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Grit Leadership Race Poses No Threat to Party Debt


by F. Abbas Rana
26 August 2002


OTTAWA - Speculation that a protracted leadership race could hurt the Liberal party's chances of retiring its large debt were stamped out by Prime Minister Jean Chrétien last week when he told his cabinet ministers to place their leadership campaigns in check or join the backbenches if they can't.

The party's debt emerged as an issue last week after Mr. Chrétien (Saint Maurice, Que.) announced that he was leaving as leader in 18 months, opening up the possibility of a lengthy campaign during which some of the party's biggest fundraisers would be collecting money for their war chests rather than contributing to the party's depleted coffers.

"They [ministers] cannot organize a campaign without permission," Mr. Chrétien told reporters when asked if the leadership race was on. "I will give the appropriate time that is necessary so that all the candidates will have an equal chance."

As for Akaash Maharaj, chair of the policy development of Liberal party of Canada who is also a candidate for the position of the president of the party, he said the leadership campaign may have a negative effect on the ability of the party to raise more funds but added that this will be offset by the signing up of more membership form fees for the convention.

Furthermore, he said that a certain percentage of the funds that are raised by individual leadership contenders goes to the party in exchange for the tax receipts.

"Historically, in exchange for providing tax receipts to contributors of the leadership camps, the party has recovered a percentage of those donations. As a result, fundraising by the leadership camps pay some dividends to the Liberal party," said Mr. Maharaj in an interview with The Hill Times.

"Moreover, one would normally expect a very substantial increase in the membership of the party in the lead up to a leadership convention and that too would assist us in raising funds by membership fees. There is no denying, however, that the fundraising efforts of individual leadership candidates may have an impact on the funds raised by the party but this will be more than offset by the interest and excitement that the process has generated or will generate."

Mr. Maharaj was critical of the party's financial difficulties, given that it has been boasting that while in government it has managed to eliminate the national deficit.

"It is the most stunning rebuke that the party has not been able to bring to bear the same financial discipline in our own internal affairs."

Moreover, Mr. Maharaj said that some of the people use the leadership campaign as an excuse for the financial disarray that the party is in but he said that the unofficial leadership campaign started only a couple of years ago, while the party is in government for nearly a decade.

"There will be some people who will blame the leadership race for our financial woes but the fact is we are three and a half million dollars in debt after 10 years in government without a leadership race."

Canadian Alliance currently has a debt of $2.3-million but its House leader, John Reynolds, said in an interview with The Hill Times earlier this month that the party has paid off a major portion of its debt and very soon the Alliance will be the only major political party in Canada that will be debt free. The Tories and NDP are currently in a debt of $5.3-million and $379,000, respectively.

According to the numbers released by Elections Canada last month, the Liberal party last year raised $15.9-million in comparison to Canadian Alliance whose contributions decreased by 80 per cent and managed to raise only $4-million in donations last year. The Tories raked in $3.7 million while Bloc and NDP raised $1.5-million and $4.4-million, respectively.

Mr. Chrétien has said he wants the Liberal party to be debt-free before he leaves office. In this regard, Mr. Chrétien asked his 29 cabinet ministers and 10 secretaries of state last May to raise $25,000 each in an effort to pay off the party debt but it's not clear if they heeded to his call. Mr. Chrétien further advised his cabinet ministers not to attend any fund raisers if the money raised in those events goes to the MPs rather than the party.

Under current party rules, riding associations must remit 10 per cent of the money raised between $15,000 and $25,000 to the Liberal party. If the money raised is more than $25,000, 25 per cent of that must go to the party.

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