Party Finance in the Wake of the 2011 General Election

May 26th, 2011

[Welcome, National Newswatch readers!]

With the last of the four recounts out of the way, the exit polls and academic post-mortems wrapped up for now, and various other items of post-election business analysis taken care of, we turn our attention back to …

… the money.

Of course, it's going to take some time to sort out how fundraising and spending shaped the parties successes and challenges in last month's election, but here are some of the milestones we'll be watching for:

  • Next Tuesday May 31, the parties' riding associations (aka "registered associations" aka "electoral district associations" or EDAs) must file their annual returns for 2010 with Elections Canada. As they get entered into the Elections Canada database and published to the website, we'll start to develop a picture of who had done a good job on pre-election fundraising. It's probably also an indicator of organizational depth and strength how quickly those get filed, and the fact that the Liberals were much slower than the other parties in filing a complete set of riding returns for 2009 should already have been an indicator that their grassroots had been left untended. (This is also a good reminder to me that it's high time I went back and completed my dataset of 2009 EDA returns, as well).
  • A month after that, the registered parties themselves have to file their own annual financial statements and fundraising reports for 2010 on June 30.
  • By the end of July, we'll also have the parties' second quarter 2011 fundraising reports to examine, which will show the rest of how they fared on the fundraising front during the recent election campaign.
  • Candidates have until four months from Election Day to file their financial returns, so we'll start to see those by early September.
  • The registered parties have until six months from Election Day to file their 2011 election returns, so we'll start to see those posted in November.
  • Meanwhile, the last quarterly allowance (aka "party political subsidy") payment based on the 2008 election will go out at the end of June. It will be increased based on the "inflation adjustment factor" of 1.165 announced last March in the Canada Gazette, and will therefore represent one-quarter of approximately $2.04/vote obtained in the 2008 election ($2.03875/vote, to be exact).
  • The first quarterly allowance payment based on the 2011 election would normally be paid at the end of October, and be based on one-quarter of $2.04/vote obtained in the 2011 election.

Some of you may have seen a certain someone's appearance with Don Martin on CTV Power Play yesterday to discuss the impact of the election on the per-vote democratic subsidy, and how Minister Flaherty's three-year phase-out proposal would affect each of the parties. Since part of that analysis got quoted on CTV.ca, and you may be interested in the calculations, I've reproduced them here, along with a long-needed update to the table of subsidy payments to the parties.

The bars with the black borders show the impact of the election on the annual subsidy payments, but under the current regime. The next three bars for each party show the impact of the declining payments expected to be proposed in the June 6 federal budget.

[Click on image to open full-sized version.]

Per-Vote Subsidy, Before and After 2011 Election, and under expected Budget 2011 proposal for Years 1-3

A reminder that the subsidy payments are calculated based on $2.00 or so until the end of March, 2011, and $2.04 thereafter, taking the announced inflation adjustment factor into account, and including the discounts apparently being proposed in the upcoming budget.

Party Lib NDP Grn BQ Cons
Votes-2008 3,633,185 2,515,288 937,613 1,379,991 5,209,069
Votes-2011 2,783,176 4,512,489 572,108 891,425 5,835,451
Subsidy – Before $7,279,994 $5,040,008 $1,878,742 $2,765,157 $10,437,672
Subsidy – After $5,674,200 $9,199,837 $1,166,385 $1,817,393 $11,897,026
Year 1 $4,255,650 $6,899,878 $874,789 $1,363,044 $8,922,769
Year 2 $2,837,100 $4,599,918 $583,193 $908,696 $5,948,513
Year 3 $1,418,550 $2,299,959 $291,596 $454,348 $2,974,256

I'm not clear whether the government's proposal for phasing out the subsidies will start this year (i.e., that the 75% would start in 2011-2012) or next, although I suspect the former. But if that is the case, then the bar with the black border for each party is the *hypothetical* amount they would have been entitled to receive after the 2011 election based on the number of votes they obtained and the current formula, including the already-announced inflation adjustment factor.

As you can see, in Year 1 of the government's plan only the NDP comes out ahead, then they break even more or less in Year 2, and lose actual dollars in Year 3. In a different take, blogger Greg Fingas (whom we've known up to now only as the mysterious "Jurist" behind the NDP blog "Accidental Deliberations, but who now has a weekly column with the Regina Leader-Post as well; congrats Greg) points out that the total per-vote funding over the three years of the Flaherty proposal pretty much amounts to the expected amount of each party's election spending less their expected rebates – meaning that party fundraising from this point forward can concentrate on supporting current operating expenses and setting aside funds for the next campaign.

