PartII: Finances
Describing how the Party operates financially is not an easy thing to do. The history, the agreements, the exceptions to the agreements, all come together to produce a body of rules and customs into which one delves at her/his own peril.
The key point to remember about the rules that govern our finances is that they reflect the way the Party was structured. In the same way that the Federal Party is a partnership with Labour that rests on Sectional foundations, the Federal Party's finances rely on continued solid support from Labour and the performance and good-will of the Sections.
A broad look at the way the Party works illustrates this point:
Sections build the Party from the ground up. Sections oversee the recruitment of members, raise money, build riding associations and prepare for elections at the riding level. As a result, Sections have the responsibility to administer - and the exclusive use of - the membership lists. Sections also determine under which conditions ridings - including federal ridings - can raise money and how much of this money the ridings can keep. To facilitate the raising of money, the Federal Party grants Sections the right as its agent to issue federal tax receipts without stringent review. Sections then remit 15% of all funds raised - with some notable exceptions - to the Federal Party.
The partnership with Labour is present at all levels of the Party. Local unions affiliate to the Party and remit 20 cents per member per month to the Federal Party. Forty percent of this amount is then credited to the Section of origin's 15% revenue sharing obligation. Labour also contributes significantly at election time, particularly through the CLC's Nickel Fund.
By the mid-eighties, the Federal Party's exclusive reliance on Labour and Sections as sources of funding had led to a serious financial predicament. It was at this point that the Federal Party aggressively launched its own direct- mail fundraising program. Today, these three sources generate roughly equal amounts of funds for the Federal Party.
A New Deal
We believe the time has come to revisit the rules currently in place with a view to providing the Federal Party with more responsibility for its finances and providing federal ridings with the means to assume their new role.
We are mindful of the fact that there are 34 years of history behind the current rules. As a result, it is essential that Sections and federal ridings be consulted both on the principles underlying the reforms and the details of any eventual implementation. It is recognized that a period of transition will be necessary.
In order to allow the Federal Party to communicate with Party members and permit these members the opportunity to contribute financially directly to the Federal Party, we recommend that:
- Beginning in 1996, Sections share the membership lists with the Federal Party. Discussions to arrive at some form of financial compensation to Sections for the cost incurred in recruiting members and maintaining the lists would be appropriate. The framework for these discussions will be based upon the principle that for the next five years, the Federal Party's access to membership lists will not demonstrably weaken the financial position of any Section.
In order to allow federal ridings to assume their new responsibilities within a renewed Federal Party, we recommend that:
- Beginning July 1, 1996, federal ridings be under the jurisdiction of the Federal Party. Federal ridings wishing to receipt contributions - outside federal elections - would process these funds through Federal Office. Federal Council will determine the revenue sharing on these contributions. It would be understood that the ability to receipt federally could not be used to bypass revenue sharing arrangements between Sections and provincial constituencies.
In order to protect the Federal Party from the claim that the Party's use of the Federal Tax Receipt is not in keeping with the spirit of existing federal legislation, we recommend that:
- The Federal Party work with Sections towards ensuring that mechanisms be put in place to demonstrate that Federal Tax Receipts issued by Sections are spent on federal purposes.
Revenue sharing arrangements between the Federal Party and Sections would remain in place. Party members felt quite strongly and were concerned that a loosening of these ties could lead to the eventual separation of the federal and provincial levels. The processing of affiliation dues would also remain unchanged. Our partners in Labour place a great deal of importance in seeing their financial contributions continue to support both the Federal and Sectional levels .
We believe these recommendations will create a framework in which the Federal Party will be able to assume more control of its finances and permit federal riding associations the opportunity to be at the centre of a renewed Federal Party. We wish for this to happen in the context of a unified Party. To ensure this, there must be ongoing, regular consultation between the Federal Party and the Sections to coordinate fundraising efforts to maximize the benefits to all levels.
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