Thursday, May 30, 2013

FDA Talking Points Series: 0.1 Percent Rule

This 2007 Ontario Superior Court decision (Longley v. Canada) established the Canadian legal basis for some Canadian federal political parties to receive public subsidies while other federal political parties not receive them. The intent of the decision was to prevent frivolous political parties from receiving public subsidies, and yet the decision ensures that frivolous and small and new parties do not receive public subsidies.

The Foundation for Democratic Advancement (FDA) takes the position that 0.1 percent popular support is a reasonable and fair threshold to distinguish unpopular parties from popular parties. The FDA believes that electoral systems require some form of barrier of entry to minimize frivolous parties from undermining the integrity of electoral systems. However, a delicate balance needs to be obtained between supporting parties and not supporting them.

The FDA adopts a two-tiered system:

1. Parties with at least 0.5 percent popular support.

2. Parties with at least 0.1 percent popular support.

Parties with at least 0.5 percent popular support would receive all the benefits of registered party status. In addition, public subsidies would be distributed equally to these parties, and the media would be required during campaign periods to provide broad and balanced coverage of these parties.

Parties with at least 0.1 percent popular support would receive public subsidies at a lower level than parties with at least 0.5 percent popular support. Also, these 0.1 percent to 4.99 percent parties would have equal access to and cost of campaign advertisement with all other parties. Frivolous parties would be disallowed from receiving any public subsidies on grounds that their existence is not predicated on every forming any part of government. Their only purpose is to mock the system and/or parties in it or to pursue self-interest agendas unrelated to politics.

In Longley v. Canada, 2007, Ontario Court of Appeal decision, Judge Blair agreed with a Canadian federal public subsidy threshold of 2 percent national electorate support or 5 percent support from all candidates of a party from relevant constituencies. This threshold impacts negatively small and new parties which are not frivolous parties by denying them public subsidies which larger parties receive. Judge Blair ignores this issue by leaving it up to the elected members of Parliament to determine the appropriate threshold. In the FDA's opinion, this is a gross error of Judge Blair's decision, and touches on the fundamental contradiction and limitation in the Canadian federal democracy and most other western democracies: the majority of elected officials determine the election laws and appoint the federal justices who determine the constitutionality of these laws.

Excerpts from the Longley Decision 2007

"[23] The history in France is of some interest. Major amendments to France’s public funding regime for political parties occurred in 1990. The 1990 regime called for a threshold requiring a party to run at least 75 candidates (out of 577 constituencies) and obtain at least 5% of the vote in each. Before the provisions became operational, however, France’s Constitutional Council ruled the latter threshold unconstitutional. Public funding became available with no vote-based threshold in place, and from 1990 to 2003 the number of registered political parties increased from 29 in 1990 to 244 in 2003. The number peaked at 316 in 1999. There was some concern that groups were being formed solely for the purpose of accessing public funding. Interestingly, the Natural Law Party was amongst the newly registered parties. Thresholds were re-introduced in 2003 to take effect in 2007. It requires parties to run a minimum of 50 candidates and to obtain at least 1% of the vote in the constituencies in which candidates are run. France’s Constitutional Council apparently took a different view of the new thresholds, raising no concern about them in a decision released in 2003."

Interestingly, Judge Blair references France as an important example of the need for thresholds for the determination of which parties receive public subsidies. In France, the threshold is 1 percent of the national vote and a party must endorse at least 50 candidates out of 577 constituencies. Judge Blair does not mention that new parties in France receive public subsidies as long as within a 12 month period they received donations from 10,000 citizens with a minimum of 500 elected representatives, and donations totaling €150,000 Euros. (France has about 40,000 elected representatives.)

