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  ››  Pundits' Guide

Party Second Quarter Returns Hint at Trends Worth Watching

July 31st, 2012

[Welcome, National Newswatch readers!]

If we're really honest, the federal polls don't mean too much three years out from an election and with still one interim leader, seat projections are an iffy proposition given the pending redistribution and a party system likely still in transition, and most of the financial data we're getting lately can only tell us in great detail what happened last year.

But Monday evening's release of the federal party second quarter fundraising reports hints at a few potential trends in the making. And of course with the looming end of the quarterly public subsidy payments, getting its fundraising machinery into shape is paramount for any political party wanting to challenge the governing Conservatives.

Here's what the reports suggest:

  • The NDP came within $63K of beating the Liberals in second quarter fundraising: $1,743,862.40 to the Liberals' $1,807,092.36. This comes after a first quarter where they were some $337K behind the Liberals, who naturally took full advantage of their competitor's leadership vacuum to try and guarantee a niche of political and financial support for themselves in their new role as the third party.
  • At some $3.74M year-to-date the NDP has raised nearly as much by the end of June as it usually raises in an entire non-election year. For example, this amounts to 86% of the party's best ever non-election year haul of 2010 (then $4.38M). These two developments combined raise the spectre that the NDP might surpass the Liberals in fundraising by the end of December.
  • The Liberals, meanwhile, are succeeding in increasing their numbers of small donors. And while the NDP is also demonstrating some real progress in increasing its number of overall donors over previous non-election years, the Liberals have been able to move and stay ahead of them on that score. (See the "Quarterly Data" tab at the Pundits' Guide "Finances" page for all the details).
  • The Conservatives, on the other hand, are seeing another slip in their numbers of both small donors and overall donors, after last year's push to win a majority government. This did not hurt their overall fundraising take for the moment, as it looks like the party made a big push for "at the limit" contributions of $1,000-$1,200 in the second-quarter including what looks like a very successful push in the Montréal area the first week of June. But every majority government takes a hit as it rolls out the toughest part of its agenda early in its mandate, and no government lasts forever, so if there is to be any early warning sign of a more permanent change in their fortunes, it will show up as a decline in the number of small contributors. Although, we've seen false positives before.
  • The Green Party is not dead yet, as their recent fundraising performance will attest. A healthy second quarter for them seems to be in part the result of prepaid convention fees (lots of $249 contributions showing up), but not exclusively. Unfortunately for them, as we'll see when we review the 2011 annual financial statements in a subsequent post, they have to raise this money in order to repay their election loans.
  • The Bloc Québécois might be on life support, but on the other hand, their usual pattern is to go dormant on the fundraising front when their sister party needs to build up its own provincial warchest. When a federal election was constantly looming, the Bloc stepped up its on-going fundraising, but otherwise typically it did a round of central fundraising at year-end, and otherwise left the field open to its riding associations.

Now, part of what's allowing the NDP to compete with the Liberals are some significant bequests, and they got another one in the second quarter of 2012 — just over $296K from the estate of a William Giesbrecht of Coquitlam, BC, along with another bequest of some $23K from Anne Murray Powell of Toronto, ON. The estate of the late Jack Layton made a $50K bequest in December, 2011 and another $50K in March, 2012, though no further bequests from the party's former leader were recorded this quarter.

But a quick scan of the party donor lists hints at another part of the explanation. With names like Louise Arbour (if it's the same person, once touted as a potential Liberal leader), and that of a former national campaign director for the Green Party showing up on the NDP's return, it suggests the strategic voting / contributing card is being played by the NDP for a change.

[Click on image to open full-sized version]

Contributions (donors over $200 only) by week, by party, 2012 quarterly reports

The biggest NDP bequest shows up on the weekly large donor fundraising timeline along with a late March post-leadership bump, as do the Conservative campaigns to large donors in late January and early June, and the spike in Liberal tallies from their convention in January and again in late March when the Conservatives ran attack ads against their interim leader, Bob Rae. That one Conservative TV ad was worth over $200K in revenue to the Liberals the week it launched, proving that some laws of physics also apply to politics.

