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Posts Tagged ‘Party Finance’

Conservatives defy expectations; post blow-out second quarter fundraising

July 31st, 2013 | 52 Comments

[Welcome, National Newswatch readers!]

The Conservative Party, battered in the media, continues to be an institution worthy of investing in — at least according to its own financial contributors, as the party posted a very robust non-election year second quarter in 2013.

Raking in $4.86M between April and June of 2013 – a period that would have included registration for the party's subsequently postponed Calgary convention – the party defied expectations and beat nearly every other second quarter in its history, with only the spring of 2005 and election year 2011 coming in higher, according to figures filed late yesterday with Elections Canada.

[Click on graph to view all quarterly reports on the Pundits' Guide Finances page.]

Quarterly Fundraising by Party, to Q2-2013

The only concerning news for the governing party is that its number of second quarter donors is down somewhat over time (to 25,817 this year from 32-34K-ish in earlier non-election year Q2s).

However, the party appears to have promoted those small donors to bigger donors, as the number of contributors over $200 in the second quarter is at an all-time non-election year high of 4,616. And the average contribution size of their large donors has also increased over time, sitting at a record non-election second-quarter high of $582.74 for the Conservatives.

This could suggest the party "tapped out" its biggest donors early in the year (i.e., encourged them to give the annual limit early) in order to avoid the bad publicity of a poor second quarter total. If so, the rest of the year will need to be devoted to acquiring new donors to keep pace. I'll do a tapped-out analysis for a subsequent post, to assess the validity of that possibility.

Meanwhile the NDP continues to post substantially better results than were the norm for them in third party days; a fact that will no doubt be overlooked in the short-term comparisons of their party against a resurgent Liberal Party in the throes of a honeymoon with its new leader.

We've seen this story before in 2009, but by that measure Trudeau-mania 2.0 has not yet surpassed Iggy-mania. The Liberals' $2.96M total in 2013 stands respectably though a bit behind their $3.88M haul in 2009, but is still their third-highest second quarter since quarterly returns have been filed.

The NDP raised less than half that amount, coming in at  $1.37M. This figure is down for them from the heady days of 2011 and 2012, but does represent nearly double their typical second quarter from prior to that.

The Bloc Québécois is soldiering along with a not atypical $70K second quarter for them. The party to watch though may be the Green Party, which continues to post improving results, and recently posted a job for a chief fundraiser on the charityvillage.ca website.

Conservatives sitting on $7 million nest-egg, and a $7 million surprise

July 4th, 2013 | 22 Comments

[Welcome, National Newswatch readers!]

The Conservative Party has been able to set aside roughly one-third of their national expense ceiling for the next election, putting $7.1 million into guaranteed investment certificates of 1- to 2-years maturity last year according to their 2012 annual financial statements.

But the governing party is also sitting on a mystery project it's pumped another $7.1 million into over the last three years – $2.17M in 2010, $3.4M in 2011, and a further $1.74 in 2012.

Labelled an "asset under development", an accounting term used for such items as large-scale software projects still being completed, the project is listed as an "intangible asset" of the party — and between it and the GICs, the Conservatives find themselves asset-rich but cash-poor in the short-term.

We first learned of the project in the party's 2010 financial statements, and speculated at the time that it could be an investment in a web-based replacement for CIMS ("Son of CIMS"?) or perhaps a data warehouse and data mining project to analyze CIMS data, or possibly a geospatial information system (GIS) mapping application to analyze redistribution and other data to assist with targeting. (CIMS = "Constituent Information Management System")

Recent work out of the University of Oxford, however, points to the likelihood of IT projects either going south or running over-budget (18% run 200% or more of initial estimates), an estimate that was found not to differ between the private and public sectors.

Which means the Conservative are either sitting on "da bomb" or a "black swan", but they at least have another year or so to get it ready for the pre-election period. The notes to their financial statements say that it won't start to accumulate depreciation until it's put into service, or else suffers an "impairment". So far, so good.

Apart from that, the Canadian Press noted in their story last night that the Conservatives' fundraising pace is not keeping pace with the sum of their opponents' efforts. That may be true, but it's not their only concern. Comparing 2012 with the last non-election year of 2010, the governing party was still collecting roughly the same amount of money, but from 7,700 fewer donors. Given we've learned from Glen McGregor at Postmedia that one of their major vendors, RMG, has stopped doing donor acquisition calls for the party, that figure is not surprising, though it's undoubtedly of concern to them.

