralityprinciple(alsoknownas
thefirst-past-the-postprinciple)bywhichvotesaretransformedintoseatsintheLegislative
Assemblywith theproportionalityprinciple(used inelectoralsystemswhichare basedon
some form ofproportional representation)which allocates seats on thebasisof a partys
shareofthepopularvote.Usingthenumberofcandidateselectedtodetermineinpartthe
allowanceswould recognize that the roles of government and opposition are effectively
decidedbythenumberofseatspartiesobtainintheLegislativeAssembly.
However,thesimplepluralitysystemoftenexaggeratestheextentofthepopularsupportfor
thegoverningparty.Thereforeitmightbefairertoprovidethatapartysshareofthepopular
votewouldalsobeafactorinallocatingallowancemoney.Therelativeweightassignedto
seats versus votes in the calculation of allowances could be 50/50 or some other
combinationsuchas70%percentforvotesand30%forseats.
Somepeoplewouldarguethatoursystemallocatesauthorityandcontroloverresourceson
thebasisof election victoryand that partieswhich fail to elect at least fourMLAsdo not
qualify in the Legislative Assembly for recognition under the Standing Orders and forallowancesforcaucusresearchfunding.Theywouldarguethatsimilarlypartieswhichfailto
electasinglecandidateshouldnotqualifytoreceivepartyallowances.
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Ontheotherhand,basingallowancessolelyonseatsintheLegislativeAssemblycouldbe
seenasunfairbecauseitwouldreinforcethestatusquoofthepartysystembypresenting
anotherobstaclefornewparties,perhapsofferinginnovativepolicyideas,whoareseeking
todeveloptheirmembershipsandtoreachvoters.
In terms of affordability and enforceability, a combinedprogram could include a cap or
ceiling on total expenditures. There might be somewhat more confusing calculations
involvedwithdeterminingtheentitlementsofthevariousparties.Thedesignationofeligible
activities and the requirement for annual reports and audited financial statements of
expensesoneligibleactivitiescouldbepartoftheprogram.
Option 4
Allowances might be paid on the basis of party membership and activities related to
servicingmembersand developing party programs. To qualify for anallowance, a partywouldbe required tohaveaminimumnumberofmembersona referencedate (perhaps
January1 of a given year).Qualifyingmemberswould be those individualswho paida
membership fee and who are entitled to vote at party meetings, including leadership
contests andpolicyconventions.Allowancescouldbeusedonly fordesignatedactivities
relatedtostatutoryobligationsimposedonpartiesandtomaintenanceofcontactwithand
involvementofmembersbetweencampaignperiodswhentraditionallysuchactivitytends
todecline.Annualreportsandauditedstatementswouldberequired.
Intermsofclarity,thisoptionwouldbemorefocusedinitsaimsbymakingmembership
developmentandtheongoinginvolvementofmembersinpartyaffairstheprimarypurpose
oftheallowances.ThemembershipnumbersforManitobapartieshavefluctuatedovertime
inresponsetoshorttermevents.
However,atanypointintimeonlyarelativelysmallnumberofManitobans(probablyless
than5 %ofthe population) belong to a political party and anevensmallernumberare
actuallyactiveinthepartyonanongoingbasis,especiallybetweenelections.Membership
feeshavetraditionallybeenkeptlowsoastoencouragemembership.Thesefactsmean
that partieshave notbeen able to finance their activities innon-electionyearsbasedon
membershipfeesalone.
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Manitoba Allowance Commissioners Report Summary
The allowances would be targeted to such activities as the recruitment of members,
maintaining communication with members, providing support to constituency level
associations, involvingmembers in party activities such aspolicydevelopment, providing
supporttothepartypresidentandotherpartyexecutivesanddevelopingtheknowledgeand
skillsofmemberstosupporttheirroleinthepoliticalprocess.
An allowance program based on membership numbers might encourage parties to
experimentmoreoftenwithnewapproachestoengagingManitobans.Onepossibilitymight
beforthepartiestouse theInternettocreatea registeredsupportercategoryofmembers
whoforamodestfee(perhaps$10.00)couldsubscribeOnlinetobecomeasupporterofthe
party. Existing members could also register as online supporters. Money raised in this
mannercouldbematchedbyallowancemoney.
Thefairnessofamembership-basedallowanceprogramwoulddependonanacceptance
of the idea that parties aremeant tobemore than vote gathering, electionvehicles, but
should also be seen as one way, and perhaps themainway, that citizenscan become
directlyinvolvedinthepoliticalprocessonacontinuingbasis.Thisideaiswidelyacceptedin
Europe where the Netherlands pays public grants to parties to boost membership
involvementandseveral othercountriesprovidegrantsto sustainparty research institutes
and to support policy conventions. In the United Kingdom there is a pool of money
administeredby anelectoral commissionandparties canapply forgrants tobe used for
policydevelopment.InCanada,theRoyalCommissiononElectoralReform,whichreported
in1991,proposedsomethingsimilarfornationalpolitics,buttheconceptwasnotadopted
bygovernment.Amembership-basedapproachwouldrepresentafairlydrasticchangefor
Manitoba.
