Politicians are good at preaching, but they’re not so good at practicing what they preach. Case in point: the federal wage subsidy.
Federal politicians have been moralizing about the evils of business executives taking bonuses while collecting the pandemic wage subsidy, but their silence on their own party taking the subsidy is deafening.
At the beginning of the pandemic, the federal government rolled out a wage subsidy to help businesses keep more staff employed. Unfortunately, the rules allowed some business and political parties to exploit these tax dollars.
New Democratic Party Leader Jagmeet Singh wants to address part of the problem by forcing businesses that took the wage subsidies at the same time as they paid bonuses to executives to return the equivalent amount paid in bonuses. The NDP pointed out that “68 companies that paid executive bonuses and $5 billion in dividends to shareholders collected over $1 billion from the Canada Emergency Wage Subsidy.”
Liberals and Conservatives have also rightly scolded these executives. A business has every right to fatten its C-suite with its own money – just not with taxpayers’ money.
But these politicians have been less willing to point the finger at their own parties who took the wage subsidy meant for struggling businesses. The federal NDP, Liberals and Conservatives all helped themselves to the wage subsidy. Only the Bloc has kept its hand off the wage subsidies from the start.
Conservative Leader Erin O’Toole committed to repaying the money his party took.
“O’Toole believes the wage subsidy was designed to help businesses survive the economic side-effects of the COVID-19 pandemic lock-down, not to subsidize political parties,” said Conservative member of Parliament Peter Kent.
But as of mid-March, the Conservatives still hadn’t paid back the subsidy.
Last September, the Liberals said they would stop taking the wage subsidy, but had no plans to pay it back. And despite all of his lecturing, Singh’s NDP still hasn’t mentioned whether they’ve paid back the subsidy.
By helping themselves to the wage subsidy, the political parties are acting like rich guys at a soup kitchen.
For starters, political parties already receive special taxpayer treatment.
Take the political contributions tax credit, for example. If you donate $100 to your local food bank, you get a federal tax credit of 15 per cent, meaning the total federal income tax you owe goes down by $15. But if you donate $100 to a federal political party, you receive a federal tax credit that saves you a whopping $75.
As of May 2020, parties benefited from $145 million over five years through the tax credit. On top of that, parties and candidates received nearly $200 million in expense reimbursements for the last three elections.
The parties weren’t starved for cash in 2020 either.
The Conservatives raised $20.7 million in 2020 and posted the best fourth quarter by any party ever. The Liberals posted their best fourth quarter fundraising numbers and brought in $15 million last year. The NDP had an especially good year fundraising.
“Outside of that [2019] election year, 2020 marks the most the party has raised since the 2015 federal election that cost the New Democrats their official opposition status,” according to CBC.
Here’s the bottom line: political parties took the wage subsidy even though they obviously didn’t need them.
Parties were wrong to shove their snouts further into the taxpayer trough and help themselves to the wage subsidy meant to help businesses keep their employees on the payroll. But party leaders can help right past wrongs by practicing what they preach.
Politicians are right to force some businesses to pay back the wage subsidy, but they also need to show leadership and make sure their parties pay back the subsidy.
Franco Terrazzano is the Federal Director of the Canadian Taxpayers Federation