Funding for the Bloc Québécois – often a sticking point for some Canadians – seems high until you realize that they still won 23% of the vote in Québec, obtaining the votes of some 890,000 Canadian citizens living there, even if that only earned the party 4 Commons seats this time around.

In fact the Bloc's situation exemplifies more generally the way the per-vote financing introduced a bit of proportionality into Canada's electoral system, as a counterbalance to the first-past-the-post (FPTP) method of electing representatives. In 2008, the Bloc obtained 1.3 million votes, representing 38% of the vote, which earned it 49 seats representing 65% of the ridings in Quebec. In 2011, the party lost 488,000 or so votes, yielding only 4 seats representing a mere 5% of the province's delegation to the House, in contrast to its 23% vote-share. Yet, the Bloc's public funding under the current system – as with that of any party – reflects the votes it obtained rather than the seats its candidates were able to win.

This shows the stickiness of the approach for parties perhaps on the way out, the reverse side of the higher barriers to entry for new parties trying to get off the ground. On the one hand, even some proponents of public funding might balk at extending $1.8 million dollars to a separatist party that had just been handed a massive defeat at the polls, at least in FPTP terms.

On the other hand, when talking about political parties in general, it meant that one bad election would not necessarily mean an execution for that party, but that valid political choices might be retained for possible future resurrection in at least one later election, however temporarily out of favour with the electorate.

Political parties do perform important roles in our electoral system, which are worth remembering:

  • They recruit and cultivate our country's political leaders and representatives, and as we've recently seen, that can be difficult to do well on a shoestring budget or with a regionally concentrated support base, something the Liberal Party may be learning the hard way the next time around.
  • They develop policy, and
  • They bridge gaps between different parts of the country, between different language and cultural communities, and between different interest groups.

These functions are an important part of our system of governance and must be performed well for the overall system to function at its best. Political parties are not simply social clubs, in other words, and we must consider how the various options for financing them will help or hurt those goals.

Some may worry that the proposed new financing regime will have the effect of turning them into pyramid sales organizations, and/or create too high a bar to entry for new choices, thereby entrenching the two largest current entities.

Others will worry that this move is only the first step to reintroducing big money into Canadian politics, whose voice would then drown out those of others who can't afford to participate on the same scale.

One thing is clear: the current and proposed set of democratic subsidies represent a modest expenditure in the federal budget, and provide a very cost-effective party system with plenty of political choice, as compared with the system used by our neighbours to the south. Here is the estimated total annual cost of the four kinds of democratic subsidies, in election versus non-election years:

  Non-Elxn Year Elxn Year
* Department of Finance, 2010 Evaluation of Tax Expenditures. Perhaps 250,000 Canadians contribute to a political party, riding association or candidate each year, and would benefit from the tax credit – IF they had a taxable income.
** Based on 2008 GE
*** Based on 2006 GE; latest figures available due to litigation re 2008 GE
NOTE: Party and Candidate rebate amounts are both included in the $300 million estimated cost of holding a general election.
Per-vote Subsidy $29,754,845 $29,754,845
Contribution Tax Credit* $21,000,000 $32,000,000
Party Elxn Rebates** $29,212,158
Candidate Elxn Rebates*** $24,595,606
TOTAL $50,754,845 $115,562,609

For comparison purposes, the cost of running the Senate of Canada, including over $800K for a Senate Ethics Officer, is $95M annually, while the cost of running the House of Commons, including the Library of Parliament and the Conflict of Interest Commissioner, is around $500M per year. The annual cost of running a small government department like the Department of Veterans Affairs, including Grants and Contributions, is $3.5 billion.

In my view, the government will need to justify how its current proposal will create a better democracy, because with the greater power they've acquired to impose their point of view on others, comes a greater responsibility to consider the Platonic goal of creating a more just republic, and not merely the Machiavellian objective of being more feared than loved. On the other hand, we cannot say they did not obtain a mandate for this policy, as the proposal was clearly outlined in their election platform.

