Canadian row erupts over end to party financing

Thu Nov 27, 2008 2:06pm EST
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By Randall Palmer

OTTAWA (Reuters) - The Canadian government is considering ending public subsidies of federal political parties, Conservative sources signaled on Thursday, an explosive move with the potential to trigger an election.

But the main opposition Liberal Party indicated after an emergency meeting that although it would be hobbled by the move, it would likely not bring down the government over it at a time of economic crisis.

"It's not a question of defeating the government," Liberal Member of Parliament Gerard Kennedy told reporters after an emergency caucus meeting to consider how to respond to it. "It's a question of pressing the government to act (on the economic crisis)."

A number of media outlets, including the Globe and Mail newspaper and the Canadian Broadcasting Corp, reported on Thursday that the government plans to eliminate government funding of political parties in a move that it would bill as a cost-saving measure.

When asked about the reports, Conservative Defense Minister Peter MacKay told reporters: "Our party is obviously taking the biggest hit ... We recognize that there are tough economic times ahead, so as a result we all have to make sacrifices."

Under the current system, each party receives C$1.95 ($1.59) a year for each vote obtained in the last election. That would give the Liberals C$7 million next year and the Conservatives C$10 million.

However, the move would hit the opposition parties much harder than the Conservatives as a proportion of their financing since the other parties have a smaller base of donors and rely more on the subsidies.

The measure would be advanced as part of the government's fiscal and economic update to be presented later on Thursday.   Continued...

<p>Canada's Prime Minister Stephen Harper talks to the media after the signing of a free trade agreement between Colombia and Canada in Lima November 21, 2008. REUTERS/Enrique Castro Mendivil</p>