In terms of enforceability andaccountability basingallowance amounts onmembership/
supporternumberscouldcreateissuesofenforcementandcompliance.If thereis a rich
formulaformatchingallowancepayments tomembersandsupporters, politicalpartiesor
individual contestants in leadership campaigns within parties (a period when party
membershipcandoubleortripleinsizerapidly)mightbetemptedtobuymembershipsfor
individuals. It would be fairly easy to identify activities related to the recruitment and
engagementofmembersinnon-campaignactivities,sothiswouldnotposemajorproblems
forenforcement.Annualreportsandannualauditedfinancialstatementscouldensurethat
theallowancefundswerespenttosupporttheaimsoftheprogram.
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Option 5
Anallowanceprogramcouldbebasedonaprescribedsetofgoods,servicesandactivities
deemedtobecoreoperationalrequirementsformaintainingpartiesbetweenelections.The
allowanceswould be seenasa small sustaininggrant,not intended tocover anywhere
closetothefullcostsofannualpartyoperationsinnon-electionyears.Ifthepurposeofthe
allowance is to cover costs associated with statutory obligations and other essential
operatingexpenditures, the sameamountcouldbepaid toallregistered parties tocover
documentedincurredexpenses.
In terms of clarity, this option would target directly and explicitly the administrative and
compliancecoststhatarementionedinTheElectionFinancingAct.Therewouldbelimited
ornoopportunitytodivertallowancemoneytocampaignactivities.
Intermsofaffordabilityandpredictability,theamountsoftheallowanceswouldbebasedonacertainpercentageofabasketofgoodsandservices.Thecostofthebasketcouldbeindexed
toannualchangesintheConsumerPriceIndexoritcouldbeadjustedbythenewallowance
commissionerappointedfollowingeachgeneralelectionnormallyheldonafour-yearcycle.
Intermsoffairness,thefocusof theallowancesoncoreoperationalrequirements thatall
partiesmustmeettobeviableandthemodestamountoftheallowanceswouldmeanthat
nopartyisputatacompetitivedisadvantageintermsofthistypeofpublicfunding.Onthe
otherhand,thesmallsizeoftheallowancewouldpreserveanincentiveforpartiestoraise
moneyfromprivatesourcesinordertosustaintheiroperationsinnon-electionyears.
Intermsofenforceabilityandaccountability,thelistofeligibleitemsofexpenditurewouldbe
spelledoutintheregulationsusedtoimplementtheallowanceprogram.Thereisalreadya
precedentinthepracticesusedbyElectionsManitobatodistinguishbetweenelectionand
non-electionexpensesand,inrelationtothelatter;theexpenditurecategoriesforoperating
apermanentoffice.(Seeafurtherdiscussioninthenextsectionofthisreport.)
In termsof thewider concernto ensure themaximum possible acceptability of the new
allowanceprogram,thepoliticalpartiesmightregardthisoptionastoointrusiveintotheir
internalaffairsbecause itwouldprescribein somedetailhow theyorganize their internaloperationsandhowtheyspendtheirallowancemoney.Adetailedlistapproachmighthave
the additional drawback that the list of approved expenditure items might have to be
updatedregularly,especiallyintermsoftheacquisitionofnewtechnologytocarryoutparty
activities.
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Manitoba Allowance Commissioners Report Summary
A more flexible, less detailed regulatory approach would avoid the need to update
regulations frequently to take account of new technologies and practices. It would also
recognizethedifferencesamongthepartiesintermsoftheirsize,organizationalstructures,
degreeofprofessionalismandthecapacitytocomplywithregulatoryrequirements.
Alatersectionofthisreportendorsesaphilosophyofregulatoryreasonablenessbasedon
theprincipleof trust,butverify;inotherwordsavoidbeingoverlyprescriptiveanddetailed
andinsteadplacesomeconditionalfaithinthecommitmentofthepartiestocomplywiththe
law,inpartbecauseofthepotentialfordisclosureandsanctionsshouldtherulesbebroken.
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Manitoba Allowance Commissioners Report Summary
Costs of an Allowance Program to the Public Treasury
A keypointin theabovediscussionofoptionsis the principle that allowances shouldbe
modest and affordable. This principle is based on recognition of the current climate of
austerityingovernmentandonthedesirabilityofmaintaininganincentiveforpartiestoraise
fundsmainlyfromindividualManitobansasopposedtobecomingdependentonthepublic
treasuryastheprincipalsourceoftheirrevenues.Simplydeclaringthatallowancesshould
bemodestandaffordable,however,begsthequestionofwhatthismeansinpracticalterms.
