Democracy is about political equality. To be democratic, a political system must in essence belong to all the people equally, and if it is to belong to all the people equally, all the people must fund it equally. One person/one dollar may not be as important as one person/one vote, but it is very important nonetheless—money does translate into votes.
The federal government's termination of the public subsidy to political parties will shift political power away from equality toward those with bigger purses, i.e. away from democracy toward plutocracy. This may be of little consequence to Conservatives because after all Conservatives believe in privilege, but it should be of considerable consequence to democrats.
The Conservatives are right in that we practice other ways of leveling the political playing field—banning of corporate contributions, tax breaks for contributions, limits on election spending, etc,—nonetheless the subsidy is an important tool in achieving greater political equality. Its loss will be a loss for democracy.