The quarterly returns also give us an update on where the NDP Leadership candidates' fundraising efforts got to, after the contest ended.

Directed Contributions to NDP Leadership Contestants (before party tithe), as reported on the party's quarterly financial returns

Cand 2012-Q1
($)
2012-Q2
($)
Total $
(incl 2011)
% of
limit
Mulcair 271,184.14 67,399.85 484,447.43 96.9%
Topp 166,210.97 64,365.00 399,023.10 79.8%
Cullen 220,173.69 7,461.00 313,743.69 62.7%
Dewar 133,143.63 44,766.24 271,840.87 54.4%
Nash 112,978.14 28,161.02 249,362.17 49.9%
Ashton 70,668.06 16,480.00 97,363.06 19.5%
Singh 36,712.38 10,137.15 95,926.53 19.2%
Chisholm 17,305.00 18,550.00 71,255.00 14.3%
Saganash 16,977.77 8,258.55 42,788.42 8.6%
TOTAL 1,045,353.78 265,578.81 2,025,750.27  

Leader Tom Mulcair is said to have paid off all his leadership debts some time ago, and is now doing fundraising events with his former competitors to help pay off theirs. Nathan Cullen is thought not to have had any debt, given that he raised most of his money too late to spend it, and the rest have whittled their debts down to a greater or lesser extent, which we will find out in detail when they file their returns six months after the contest concluded.

Meanwhile amongst the remaining 2006 Liberal Leadership candidates, Hedy Fry did most of the fundraising in the first quarter, but she was joined on a much more active basis by Martha Hall Findley in the second.

NDP Leadership candidates raised about $1.3M all told in the first two quarters, while the 2006 Liberal leadership candidates raised another $68K or so.

40 Responses to “Party Second Quarter Returns Hint at Trends Worth Watching”

  1. Doug Finley says:

    Another excellent presentation and analysis as usual. I expect the NDP will continue strong for a little while yet, the Liberals may get a bounce from leadership.
    The Conservatives will rebound, the issues, so far, tend to favour opposition parties.

  2. Thank you for the comment, Senator Finley. I agree that it’s too early in the four-year mandate to draw any firm conclusions.

  3. Seems to me that the LPC have a natural advantage when it comes to bequests. I know they recently launched a program that should have them raising some serious funds through this method in the years ahead.

  4. Thanks for letting us know about that program, Adam. For those of you who don’t know, Adam is the executive director of the National Liberal Fund (i.e., that party’s chief fundraiser). We’ll be watching to see how well you do, for sure.

    Edited to add: I guess on re-reading his website, that should read the *former* executive director of the National Liberal Fund. Still, very much in the know I’m sure. Thanks again, Adam.

  5. Shadow says:

    The CPC doesn’t really need to rebound all that much.

    Put in the context of a new opposition leader their support is to be expected.

    Both Dion and Ignatieff had the LPC beating the CPC in the polls for a time. We know how that turned out.

    Also the news media is making the silly mistake of talking about a drop in support relative to the last election by comparing current polling to those results.

    However, we all know that the pollsters missed true CPC support on election day.

    Impossible to know how current numbers would translate into actual support on election day.

  6. Shadow says:

    Regarding these numbers i’m struck that the NDP isn’t already beating the LPC in fundraising.

    The Liberals are supposed to be a dying party and the NDP is supposed to be the government in waiting who’s consolidating anti-NDP support.

    Not sure what to make of that. Signs of life for the Liberals?

    This and the x factor of Justin Trudeau will keep things interesting to be sure.

  7. A New Democrat would probably answer you, Shadow, that – if you include the fundraising take from both parties’ leadership candidates – they already are.

  8. George Pringle says:

    Why are there two bequests from Jack’s estate, once a will is done, there should only be one bequest?

    Unless its another attempt by the NDs to bypass the donation laws by setting up a trust that has an regular payout which would not be a regular bequest and limited to max annual donation.