Selected Financial Metrics, by Party, 2010-12 Fiscal Years

Metric Party 2010 2011 2012 2010-to-12
Net Assets Cons $7.31M $5.80M $12.0M + $4.69M
Lib $4.59M $5.05M $7.96M + $3.37M
NDP $5.67M $958K $2.88M - $2.79M
Grn $164K $469K $1.25M -+$1.09M
BQ $2.09M $1.53M $2.09M
 
Working Capital Cons $4.50M -$128K -$1.44M - $5.94M
Lib $3.83M $4.33M $7.33M + $3.50M
NDP $711K -$5.09M -$2.31M - $3.02M
Grn $137K $453K $1.24M + $1.10M
BQ $2.09M $1.53M $2.14M + $500K
 
Total Revenue Cons $29.22M $46.90M $28.31M - $921K
Lib $15.76M $31.46M $15.87M + $110K
NDP $9.73M $29.13M $16.8M + $7.07M
Grn $3.25M $4.26M $2.70M - $550K
BQ $3.61M $4.18M $1.88M - $1.73M
 
Annual Budget Cons $22.35M $48.41M $22.08M - $252K
Lib $14.18M $31.0M $12.96M - $1.22M
NDP $7.48M $34.03M $15.1M + $7.62M
Grn $2.52M $3.96M $1.92M - $600K
BQ $1.74M $4.74M $1.28M - $460K
 
Operating Surplus Cons $6.87M -$1.51M $6.22M - $650K
Lib $1.58M $460K $2.92M + $1.34M
NDP $2.43M -$4.89M $1.93M - $500K
Grn $723K $305K $782K + $59K
BQ $1.11M -$557K $605K - $505K
 
Debt Outstanding Cons
Lib $3.78M
NDP $696K $5.12M $3.09M + $2.39M
Grn $23K - $23K
BQ
 
Net Transfers Out Cons $2.23M $3.39M $1.82M - $410K
Lib $315K $3.34M $1.68M + $1.37M
NDP $791K $2.02M $859K + $68K
Grn $315K $587K $364K + $49K
BQ $620K $1.53M $5.6K - $614K
 
Contribs Cons $17.42M $22.74M $17.26M - $160K
Lib $6.40M $10.12M $8.17M + $1.77M
NDP $4.36M $7.43M $7.67M + $3.31M
Grn $1.29M $1.71M $1.70M + $410K
BQ $642K $789K $434K - $208K
 
# of Donors Cons 95,010 110,267 87,306 - 7,704
Lib 32,448 49,650 44,466 + 12,018
NDP 22,807 37,778 43,537 + 20,730
Grn 8,961 12,590 9,532 + 571
BQ 5,685 7,056 4,292 - 1,393
 
Avg Contrib Cons $183.32 $206.21 $197.67 + $14.35
Lib $197.31 $203.82 $183.66 - $13.65
NDP $191.3 $196.6 $176.19 - $15.11
Grn $144.15 $136.17 $178.09 + $33.94
BQ $112.86 $111.89 $101.18 - $11.68

Meanwhile, the Liberals were pro-actively trying to tell their story in advance of their report's release, noting that while their fundraising was down year over year, they actually showed growth over 2010; and also pointing out that their performance was the "best of any third party since the new rules came into effect".

Indeed, the Liberals did move up smartly between 2010 and 2012 by $1.77M (a 27.7% increase). But not as much as the former third party to which they were implicitly comparing themselves, the NDP, which gained not only over the last non-election year in 2010, but even over the election year of 2011. The orange team raised a quarter million more in 2012 than 2011, and fully $3.31M more than 2010 (a 75.9%) increase. While the Liberals added 12,000 donors since 2010, the NDP added 20,700.

Of course the Dippers needed to, because they continued to have the only remaining post-election debt to service: $3.09M of their original $5.09M loan from the Van City Savings Credit Union was still on their books on Dec 31, being paid off at a rate of $2M annually. The Liberals, by contrast, are sitting on $7.33M in liquid assets ("working capital") and nearly $8M overall. What we don't know is whether those resources are sitting in the PTAs or headquarters, since the party did not share separate financial statements for the Federal Liberal Agency again this year, unlike in 2010.

Because the NDP owns its own building, one thing it doesn't have to pay for is rent. That didn't stop it from spending $15.1M in 2012, mainly on increased fundraising capacity, salaries and travel, but that figure was down fully $19 million from 2011, as was Liberal Party spending over the same time-period. The Conservatives slashed spending even more dramatically; down $26.4M from a year earlier. These amounts represent the cost of election and pre-election expenses incurred in 2011, of course, but also the amount the parties will have to accumulate before October 2015, this time without the full aid of the public subsidy.

