A Monday morning column by the Halifax Chronicle-Herald's Dan Leger on Liberal parliamentary strategy for the forthcoming session argued that, were Michael Ignatieff to prop up the Conservative government, it might in some ways be beneficial for a party that is "still broke and scarred by internal battles dating back to the Chretien-Martin years."

This assertion earned a gentle rebuke all the way from Montego Bay. Liberal pundit and Ignatieff supporter Warren Kinsella countered that:

Leger's observation deserves a quick response, because I've heard it from a few other pundits, too.

First off, the Liberal Party of Canada isn't "broke." In fact, it's got its lowest post-election-loss level of debt ever, somewhere between two and three million. And with the Elections Act-mandated subsidy - you know all about that now, don't you? - the LPC will be quite election-ready, thank you very much.

That's not all: on the former leadership campaign of Michael Ignatieff, our web site was attracting a significant number of donors. Our web team - a very impressive bunch - were very effective at getting folks to donate.

As luck would have it, I was already working on compiling and organizing the party's financial reports for inclusion in the Pundits' Guide, so whether the Liberal Party is broke is a factual question we should be able to answer. Sort of. I might be a database programmer and retired political organizer, but I'm no accountant and the securities course is a distant memory. Luckily there's Wikipedia on balance sheet basics. And hopefully some readers to help out.

First a note on data sources: most of the various returns that parties, ridings, candidates are required to file with Elections Canada can be found here. Except for the ones that can be found here. The rules on what needed to be filed by whom changed in 2000, 2004 and again in 2007, and each time Elections Canada changed their web interface in terms of how to search, and what you could find when you did.

In a previous post, I compiled all the Annual Subsidy Allowance payments made to registered parties. This time we look at party Balance Sheets, which registered parties been required to file since 2000 and which are available up to the end of 2007 (2008 returns will be available in July of 2009 if past practice holds). So far, I've completed my look at the Bloc, Liberals and NDP. See if you can guess which of the coalition partners (or supporters) is the correct answer to each of the following:

• Q1. Which party just moved into the black (i.e., Net Worth, aka Members' Equity or [Total Assets - Total Liabilities] > 0) for the first time since 1999?
• Q2. Which party shows the highest Net Worth in 2007?
• Q3. Which party is paying the highest interest rate on its loans?
• Q4. Which party rented a warehouse from 2005-2006?
• Q5. Which party owns its own office building and earned $192K in net rental income last year?
• Q6. Which party owns its own printing equipment?
• Q7. Match the lender to the party:
• Citizens Bank of Canada
• Caisse Desjardins
• Royal Bank of Canada
• Consortium loan from six national banks
• Fonds Lauzière pour la souveraineté
• Banque Nationale
• Canadian Labour Congress
• Q8. Which party had the highest level of outstanding bank loans and/or bank indebtedness at the end of 2007?
• Q9. Which party had the most cash on hand at the end of 2007?
• Q10. Which party had the highest Working Capital (Short-term Assets - Short-term Liabilities) at the end of 2007?

Score one point for each correct answer. Yeah, I know some of the lender ones were gimmes. A perfect score is 16.

• A1. The Bloc just moved into positive net worth territory in 2007 ($478,885), after being down as much as $1.8M just two years before.
• A2. The NDP had the highest net worth of the three parties in 2007: $4.7M, to the Liberals' $2.8M and the Bloc's $479K.
• A3. The Liberals were being charged Prime+3% on their last loan, as reported in 2007, while the NDP were paying Prime+1.25% on their loans (all discharged by 2007), and the Bloc pays Prime+1% for their lines of credit.
• A4. The Bloc leased a warehouse in 2005, with a lease expiring Jan. 31, 2006.
• A5. The NDP bought a commercial building in downtown Ottawa for $4M in 2004, and earns rental income from other tenants. It earned $80K in 2004, lost $27K in 2005, earned $74K in 2006, and earned $193K in 2006 2007. The Bloc and the Liberals lease their office space.
• A6. The Liberal Party specifically reports its printing equipment as a separate line item in the Tangible Assets notes to their financial statements.
• A7. Match the lender to the party:
• Citizens Bank of Canada (NDP)
• Caisse Desjardins (Bloc)
• Royal Bank of Canada (Liberals)
• Consortium loan from six national banks (Liberals)
• Fonds Lauzière pour la souveraineté (Bloc)
• Banque Nationale (Liberals)
• Canadian Labour Congress (NDP)
• A8. The Liberals had $1.5M in outstanding bank loans at the end of 2007, while the NDP and the Bloc had no outstanding loans, but were into their lines of credit a bit (the NDP by $230K, and the Bloc by $25K). The fourth quarter subsidy allowance is not payable until the first week of January, however, so that might explain the low cash reserves and high receivables all-round.
• A9. The Liberals had $2.7M in cash on hand at the end of 2007, while the Bloc had $11K (less its $25K dip into the line of credit), and the NDP stood at 0 but were into the line of credit by $230K.
• A10. Thanks to that cash on hand, the Liberals also had working capital of $2.3M at the end of 2007, while the Bloc had $465K and the NDP had $422K

Now I know you can't read the Balance Sheets without looking at the Statements of Income and Expenses and the other party returns. But honestly that's a longer project, because the data is not, shall we say, terribly well organized. However, if there are readers out there who know what other metrics should be applied to assess financial statements, I'll run them and see where the parties are.

Meantime, here are some summary tables from 2000 to 2007 (in a temporary location until I can integrate them into the site a bit better). Note that, especially in 2000 and 2004, returns may not be comparable with previous years due to regulatory changes. Also, where values were restated or corrected in a later year, I've used the later numbers rather than the ones from the original document (which is hyperlinked from the Elections Canada logo under each year).

Next up: the Conservatives (and their antecedents), and the Green Party.

Labels: Bloc Québécois, Liberals, NDP, Party Finance