  9. George, I don’t know what the details are, but I imagine it’s something along the lines of giving a percent of the estate, and making interim payments until the value of that percent is known. There is a regular annual contribution by the estate of one gentleman from Calgary to the Conservative Party since 2005, for example, and that one is listed as coming from a fund, although it is for $1,000 per annum.

  10. Shadow says:

    Closing the estate loophole might be a good idea.

    I get the argument that you can’t buy influence once you’re dead but wills can be written far in advance.

    Presumably that is what Adam J. Smith is talking about when he says the Liberals are setting up a program around bequests – trying to get donors to consider leaving the party money.

    If they don’t already have one the other parties are sure to follow suit.

    This is troubling for two reasons.

    One it allows someone who’s still alive to gain influence with a party by offering or being asked to put something in their will.

    Two their family could recieve a similiar benefit, especially if it was their idea to forego an inheritance. In that light a bequest could be seen as an unlimited donation by a still living adult child.

  11. Robin Sears says:

    When is some national news organization going to realize that Alice Funke does what they shd be doing and don’t, and hire the woman!

    One quibble with the analysis, Tory war machine is clearly sputtering since I don’t believe they have had this down a quarter in six years.

    And one OMG:

    Applying the usual Can/US 10/1 rule to US elxn fundraising it is still mind boggling how parsimonious we are or profligate they:

    Obama, Romney and friendly PACs are gunning to raise $2.5-3B in this cycle. That’s not including the additional $2-3B estimated to be raised at Cong/State level. On presidential numbers alone that would mean our three parties to be at par would raise $80-100M, riding campaigns $300K+/cand/ED EACH….

    I wonder how much longer US donors, not to say voters, will put up with such foolishness.

  12. Robin, it’s often occurred to me that the US system has built into itself all kinds of barriers to changing back. For example, I can’t see the economics of all those local TV stations without the regular influx of election advertising revenue.

    As to the Conservatives, I haven’t done my typical “tapped-out” analysis yet (to see how many of their usual donors have hit the annual limit already), but from my cursory review of the donor list, I’d say they loaded up on large donations earlier than usual this time — perhaps once they realized the other numbers were not going to come in where they hoped.

  13. Robin Sears says:

    True TV station owners, not to mention greedy media and research consultants, would bleed. Probably 90% of the spend goes to those three combined.

    That’s why our 1974 era system was so brilliant: no ads b/w writ, assigned numbers of minutes per party per network by negotiation, and price no higher than lowest price charge by nets to best customer that year. Sadly, system destroyed by Chretien,Martin and Harper.

  14. Observant says:

    Money makes the world go round, the world go round!

    Seems like there are still three wells for money to be drawn from… a Con well, a Lib well and a Dip well … and a few dribbles from the Green well too.

    The haunting question is how much can be drawn from the wells in the future if the political water table is falling.

    The Con and Dip wells may hold steady, but if the Libs chose the wrong leader, again, their well may well run dry as support runs to the other wells.

    Who can say today why tomorrow will be yesterday?

  15. DL says:

    I wonder what Obama and Romney would be spending on their campaigns this year if no one in the US was allowed to donate more than $1,200/year to any presidential candidate??? Imagine if Sheldon Adelson was told – sorry Mr. Adelson, we can’t take our $100 million contribution – all you can give us is $1,200 – good day sir!

  16. Teddy Boragina says:

    The gap between second and third is too small for the NDP to be proud.

    The same, however, was true prior to 2011. The facts are that the 2nd and 3rd placed parties, both in the commons and in fundraising, have always been far far closer than people imagine (I can provide stats if needed)

  17. Shadow says:

    DL there is a $5000 dollar individual limit to the campaigns of Obama and Romney.

    America features strong vertical integration so a lot of money goes to state parties with various caps.

    Then there’s organizations for the national parties, the senate, the house, and state level legistlative races as well as a seperate committee for govs.

    So with 5 committees, a campaign, 50 state parties, and over a thousand candidates to donate to its pretty easy to rack up a lot of money.

    Somebody could easily do the same thing in Canada.

    It just seems like none of our rich people care that much.