Ideally I believe the political parties should all try to agree on the rules of engagement they will follow, and I can always hope this will be their modus operandi. But, for what it's worth, above are some of the considerations I think Canadians may want to mull over during the upcoming debate in the House of Commons on the government's proposal.

Below, you'll find an updated table of subsidy payments by quarter.

Annual Allowances to Registered Parties, by Payment Date, and projected forwarded according to current provisions of the Elections Act

Period Lib NDP Grn BQ Cons Paid
2011 – Q3* $1,418,550 $2,299,959 $291,596 $454,348 $2,974,256 01-Oct-11
2011 – Q2 $1,851,789 $1,282,011 $477,890 $703,364 $2,654,997 02-Jul-11
2011 – Q1 $1,819,999 $1,260,002 $469,686 $691,289 $2,609,418 01-Apr-11
 
2010 – Q4 $1,819,999 $1,260,002 $469,686 $691,289 $2,609,418 04-Jan-11
2010 – Q3 $1,819,999 $1,260,002 $469,686 $691,289 $2,609,418 01-Oct-10
2010 – Q2 $1,819,999 $1,260,002 $469,686 $691,289 $2,609,418 02-Jul-10
2010 – Q1 $1,815,230 $1,256,701 $468,455 $689,478 $2,602,581 01-Apr-10
 
2009 – Q4 $1,815,230 $1,256,701 $468,455 $689,478 $2,602,581 04-Jan-10
2009 – Q3 $1,815,230 $1,256,701 $468,455 $689,478 $2,602,581 01-Oct-09
2009 – Q2 $1,815,230 $1,256,701 $468,455 $689,478 $2,602,581 02-Jul-09
2009 – Q1 $1,773,903 $1,228,089 $457,790 $673,781 $2,543,328 01-Apr-09
 
2008 – Q4 $2,187,074 $1,264,370 $324,231 $758,350 $2,623,890 05-Jan-09
2008 – Q3 $2,187,074 $1,264,370 $324,231 $758,350 $2,623,890 02-Oct-08
2008 – Q2 $2,187,074 $1,264,370 $324,231 $758,350 $2,623,890 03-Jul-08
2008 – Q1 $2,140,040 $1,237,179 $317,258 $742,041 $2,567,462 07-Apr-08
 
2007 – Q4 $2,140,040 $1,237,179 $317,258 $742,041 $2,567,462 03-Jan-08
2007 – Q3 $2,140,040 $1,237,179 $317,258 $742,041 $2,567,462 02-Oct-07
2007 – Q2 $2,140,040 $1,237,179 $317,258 $742,041 $2,567,462 05-Jul-07
2007 – Q1 $2,096,926 $1,212,255 $310,867 $727,092 $2,515,737 04-Apr-07
 
2006 – Q4 $2,096,926 $1,212,255 $310,867 $727,092 $2,515,737 05-Jan-07
2006 – Q3 $2,096,926 $1,212,255 $310,867 $727,092 $2,515,737 04-Oct-06
2006 – Q2 $2,096,926 $1,212,255 $310,867 $727,092 $2,515,737 07-Jul-06
2006 – Q1 $2,282,186 $974,374 $266,686 $769,708 $1,841,145 06-Apr-06
 
2005 – Q4 $2,282,186 $974,374 $266,686 $769,708 $1,841,145 01-Jan-06
2005 – Q3 $2,282,186 $974,374 $266,686 $769,708 $1,841,145 01-Oct-05
2005 – Q2 $2,282,186 $974,374 $266,686 $769,708 $1,841,145 01-Jul-05
2005 – Q1 $2,240,772 $956,692 $261,847 $755,740 $1,807,734 01-Apr-05
 
2004 – Q4 $0 $956,692 $261,847 $322,846 $0.00 07-Jan-05
2004 – Q3 ($49,646) $12,958 $261,847 $0 ($563,630) 07-Oct-04
2004 – All $9,191,054 $1,914,269   $2,411,022 $8,476,872 01-Jan-04

67 Responses to “Party Finance in the Wake of the 2011 General Election”

  1. @shadow:

    You can’t be serious right?

    This anti union stuff is ridiculouse. Deny it all you want, you and Barcs have have what you do today solely because of the left and the unions. You both ought to be thankful.

    As for this page argument, good for her. I’m a retired military officer, and the thing I admire the most is rightous courage. And she has it in spades.

    There’s nothing to debate here on either accout.