Anumberofpossibleanswerstothatquestionarediscussedinthissection.
I begin ananswer by observing that the cost of allowances should not beexamined in
isolation from the otherdirectand indirect formsoftaxpayer financial supportprovided to
Manitobaspoliticalparties.
Theotherformsincludepoliticalcontributiontaxcredits(whichdirectlybenefitdonorsintermsof reduced taxes payable and thereby result in a loss of revenue for government), the
reimbursementinpublicfundsof50%ofeligiblepartyandcandidateexpenses(iftheyreach
the threshold of10% of the vote), the provision ofa subsidy for the preparation ofaudited
financial statements and, outside of the election process, the expenditures made by the
LegislativeAssembly tosupportpartiesand individualMLAsin their roles as thegoverning
party,theofficialoppositionandasindividualrepresentativesofManitobas57constituencies.
Recognitionofthesedifferentformsoffinancialsupportraisesaseriesofphilosophicaland
practicalquestions concerninghowmuch in total taxpayersshouldbeasked to invest inpartieswiththeintentiontosupportandenhanceavibrantandhonestdemocraticprocess.
How much money do parties need to be effective in performing their campaign and
legislativeroles?What is the appropriate balancebetween private andpublic funding for
parties in electionandnon-electionyears?What is thepotential harm to the democratic
processifthereisreliancemainlyorexclusivelyonprivatemoney?Isthereadangerthat
parties can become so preoccupied with fund raising that other crucial activities, like
engaging their members and developing policy ideas, are neglected or receive limited
attention?Howdo weensure that theprohibitions imposed on the freedomofparties to
raisemoney from organizations and the limits on the right of individuals to contribute to
parties/candidatesisproportionatetotherisksandtheharmsthatmightresult?
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Iflawsrestrictwhocancontributetopartiesandtheamountsthatcanbecontributed,isit
necessaryandappropriateforthepublictreasurytomakeupanyshortfallinpartyrevenues
that might result? For the public money which flows to parties, how do we determine
whethertaxpayersarereceivingvaluefortheirscarcetaxdollars?
Thesearefundamental,philosophicalquestionsrelatedtothefinancingofpoliticalparties
aboutwhichthereareboundtobedisagreements.Also,unfortunately,empiricalevidence
to inform judgments about these issues is in short supply and is open to varying
interpretations.
Itisnotthemandateofthecommissionertomakedecisionsontheoverallsystemofparty
financing in Manitoba, including whether or not parties have enough money from all
sources to be effective in their roles within the democratic process. While I have the
discretion to consider a wide range of factors, my actual decision-making authority is
restrictedtotheissueofpartyallowances.
Theanalysis in this sectiondemonstrates the options, evidence and analysis that I have
usedtomakemydecisionsabouthowmuchmoneyintotalshouldbemadeavailableto
registeredpoliticalpartiesthroughthenewallowanceprogram.
Option One - Administrative and Compliance Costs
Themostobviousstartingpointforconsideringthetotalamounttobespentonallowances
aretheaimsstatedinTheElectionFinancingActwhichcreatedthepositionofallowance
commissioner.TheActstatesthattheallowancesaremeant toassistparties indefraying
theiradministrativeandcertainoperatingexpenses. TheElectionFinancingActdoesnot
state or imply that allowances should cover all such expenses, if anything the wording
indicatesthattheallowancesaremeanttoprovidepartialcompensationforadministrative
andoperating expenses, including the costs associatedwith compliance toTheElection
FinancingActandotherstatutes.
Itshouldalsobenotedthattheaimsoftheformerallowanceprogramwererathergeneral
innature, restrictedsimply to defraying expenses.There was no reference to the use of
allowancesforparticularpurposessuchasengagingpartymembersordevelopingpolicyideas.
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ThewordingofthenewElectionFinancingActraisesthequestionofwhatsortsofexpenses
qualifyasadministrativeandoperating.UndertheAct,pollingandadvertisingexpensesare
explicitly excluded as eligible expenses, presumably on the grounds that such spending
usuallyhasanexplicitlypartisanpoliticalpurpose.Asdiscussedbelow,theremaybeother
inherently partisan forms of spending that are not strictly related to the daily, coreadministrativeandoperationalactivitiesof thepartiesand thereforeshouldnot beeligible
undertheallowanceprogram.