Further, as stated in the Longley decision, "the objective of the 2 percent and 5 percent rule is to safeguard against the misuse of public funds, thus preserving the integrity of the process and its public financing mechanism." Judge Blair states that the Canadian legislature is not required to adopt the least impairing option to deal with for example the misuse of electoral finance:

"As the second step in the proportionality analysis, the government must show that the measures at issue impair the right of free expression as little as reasonably possible in order to achieve the legislative objective. The impairment must be ‘minimal’, that is, the law must be carefully tailored so that rights are impaired no more than necessary. The tailoring process seldom admits of perfection and the courts must accord some leeway to the legislator. If the law falls within a range of reasonable alternatives, the courts will not find it overbroad merely because they can conceive of an alternative which might better tailor objective to infringement: see Reference re ss. 193 and 195.1(1)(c) of the Criminal Code (Man.), 1990 CanLII 105 (SCC), [1990] 1 S.C.R. 1123, at pp. 1196-97; R. v. Chaulk, 1990 CanLII 34 (SCC), [1990] 3 S.C.R. 1303, at pp. 1340-41; Ramsden v. Peterborough (City), 1993 CanLII 60 (SCC), [1993] 2 S.C.R. 1084, at pp. 1105-06. On the other hand, if the government fails to explain why a significantly less intrusive and equally effective measure was not chosen, the law may fail. [Emphasis added.]"

This point is the crux of the Longley decision. The impact of the 2 percent and 5 percent rule on small and new parties is disregarded because the Canadian legislature is not required to have the least impairing option. So instead of legislating that frivolous parties cannot receive public funds, the Canadian legislature ensures that frivilous parties and small and new parties cannot receive public funds. Judge Blair ignores the significant impact of this decision on electoral fairness.

Examples of Thresholds for Public Subsidies

UNITED STATES

There are no public subsidies for congressional candidates and privately funded presidential candidates. The only public funding available is for publicly funded presidential candidates. This funding is based on three ways:

1. The first $250 contribution to a party is matched with a public subsidy. To receive this matching payment, a presidential candidates must raise more than $5,000 in each of 20 different states.

2. General election grants are available to presidential candidates of major parties who win their parties' nomination. Third-party candidates can receive a percentage of this grant if they have at least 5 percent of the popular vote.

3. Party convention grants are available to national parties for their national Presidential nomination convention. Third-party candidates can receive a percentage of this grant if they have at least 5 percent of the popular vote.

The U.S. Presidential Election Fund favours major parties, and it has a threshold of at least 5 percent national support for third-parties. The matching fund is linked to a threshold of raising funds in different states, rather than a popular support percentage. In addition, new parties receive public funds based on popular vote in comparison to the popular vote for major parties. If the popular vote for major parties is 96 percent, and the popular vote for a new party is 0.1 percent, then this new party will receive 0.1 percent of the funds of the major parties. If the major parties received $100,000,000 in public funds, then this new party would receive $100,000 in public funds. If the major parties received $0.0 in public funds, then this new party would receive $0.0 in public funds.

Legislative Research

There are no public subsidies for congressional candidates and committees (FEC Campaign Guide: Congressional Candidates and Committees, 2011).

Funds in the Presidential Election Campaign Fund are divided up in three ways:

1)Primary matching payments are based on the government matching individual contributions to a candidate, and only the first $250 of a contribution is matchable. To be eligible for matching, a candidate needs to raise more than $5,000 in each of 20 different states.

2) General election grants are for Republican and Democratic candidates who win their parties' nomination. The candidates are eligible to receive $20 million, adjusted for cost-living-adjustment to cover campaign expenses. In 2008, candidates could receive $84.1 million. Third party candidates are eligible to receive a percentage of this grant if the candidates receive at least 5 percent of the popular vote. (The 2008 expenditure limit in 2008 was $88.45 million.)

3) Party convention grants are for major political parties for their national Presidential nominating convention. The parties are eligible to receive $4 million, adjusted for inflation. In 2008, the major parties received $16.82 million. Third parties are eligible for the grant if they received at least 5 percent of vote in the previous Presidential election. The Federal Election Commission defines a majority party as 25% or more of the total popular votes in the previous election; minority party as between 5% or more and less than 25% of the total popular vote in the previous election; new party as a party which did not participate in the previous election (Presidential Election Fund, 2012).