    Arthtur Cramer, Winnipeg

    Oh, by the way, Walker hasn’t got the support of the citizenry and he never campaigned on destroyig unions. You told me Harper should’t try to change medicare as he didn’t campaign on it. Does’t this apply to Walker as well? Why the double standard?

  2. Shadow says:

    Art Cramer modern society owes everything it has to a gazillion different things including the ancient Greeks, the Catholic church, the British crown, etc etc etc.

    That doesn’t mean those things are immune from criticism or automatically useful going forward.

    Are you going to start wearing a toga ? Should we all start wearing togas ? We oughta be greatful right ?

    You do see the fallacy in your reasoning ? Its irrelevent what unions might have done once. What matter is the best public policy going forward.

    As for the page she is a disgrace.

    Just like a soldier would be if they abandoned their duty and started holding up a protest sign during a fire fight.

    Could you imagine someone if Afghanistan dropping their gun and holding up a “Stop The War” sign ?

    That’s not righetous courage. That’s the very definition of dishonour.

    Its going against your word. Its going against the oath this young lady swore.

    Its being a liar, plain and simple.

  3. Shadow says:

    Art quick rejoinder on Wisconsin.

    There was a mini-referendum in the form of electing the supreme court judge who will decide the fate of the budget.

    The conservative judge was re-elected by a clear margin. If the citizens really didn’t want these measures one would have expected his opponent to win.

    Also Walker campaigned on lower government spending, balancing the budget, and not raising taxes.

    Public sector union wages and benefits are direct spending by the government.

    Moving against them seems to be included in a mandate to reduce gov’t spending.

    Harper can do the same thing if he likes. I certainly wish he would !

  4. @Barcs:

    Well, for some reason I can’t see your previous comments. So, it is pretty hard to reply to most of them from memory.

    I am going to address your issue of Black Lung disease. You are in fact totatllly wrong, Black Lung disease is on the increase in the United States, as dcoumented at alternet, http://www.trust.org/alertnet/news/black-lung-disease-seen-rising-in-us-miners/, black lung disease is on the rise. How you can make such a completely ridiculosuly fradulent statement is completely and totatlly beyond me to understand. As for your attacks on teachers, CUPW, etc., those are just tired old libetarian inspired, unsubstantiable allegations. You simply can’t back them up in anyway. Look, get rid of your copy of Atlas Shrugged, sell your Ayn Rand collection, and go back to school. You are boring.

    @Shadow:

    Ok, now your comments are just becoming nonsensical. Walker campaiged on budget management, but not on attacking unions. Poll after poll shows HE HAS NO SUPPOR$T WHATSOEVER for his policies.

    As for honour, don’t you even think about lectruing me about honour. There is NOTHING you can teach me about it. You are a civy, and you NO NOTHING about military service. Your attempted metaphor of holding up a sign in warfare has no validity to it. That siimply has nothing to do with the reality of war and I am not even enter into a debate with a person who OBVIOUSLY doens’t know what he is talking about.

    I will say the same thing to you I said to Barcs, sell your copy of Atlas Shrugged, sell your Ayn Rand collection, and go back to school. You are broing too.

    And that is it. I am not arguig with your morons any longer. I don’t care what your post any more, and I am not wasting any more time trying to knock sense into your selfish, stupid, self-centered heads. You are boring and I’ve had enough of both of you.

    GROW THE HELL UP!

    Arthur Cramer, Winnipeg

  5. Shadow says:

    Art my comparison is directly apt.

    This page swore an oath and abandonded her station to pull this stunt.

    Its a lie. Its going back on your word. Its the definition of dishonour.

    Its as if a soldier dropped their gun in a fire fight to hold up a “stop the war” sign.

    I will indeed lecture you on this point. You’re defending the indefensible. And you’re damaging yourself with your unfortunate remarks.

    Please don’t dishonour yourself with comments that you’ll likely want to retract later.

    Black lung ?

    Its on the rise because environmentalists have banned the practice of mountain top removal mining.

    Its the safest, most effective way to mine for coal.

    You don’t seem to understand the difference between private and PUBLIC sector unions.

    Everything about them IS a budget decision. They are fair game.

    Their wages and benifits should be set by the legislature. Negotiations are ridiculous in this situation.

  6. Shadow says:

    Finally i’ll apologize to Alice for turning her politics blog into a debating society.