The smaller parties are coping with the new reality by paying off debt (Greens), liquidating assets (BQ), cutting back expenses (both), deregistering EDAs (Greens), setting up reserved election funds (BQ), and loaning money to their riding associations to run by-elections instead of gifting it in a transfer (Greens). The Green Party maintained more or less its 2011 fundraising pace in 2012, while the Bloc showed a decline in both amounts, donors, and average donation size, meaning they are neither promoting small donors to larger ones, nor acquiring new donors, but simply hanging on for better days ahead. (EDA = "electoral district association", aka riding association)

Given the amount of cutting in line items on the Conservative's income and expense statement, it's hard to see where they would hide a "secret million dollar fund for the PMO". But I'm told by staffers in former PMOs that the chief of staff was always the person who decided which expenses were government ones and which to forward to the party, and he or she authorized such payments to be made by one body or the other. The line item for "Tour", which I'm told would be the major category of such spending, only comprised $11,226 in 2012, and only $8,186 was spent in total on polling, but other PMO expenses might be included under "Travel and Hospitality" and a few other spots. Take a look for yourself.

Given I didn't write about the 2011 annual party statements last year, I've consolidated the metrics into a 3-year comparison table above, but here for continuity are the usual yearly tables of Selected Financial Metrics you've come to expect.

Selected Financial Metrics, by Party, 2012 Fiscal Year

  Lib NDP Grn BQ Cons
 
Net
Assets
$7.96M $2.88M $1.25M $2.09M $12.0M
Working
Capital
$7.33M -$2.31M $1.24M $2.14M -$1.44M
Total
Revenue
$15.87M $16.8M $2.70M $1.88M $28.31M
Annual
Budget
$12.96M $15.1M $1.92M $1.28M $22.08M
Operating
Surplus
$2.92M $1.93M $782K $605K $6.22M
Debt
Outstanding
$3.09M
Net Transfers
Out
$1.68M $859K $364K $5.6K $1.82M
Contribs $8.17M $7.67M $1.70M $434K $17.26M
# of Donors 44,466 43,537 9,532 4,292 87,306
Avg Contrib $183.66 $176.19 $178.09 $101.18 $197.67

 

Selected Financial Metrics, by Party, 2011 Fiscal Year

  Lib NDP Grn BQ Cons
 
Net
Assets
$5.05M $958K $469K $1.53M $5.80M
Working
Capital
$4.33M -$5.09M $453K $1.53M -$128K
Total
Revenue
$31.46M $29.13M $4.26M $4.18M $46.90M
Annual
Budget
$31.0M $34.03M $3.96M $4.74M $48.41M
Operating
Surplus
$460K -$4.89M $305K -$557K -$1.51M
Debt
Outstanding
$3.78M $5.12M
Net Transfers
Out
$3.34M $2.02M $587K $1.53M $3.39M
Contribs $10.12M $7.43M $1.71M $789K $22.74M
# of Donors 49,650 37,778 12,590 7,056 110,267
Avg Contrib $203.82 $196.60 $136.17 $111.89 $206.21

 

Selected Financial Metrics, by Party, 2010 Fiscal Year

  Lib NDP Grn BQ Cons
 
Net
Assets
$4.59M $5.67M $164K $2.09M $7.31M
Working
Capital
$3.83M $711K $137K $2.09M $4.50M
Total
Revenue
$15.76M $9.73M $3.25M $3.61M $29.22M
Annual
Budget
$14.18M $7.48M $2.52M $1.74M $22.35M
Operating
Surplus
$1.58M $2.43M $723K $1.11M $6.87M
Debt
Outstanding
$696K $23K
Net Transfers
Out
$315K $791K $315K $620K $2.23M
Contribs $6.40M $4.36M $1.29M $642K $17.42M
# of Donors 32,448 22,807 8,961 5,685 95,010
Avg Contrib $197.31 $191.30 $144.15 $112.86 $183.32

FINAL UPDATE: Amended Glover return shows cabinet hopeful overspent in 2011

June 21st, 2013 | 27 Comments

Shelly Glover's amended financial return from the 2011 general election has now been posted on the Elections Canada website, and it reports over spending of 2.76% of the expense ceiling for her Saint Boniface, MB riding in that campaign.

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

Saint Boniface, MB Conservative M.P. Shelly Glover's revised Election Campaign return (Part 3a)

UPDATE: Actually Glen McGregor & Stephen Maher of the Ottawa Citizen and Postmedia first reported the Glover-Bezan disputes, while Laura Payton of CBC first reported the Watson case. My apologies to the storied, award-winning journos.

FURTHER UPDATE: And they update the story themselves now here.