    The key difference in the rules surrounding third party spending/contributions.

  18. Adam Sobolak says:

    I really wouldn’t get too worked up about the small Lib/NDP margin–after all, even if it’s residual or dead-cat-bouncey at this point, the Grits still have more of a big-ticket, “Bay Street-compatible” rep. And those folks aren’t going to shift to the Harper Conservatives or the incompletely-tested NDP so fast–it isn’t exactly a 1920s Britain situation, especially as long as there’s comparatively healthy provincial wings (most of all, McGuinty’s Ontario).

    Where the drain latently will/ought to be felt isn’t be among the Bay Street Liberals, but among the erstwhile strategic-voting rank-and-file “Buzz Hargrove Liberals”; perhaps especially now with Bob Rae’s official withdrawal from the leadership race dousing some of that Lib rep as an “electable” refuge for ex-NDPers…

  19. Jim Twiss says:

    There is a lot of “noise” in the first two quarters of data, particularly for the NDP and Liberals. Over a third of the NDP contributions were directed leadership contributions (which may negatively impact fundraising in the last two quarters). The $1.3 million raised for the candidates is money not available for party “operations”. For the Liberals, the situation is the reverse as some potential donors may be witholding contributions with the intention of making directed contributions to leadership contenders as the campaign gets underway later in the year. Question: To what extent were NDP contributions “inflated” by fees for the leadership convention at the end of March?

  20. Jamie Masse says:

    Just to clarify this article, Thomas Mulcair still does have a debt of about $60K. The debt has not been paid off as of yet and there is still much work that needs to be done. Yes, Tom has been helping the other candidates, but his debt is still there.

  21. Thanks for letting us know, Jamie. I guess my information was wrong, and it’s good of you to correct it for us.

  22. In response to Shadow 31.07.12, “Pollsters missed true CPC support on election day” Let’s look at that “support”, POP on election day ’11 was 39.6%, previous electoral support 36% give or take. Actually increase on May 2nd’11, 3%. The election was won in swing ridings with swing voters, which some have estimates have tagged to be 6,700 voters. An electoral system which translates small numbers of votes into seats ie. Toronto Eglington, Ortiz won by 26 votes, gave Harper his majority not significant support which the comment ” Pollsters missed true CPC support” alludes to.

  23. Shadow says:

    Sharon parties work within the system that we have.

    The CPC had the greatest financial and volunteer support and used that to target ridings in the GTA and a few other areas in order to win a majority.

    If in the last election we had a proportional representation system in place then those substantial resources would have been directed towards increasing % of popular vote rather than targeting certain ridings.

    It is impossible to say what % of the vote Harper would have gotten in this scenario but without question it would have been HIGHER than 39.6%.

    People are just kidding themselves with these counter factual scenarios constructed by supporters of alternative voting systems who make the mistake of employing static analysis and suggest Harper would have only gotten around 40% of the seats in parliament.

  24. Shadow says:

    My comment actually was literally about pollsters underestimating CPC support in the lead up to the last election and not some broader commentary on Harper’s popular mandate.

    http://en.wikipedia.org/wiki/Opinion_polling_in_the_Canadian_federal_election,_2011

    Most troubling was EKOS and their 33.9% CPC support compared to an actual 39.6%.

    Other than a single crazy Compass poll of 46% CPC support the error was more like 2-3% for the pollsters.

    You can see why the news media is construction a false narrative by misreading stats if they report on a polling outfits new numbers which are unchanged from before and after the election and the headline is:

    “CPC SUPPORT DOWN FROM LAST ELECTION”.

  25. Bob Smith says:

    Jim: “Question: To what extent were NDP contributions “inflated” by fees for the leadership convention at the end of March?

    That’s probably a big part of the story, at least for the big bump in the first quarter – the Liberals experienced a significant revenue bump in the spring of 2009 when they annointed Iggy (almost catching up to the Tories).

    Of course, we have to be careful about looking only at the revenue side of the equation, those convention fees aren’t really the same as donations, since to get them the NDP had to actually host a convention (which isn’t an inexpensive proposition). If you were looking at net-revenue (say the revenue minus the cost of earning that revenue), I suspect the NDP numbers would look pretty different.

