In 2003, faced with then prime minister Jean Chrétien’s Bill C-24—an act to make amendments to the Canada Elections Act which would effectively end corporate and union donations by imposing an annual limit of $1,000—the NDP decided to diversify and professionalize the party’s revenue stream, said NDP principal secretary Brad Lavigne.
Before the election financing laws changed, the NDP raised money to purchase the 279 Laurier Avenue West building.
Mr. Coletto said unions had a “last-minute chance” to contribute to the party before Bill C-24 received royal assent in June 2003, and rallied together to buy the New Democrats the downtown Ottawa building.
In 2005, Harold Jansen, a political science professor at the University of Lethbridge, Alta., and Lisa Young, a political science professor at the University of Calgary, Alta., wrote a paper about the NDP’s relationship with organized labour and, in part, looked at the NDP’s history of union financing.
“In the period from 1975 to 2002, unions contributed an average of $1.9-million annually (18.4 per cent of the NDP’s revenues). In election years, the average is $3.7-million (28.1 per cent of revenue); in non-election years, it is $1.5-million (or 15.2 per cent of total revenue),” said their report, titled Solidarity Forever? The NDP, Organized Labour, and the Changing Face of Party Finance in Canada, noting that union contributions historically spiked in election years.
Unions, or organized labour, had traditionally “delivered significant sums of money” to the NDP, said the 2005 report. Bill C-24 would therefore throw a wrench in the NDP’s financing wheel, and despite this, Mr. Lavigne said the party supported the law.
“We believed that it was time to get big money out of politics, so we support the banning of corporate and union donations to political parties,” said Mr. Lavigne.
The purchase of the Laurier Avenue West building was just one way the NDP diversified its revenue streams: Mr. Lavigne said the party began to bring a lot of its fundraising “in house.”
“We began to take much more kind of control…we invested at an early stage in online fundraising, which we’ve done quite well at, and we’ve also invested a tremendous amount on donor acquisition, as well as moving one-time donations to monthly givers. So we began the process of building a very solid foundation,” said Mr. Lavigne.
Mr. Jansen and Ms. Young’s 2005 paper noticed a rallying on the part of organized labour to contribute to the NDP before Bill C-24 came into effect.
“In the lead-up to the ban on union donations, there was a sharp increase in union donations to the party. In 2003 (a non-election year), unions donated more than $5-million to the NDP; donations from trade unions accounted for just over half of the NDP’s revenue in that year, a significant increase over the historical norm,” said the report.
Mr. Jansen and Ms. Young point to a “capital campaign” run by the party in 2003, the money from which the NDP used to buy the building in downtown Ottawa.
Sally Housser, acting deputy national for the NDP, declined to discuss details of the 2003 building purchase, saying, “there’s a certain amount of our party finances that we’re not going to discuss publicly.”
The Hill Times took a look at the NDP’s annual financial returns from Elections Canada, comparing the party’s capital assets in 2003 to 2004. In 2003, the NDP’s capital assets consisted only of furniture and equipment. But in 2004, in addition to furniture and equipment, the NDP had acquired land and building capital assets at a cost of $4,102,053. The purchase of the building was finalized in February 2004, said Ms. Housser.
“Where the Conservatives invested large money in developing and building an [database] infrastructure to raise money, the NDP took advantage before the rule change to get their supporters and their partners in labour to get them a building that they could then use as collateral,” said Mr. Coletto.
The 279 Laurier Avenue West building, which was given a ‘green roof’ by the party in 2008, houses the NDP’s national headquarters on its third floor, while the bottom two floors are occupied by tenants: cosmetics store Murale on the first floor, and a software company on the second floor.
Ms. Housser declined to discuss how much the party makes in rent each year from the two tenants or how much the party saves by not having to pay rent, saying only, “we haven’t paid rent since 2003 so obviously there’s a financial benefit to the party in that.”
Mr. Lavigne was equally vague when discussing how much revenue the NDP’s downtown building rakes in each year, but said “[the building] brings in significant annual revenue to the party’s coffers.”
But Mr. Coletto said aside from the revenue reaped directly from the building, the NDP’s very ownership of the building puts them in a better position to face the phasing-out of per-vote subsidies.
The per-vote subsidy was introduced with Bill C-24 as a means to counter the loss of corporate and union financing. Set to be eliminated in three phases, the subsidy currently sits at just above $2 for every vote received by a political party. Beginning April 1, 2012, the subsidy will be decreased to $1.53 per vote; in 2013, it will go down to $1.02 per vote; in 2014, it will be reduced to $0.51 per vote until the end of that fiscal year, on March 31, 2015, when parties will cease to receive the per-vote subsidies.
The Conservative Party—which has built a reputation as a master of successful grassroots fundraising and raised an average of $17.4-million each year since 2004—has consistently been able to bring in more money from fundraising than the per-vote subsidy, and is in a good position to deal with the loss of per-vote revenue.
By comparison, the Liberal Party had traditionally relied on large corporate donations and with that door closed by Bill C-24, since the per-vote subsidies were introduced, the party has only managed to raise more money from fundraising than the public subsidies in 2006, 2009 and so far in the first three quarters of 2011. The Liberal Party is currently looking to further modernize and popularize its fundraising efforts, but as it stands now, fundraising is a sore spot for the party.
The NDP, like the Conservative Party, already pursued grassroots fundraising prior to the public subsidy introduction, but the per-vote subsidy—which averages annually at $4.8-million for the NDP—has made up a significant amount of the party’s funds since its introduction.
But Mr. Lavigne said the NDP is “very confident” it will be able to make up the difference “and more with a more comprehensive fundraising strategy.”
Mr. Coletto said the building was an “innovative way” for the party to deal with the loss of union contributions, and now with the loss of per-vote subsidies, “having that asset, I think, is going to become an even more valuable part of the New Democrats long-term financing.”
Mr. Coletto said the public subsidies benefited political parties in two main ways: they directly added money to party vaults, but could also serve as a guarantee of a party’s financial viability.
Banks could look at the percentage of votes a party was likely to bring in to determine how much money it would likely receive from the subsequent subsidy.
“And so you use that, plus the idea that you’re going to get half of your election expenses refunded as the collateral to take a loan out to run an election campaign. Now as they start phasing out these subsidies, that certainty is disappearing,” said Mr. Coletto. “The Conservatives don’t have to worry, they’re raising enough money…in 2010 the Conservatives brought in $29-million, they spent $22-million, and so they had a surplus of $6.9-million, that’s probably as much as the Liberal Party raised total.”
Mr. Coletto said the Laurier Avenue and Bank Street building will be able to sub-in for the subsidies as collateral if the NDP should seek a bank loan.
In their 2005 paper, Mr. Jansen and Ms. Young wrote: “By donating the money to buy the building, organized labour was essentially providing a perpetual loan guarantee…the ‘gift that keeps on giving.’”
“Of the three main parties, the NDP’s the only with any property, and $4-million worth is a big chunk,” said Mr. Coletto, adding that, “other than the Conservative party, no party probably is in a financial position to buy property [right now].”
Ms. Housser said the building “certainly seems like a wise investment…we’re very happy there and I would imagine we’ll stay there for a while.”
The Laurier Avenue West and Bank Street building houses the NDP’s national headquarters and has served as the party’s campaign war room leading up to elections.
Original Article
Source: Hill Times
Author: Lsura Ryckewaert
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