CANADA

Canada at the federal level of government, as mentioned, has a current law that says parties with at least 2 percent of national electoral support or parties with candidates with at least 5 percent electoral support from their constituencies, are eligible to receive public subsidies. The amount of subsidies is determined based on percentage of popular support, and in another subsidy it is based on the amount of campaign expenditure in elections. The intent of these thresholds is to prevent frivolous parties from receiving public subsidies, and reward popular parties with subsidies. However, the thresholds deprive small and new parties of public subsidies, and reward the largest parties disproportionately more than other large parties. Overall, the Canadian thresholds create unfair and unequal electoral conditions for parties.

Legislative Research 

The Chief Electoral Officer determines for each quarter an allowance payable to a registered party whose candidates received either 2 percent of the popular vote or 5 percent of the valid votes cast in the electoral districts of the candidates endorsed by the party in for the most recent general election (Elections Act, 435.01(1)(a)-(b)).

The quarterly allowance is the multiplication of the valid votes cast in the most recent general election by $0.3825 for 2012; $0.255 for 2013; and $0.1275 for 2014. All quarters begin on April 1st (Elections Act, 435.01(2)(a)-(c)).

The Conservative government revised the federal budget to phase out the public subsidies for federal political parties beginning April 1st 2012 (Smith, J, July 4, 2012).

The annual subsidy was lowered from $2.04 in 2011 to $1.53 per vote in 2012 and will be further reduced each year on April 1st until it is eliminated in 2015 (Smith, J, July 4 2012).

If a registered party receives 2 percent of the votes cast in the election or 5 percent of the number votes cast in the electoral district in which the part endorsed a candidate, then 50 percent of the parties’ electoral expenses are refunded (Elections Canada, Article 435 (1)).


VENEZUELA

Venezuela has no direct public subsidies for political parties. Therefore, every party in Venezuela receives an equal amount of subsidies. In addition, the National Electoral Council may finance the diffusion of electoral propaganda for the sole purpose of ensuring complete and balanced election coverage.

Legislative Research

The National Electoral Council may finance in part or in full the diffusion of electoral propaganda in the media of radio, television, or print in accordance with regulations including ensuring complete and balanced coverage (Election Law, Article 78).

Each candidate is limited to a half page print ad in national newspapers per day, and broadcast ads are limited to 3 minutes per day (National Electoral Council Investigates Campaigns, 2012). Radio ads are limited to 4 minutes per day (Walser, 2012).

Public and private media election coverage will be complete and balanced without distorting the reality of the campaign. The media must observe "rigorous" balance in terms of space and time devoted to information on candidates and parties (Election Law, Article 81).

The state disallows public and private media from making their own election propaganda aimed at encouraging or persuading the electorate to vote for a particular candidate or party or against a particular candidate or party (Election Law, Article 79).


References

Elections Act. (2000, May 31). Elections Canada. Retrieved from http://www.elections.ca/content.aspx?section=res&dir=loi/fel/cea&document=part00&lang=e

Election Law. (2012). National Electoral Council. 2012. Retrieved from http://www.cne.gov.ve/web/normativa_electoral/ley_organica_procesos_electorales/indice.php

Garvey, S. (2013). FDA Talking Points Series: 0.5 Percent Rule. Foundation for Democratic Advancement. Retrieved from http://foundationfordemocraticadvancement.blogspot.ca/2013/04/fda-talking-points-series-05-percent.html

Longley v. Canada (Attorney General). (2007, December 6) Ontario Court of Appeal 852 (CanLII). Retrieved from http://www.canlii.ca/en/on/onca/doc/2007/2007onca852/2007onca852.html

Presidential Election Campaign Fund. (2012). Federal Election Commission. Retrieved from http://www.fec.gov/press/bkgnd/fund.shtml

Walser, R. (2012). The Chávez Plan to Steal Venezuela's Presidential Election: What Obama Should Do. September 19, 2012. The Heritage Foundation.
 

 

 

Mr. Stephen Garvey, Executive Director Foundation for Democratic Advancement 

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