    I’m actually surprised that the Liberals are doing as well as they are. Given that they’re the third party in the house and don’t have a leader (or, at this point, any credible candidates for leader) that’s an impressive show of the power of the Liberal brand.

  26. George Pringle says:

    Convention fees being considered 100% donation is a prime example of Elections Canada bureaucrats not only wrongly interpreting the Law but rewriting it. They must think they are the Supreme Court!

    It is a long principle that when a Party or an EDA runs an event, it is only the profit of an event that is a donation. But EC sat on Olympus and ruled that the whole convention fee was a donation without counting for the expenses incurred by a Party.

    A convention center is not free, even the box lunches I got for free was not cheap.

    The real problem is civil servants who violate the Acts (LAWS) they are supposed to follow. EC gets away with it more as any party in government is hesitant taking them to account as they run elections.

    Who do they think they are – Kevin Page?

  27. Ken Summers says:

    At least on this point, I think that is unfair George.

    It isnt profit from an event that determines the line of what is a donation.

    It is whether the donor is getting something in kind. So some value for a meal or T-shirt is subtracted from the donation.

    It isnt whether there is profit, it is whether you are getting something concrete in value- a tangible good or service.

    Us being at a Convention costs the parties lots of money, but in the narrow [but consistent] terms, we aren’t “getting” anything.

  28. George Pringle says:

    Profit is how a donation is dealt with in every other case other than a convention.

    Our candidate in 1996 did a fundraising dinner for a $200 ticket. 400 people showed up. But it cost about $75 per person so the receipt to each person. The cost of the room, meal and speaker was deducted. The same should be done with conventions.

    That is the way it was always done but Elections Canada changed the law by interpretation and the govt needs to rewrite the Act to make it black and white and not open to misintereption.

  29. Ken Summers says:

    The fact that your riding association used profit/costs to come up with the dividing line of what was receiptable does not mean this is or was the Elections Canada.

    Electoral districts are very little audited. You have to be able to account for what you did and reported, but no detail is required- most unlike candidate campaign returns.

    While I am admittedly not certain of it, I beleive that the regulation has always been that if the donor is receiving something of value, that amount has to be deducted from the donation.

    Interpretation is case by case. Somewhere along the line EC must have determined that Convention fees are all donation. I see that as pretty ‘artificial’ and bureaucratic- but it would be wherever you drew the line. And it seems consistent with the law to me. At any rate, it has been like that some time.

    We live in a legalistic/bureaucratic culture. Its not easy to come up with a one size fits all definition of what has value. In this case it happens to be that even a $10 sphagetti dinner at a $100 ticket fundraiser is getting something of value, but attending a costly Convention is not. That fits plenty of other rather arbitrary silliness in our culture: you get to ‘own’ the spaghetti dinner- you don’t ‘own’ or possess anything about the Convention.

  30. George Pringle says:

    Actually, Ken. Having served as the legisation assistant to the CA Critic in charge Election related items and during the C-24 law on donations changes, it’s an Act I had a lot of experience with.

    There is no difference for election and EDA rules.

    The relevant section is:
    408. If a fund-raising activity is held for the primary purpose of soliciting a monetary contribution for a registered party, a registered association, a candidate, a leadership contestant or a nomination contestant by way of selling a ticket, the amount of the monetary contribution received is the difference between the price of the ticket and the fair market value of what the ticket entitles the bearer to obtain.

    Prior to C-24 since there was no donation limits it didn’t matter.

    As the Act was written to include the words “primary purpose of soliciting a monetary contribution” and a convention did not have a primary purpose of getting a donation, the silly situation was created by Elections Canada. I got a tax receipt for over $600 due to their interpretation. The taxpayers subsided my convention attendance.

    There should be sub-section added to make it clear that fees paid for conventions are not contributions.

  31. George Pringle says:

    Alice emailed a section of the Act to me which now deals with the issue.