    This will be the last word from me.

  7. Barcs says:

    A quote attributed to the nice lady from a ctv story:

    DePape said she did not mean any disrespect against the Senate or her co-workers, “but at the same time I wanted to show that the Harper agenda is extremely disrespectful to Canadian values.”

    .

    I guess my question is… how many ways could she have chosen to bring about her aim without showing disrespect to her co-workers and the senate….

    And given that plethora of ways to do so without showing disrespect…. If she didn’t want to bring disrespect to them why did she chose ones of the ways that she could bring the most disrespect…. instead of one of the other ways that wouldn’t??

    And if she would deliberately choose to disrespect her co-workers, and the institution, (And incidentally all Canadians who have any respect for the government and its institutions)… why would I have respect for her opinion or her cause??

  8. You guys are full of it.

    I say again, throw your copy of Atlas Shrugged in the garbage, sell your Ayn Rand collection, and go back to school.

    Arthur Cramer, Winnipeg.

  9. Oh, and by the way, I regret nothing I have said. Sooner or later, you guys have to be held for the stupidity you are trying to sell as thougtfull comment.

    Alice, I’m going away. Thanks for the forum.

    Arthur Cramer, Winnipeg

  10. I havenn’t been following the debate, I’m afraid to say. But I’m just not crazy on the use of the word “stupid”. Admittedly I didn’t read anything before it for quite awhile.

  11. Barcs says:

    I think that was the first instance of off-color language right where you started reading Alice. Certainly if I have said something wrong too, I apologize wholeheartedly.

    .

    But as for statements like this… I just don’t see how they apply to Ms. DePape.

    “As for this page argument, good for her. I’m a retired military officer, and the thing I admire the most is rightous courage. And she has it in spades.”

    And neither does Terry Glavin, He makes her out to be a rich little girl with a silver spoon in here mouth… Atleast in comparison to real protesters facing real problems. Remember as you read about Hamza…. It’s Harper that must be stopped. And his vile attack of just standing there and letting the officers of parliament remove her from the room.

  12. Barcs says:

    oops. there I go again talking about a link then not posting it,… sorry.

    http://transmontanus.blogspot.com/2011/06/sound-of-tumbrels.html

    Here is Captain Capitalism on the same topic. He has named it Crusaderism.

    Def: Rich, silver spoon who never had to work for anything choosing 15 minutes of fame crusading against an “Evil” like Bush or Harper rather than doing the work to actually accomplish something that benefits the world or the people in it. In essence the laziest, easiest way to fame and acclaim accomplishing nothing but making you feel like the hero you are not.

    Watch his 10 part series… it fits her to a T.

    http://captaincapitalism.blogspot.com/2010/07/crusaderism.html

  13. Shadow says:

    Barcs the condemnation of the page seems to be nearly universal and includes non-Conservatives like:

    Rob Silver, Jack Layton, Ned Franks, Bob Rae, and Jane Taber.

    Only Michael Moore and Heather Mallik are sticking with her.

    The page in question seems to believe that

    FPTP = Arab dictatorship

    That’s quite the stretch. I know we have people on here who support proportional presentation but I don’t think they’d follow her down that rabbit hole !

    Anyways I think we’ve wasted quite enough time on this kook.

    She’s damaged herself and her prospects, even if she does seems to be enjoying her 15 minutes of fame.

  14. jad says:

    Correct me if I’m wrong, but isn’t the Arab Spring about having FPTP elections ? Or does this girl think the Arabs are holding some kind of proportional representation exercise ?

  15. Wilf Day says:

    Yes, most Arab countries are moving to proportional representation. Iraq has it, Palestine has a half-proportional system, the new Egytian system will be proportional or half proportional, and so on. Jordan has a primitive proportional system copied by the new Afhgan parliament. Mubarak held regular elections but they were FPTP so the divided opposition was badly under-represented; in Egypt the Arab spring was indeed to some degree about proportional representation. It started in Tunisia which again had a half-proportional system like Palestine’s (161 constituency seats, 53 proportional seats, but the 53 were not compensatory), leaving the dominant party over-represented.

  16. Shadow says:

    There’s also a directly elected president in Afghanistan.

    1 man with only 49% of the votes and yet 100% of the seats !!

    THE HORROR.

  17. Robert Viera says:

    Some constituency association returns have been posted on Elections Canada’s website.

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