Excluding such partisan activities still leaves gray areas and room for debate over what
constitutesadministrativeandoperatingactivitieswhichwouldqualifyforallowancemoney.A
pragmaticapproachtoresolvingpotentialdisagreementsoverthetypesofspendingallowed
wouldbe toworkfrompastpracticesdevelopedthroughcollaborationbetweentheOfficeof
ElectionsManitobaandrepresentativesofManitobasfiveregisteredpoliticalparties.
Foranumberofyearstherehasexistedunder TheElectionsFinancesActarequirementthat
thepartiessubmitanannualreporttoElectionsManitoba.Toassistpartiesinmeetingthis
requirement,ElectionsManitobapublishesaLegislativereferenceguideforChiefFinancial
Officersoftheparties.
Onepurpose of the guide is to distinguishbetween election andnon-election expenses,
Section A.6 of that guide states that election expenses do not include any reasonable
expenses incurred in theoperationofany permanent officeofa registeredpoliticalparty,
includinganysalariesandwages paid topermanent staffmembersworking in theoffice
duringtheelectionperiod. Thesectiongoeson tostate thatreasonableexpenseswouldinclude such items as office rent, utilities, telephones office equipment, and salaries for
employees.Theseexpensescanbeconsideredthebaseexpensesincurredinoperatinga
permanentofficeaccordingtotheguide.
Forpurposesofreportingonannualexpenses,ElectionsManitobaprovidesthepartieswith
Form920-AnnualFinancialStatementofaRegisteredPoliticalParty.Itliststhefollowing
reportingcategoriesofspending:
Depreciation Furnitureandequipmentrental Honorariaandsalaries Interestandbankcharges Legalandauditfees
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Meetingspace Officeoccupancy Officesuppliesandpostage Transportation,accommodationandfood TelephoneandInternet
These reportingcategoriesmightprovide thestartingpoint for the generationof a list of
core, infrastructure expenses for goods and services necessary to support routine
administrative and operational activities of the parties. Reasonable expenses for goods,
servicesandsalariescouldbebasedonprevailingmedianmarketprices.Toavoidcreating
anincentiveforthepartiestoincreasetheirexpensesasawaytogainlargerallowances,a
pre-determined pool of total allowance money to be spent could be established by
regulation.Theallowanceamountstransferredtoindividualpartieswouldthenbemadeonaproportionateformulabasedon eachpartysshareof the votesand theactualincurred
expenseswhichtheyreported.
Onefurtherfactorwouldhave tobe incorporated intosuchcalculations.This involvesthe
requirement in The Election Financing Act to include in the calculation of
administrative/operatingexpensesthecostsofcompliancewiththeActandotherstatutes.
Thefactthatsuchexpendituresarerequiredasamatterof lawandpublicpolicy,andare
not based on voluntary decisions made by particular party, appears to have been the
rationale for the direct mentionof such costsin The Election Financing Act. The phrasecompliance costs refer to the expenditures on such items as employees, equipment
(telephones,computers,software,etc.)professionalservices(forexample,accountingand
legalservices)andthecollectionandmanagementofinformation.
Identifying which expenditures are directly and exclusively related to compliance with
various statutory obligations might appear, at first glance, to be straightforward, but on
furtherinvestigationthecalculationsbecomemorecomplicated.Thosecomplicationsare
discussedinthelatersectionofthisreportthatdealswithmattersofregulation,compliance,
enforcementandaccountability.
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Table2 provides anhistoricalcomparisonofpoliticalpartyexpenses reported toElections
Manitobabyeachofthepoliticalpartiesfortheyearsfrom2003to2011.Theexpensesare
reportedintwocolumns.Thefirstcolumnshowsallreportedexpenses,whilethesecond
columnshowstotalexpensesexcludingspendingonadvertising,polling,publicity,posters
and other promotional material, including signs and billboards. Under the new ElectionFinancingAct,theexpendituresinthesecondcolumncouldnotbe fundedwithallowance
money.Inotherwords,removaloftheseitemsgivesusabettersenseoftheamountsthat
each of Manitobas five registered parties have been spending on core administrative
activitiesoverthepastnineyears.Forallthepartiesthespendingonadministrationhas
fluctuatedsomewhatbutingeneralithasrisenovertheyears.
Table 2:
Historical Comparison of Political Party Total and Net Annual Expenses
21
1 Total annual expenses reported on Schedule 1 of Form 920 Annual Financial Statement of a RegisteredPolitical Party.2 Annual expenses net of the following expense categories: a) Advertising Media; b) Posters, pamphlets,promotional; c) Polling; and d) Signs and structural support.
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Insummary,thisfirstoptionpotentiallyprovidesapragmaticanswertothequestionofwhat
anallowanceprogram could cost in total based on the use ofa series ofactivities and
designatedspendingcategorieswhicharefamiliartoElectionsManitobaandpartyofficials.
There would still be th