    (7) For greater certainty, the payment by or on behalf of an individual of fees to attend an annual, biennial or leadership convention of a particular registered party is a contribution to that party.

    S.C. 2003, c. 19, s. 24; S.C. 2006, c. 9, s. 44.

    You find this in C-2 (LEGISinfo) of the first Conservative minority govt (39th Parliament, 1st Session) under amendments to the Canada Elections Act.
    It not in the First Reading or the version passed by the House but is in the Royal Assent (final) version of the Bill. So it had to be an amendment made in the Liberal controlled Senate.

    So it was amended into the Bill by the Opposition a year after the Elections Canada ruling, no doubt as Opposition saw some political advantage in trying to extend the life of this issue.

    This short sighted amendment has probably hurt the Liberals as their convention fee is higher and their consent series of Leadership Conventions cause hard core donors to reach the max and the Party does not get full value for the donation.

    This is how bad laws are made in Canada.

  32. Ken Summers says:

    Thats purely speculation about exactly who is essentially responsible for this being in the final version of the amendment to the Act.

    Maybe someone can dig it out of hearings. Until then, I find it very unlikely the Liberals were responsible. Even in 2006-7 they had known for a few years that further limiting how much larger donations can give disadvantged them the most. They were pretty upset over the changes brought in with the Accountability Act.

    So where is the plausible advantage they would have seen in turning Convention fees into definitely 100% donations?

  33. Ken Summers says:

    Mea culpa George.

    I don’t remember the details, but I do remember that there was a kerfuffle over the Convention fees.

    So I would be the one speculating: how could the Liberals be pushing another limitation on donations from the larger donors, when they already knew that was biting them?

  34. George Pringle says:

    Ken, if you look at LEGisinfo on the parl.gc.ca website, they show what actual Bill passed each stage. The Govt obvious completely writes the First Reading as they introduce the Bill. They show a version after it leaves Committee with amendments. They shou the Third Reading version as it passes the House. They show the Senate version and the House if there are amendments to deal with and the show the new Act after Royal Assent.

    This amendment first appears in the Senate version, the Senate amended it. If the govt wanted it in they would have put it in so the Liberals did, using their Senate majority which they did not have at the House stages.

    The House could have rejected it starting a back and forth battle with the Senate but it was the whole Financial Accountability Act which the PM promised would pass in a 100 days. So they let a minor thing through.

    Why, because the Liberal “braintrust” thought they could bring the Govt down with accusations of breaking the Election Act.

    They were quite wrong but as we see right to today, some things do not change.

  35. George Pringle says:

    In the case of the advertising that unions did during NDP conventions ($344,468) Elections Canada’s letter provided their interpretation.

    “Where a person or entity purchases goods or services from a registered party with the intention of economically benefitting the party, the payment for goods and services will not constitute contributions to the extent that the payment reflects the fair market value of the goods and services purchased. Any amount of the payment above the fair market value will constitute a contribution if the person purchasing the good and service intended to benefit the party,”

    Perhaps the question of the fair market value was determined to be zero because unions have forced membership and it’s not as if one could see an ad and think “I’ll think I’ll join.”

    But what if MacDonald advertised during the next Liberal Leadership Convention? If the paid the same price for signage as they do for a televised Senators game? There would be proof of the fair market value?

    I bet Elections Canada would still find a way to “interpret” this to be a violation.

  36. George, re-read the story.

    http://www.thestar.com/news/canada/politics/article/1247176–ndp-returned-344-468-in-advertising-income-after-conservatives-complained-to-elections-canada

    The letter you’ve quoted above was from 2003-2004 after the new law came into effect. The NDP was citing it in support of their belief that they were in compliance with the law in their acceptance of market value advertising dollars. Since then, Elections Canada has ruled that any advertising constitutes a contribution, while earlier they had clearly written that only ad revenue in excess of fair market value did.

    You can see why the NDP might feel hard done by, when a ruling that like would change. But, they sucked it up and paid the money back rather than pay legal fees to argue their side of it.

    Also, the $344,468 was from unions and companies, to be accurate, and covered 3 conventions.

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