After the CBC's Laura Payton it was first reported that Glover, along with Conservative MPs James Bezan (Selkirk-Interlake, MB) and later Jeff Watson (Essex, ON) were involved in a dispute with Elections Canada finance officials over their costing of used signs on their campaign returns, and that Chief Electoral Officer Marc Mayrand had taken the unprecedented step of writing to the Commons Speaker about Glover and Bezan's unwillingness to file amended returns, pressure had been building in the Commons for the Speaker to table this CEO's letters, and decide what action to take in response.

When Speaker Andrew Scheer finally ruled on the Liberals' point of privilege Tuesday before the Commons rose, he also revealed that Glover had filed the amended return as requested, and had withdrawn her court proceedings against Elections Canada, slated for a court date yesterday.

However, Glover's amended return did not appear on the Elections Canada website for several days. It's there now, though.

At issue between Elections Canada and the MPs was their campaigns' decision to account for used signs at a discounted cost, rather than at their replacement cost. The latter is being insisted on by Elections Canada, because the purpose of an expense ceiling is to level the playing field between candidates by costing goods and services at the market value – i.e., the same price anyone else would pay for an equivalent value to the campaign.

The definition of an "Election Expense" is contained in s.407 of the Elections Act:

s.407 – (1) An election expense includes any cost incurred, or non-monetary contribution received, by a registered party or a candidate, to the extent that the property or service for which the cost was incurred, or the non-monetary contribution received, is used to directly promote or oppose a registered party, its leader or a candidate during an election period.

Exclusions – certain fund-raising and nominations

(2) Expenses for a fund-raising activity and expenses to directly promote the nomination of a person as a candidate or as leader of a registered party, other than expenses referred to in paragraph (3)(a) that are related to such fund-raising and promotional activities, are not election expenses under subsection (1).

Inclusions

(3) An election expense referred to in subsection (1) includes a cost incurred for, or a non-monetary contribution in relation to,

  • (a) the production of advertising or promotional material and its distribution, broadcast or publication in any media or by any other means;
     
  • (b) the payment of remuneration and expenses to or on behalf of a person for their services as an official agent, registered agent or in any other capacity;
     
  • (c) securing a meeting space or the supply of light refreshments at meetings;
     
  • (d) any product or service provided by a government, a Crown corporation or any other public agency; and
     
  • (e) the conduct of election surveys or other surveys or research during an election period.
     

Definition of "cost incurred"

(4) In subsection (1), "cost incurred" means an expense that is incurred by a registered party or a candidate, whether it is paid or unpaid.

Here's how the Political Financing Handbook for Candidates and Official Agents describes the procedure for recording election expenses:

Expenses include:

  • amounts paid
  • liabilities incurred
  • the commercial value of donated property and services (other than volunteer labour)
  • the difference between an amount paid or liability incurred and the commercial value of the property or services (when they are provided at less than their commercial value)

The official agent has to report the amount charged to the campaign for an electoral campaign expense. Generally this amount is the commercial value of the property or service received.

Commercial value is the lowest amount charged at the time that it was provided for the same kind and quantity of property or service or for the same use of property or money by:

  • the person who provided it (if the person who made the contribution is in that business)
  • another person who provides that property or service on a commercial basis in the area (if the person who made the contribution is not in that business)

Commercial value is generally the amount charged in a store for an item or a service.

If the campaign purchases a property or service from an individual for less than the commercial value, the official agent has to report the difference as a non-monetary contribution from the individual.

A closer look at the declaration of Election Expenses on Part 3a of Glover's amended financial return shows that, indeed, two discounts (see red boxes in the graphic above) for the value of "Other Advertising" have now been recorded:

  1. one in the amount of $2,195.53 from the riding association (all good), and
  2. a second in the amount of $1,049.04 from Glover personally, which could have created a whole new problem for her, if that contribution put her over her own contribution ceiling to ridings and candidates for the year.

But candidates are allowed to contribution an additional $1,000 + inflation factor ($1,200 now) to their own campaign over and on top of that ceiling, and since Glover did not, she's in the clear on that one at least.

With the total discounts of $3,243.57 added to the previously reported spending of $81,426.71, that brings her return up to $84,670.28  – $315.68 in declared election campaign expenses that were found NOT to be under the ceiling (see blue boxes in graphic above), for a revised total of $84,354.60 in election expenses covered by the ceiling — and exceeding that $82,086.99 ceiling by $2,267.61 or 2.76%.

So, what happens now? That's up to the Commissioner of Elections and if he so decides to refer the case, the Director of Public Prosecutions. Exceeding the campaign expense ceiling can be (for either the candidate or the official agent):

  • a simple matter of a compliance agreement or exchange of correspondence, if done unwittingly and in good faith,
  • a strict liability offence under s.497(1) of the Elections Act subject to a summary conviction and a fine of up to $1,000 or up to three months in jail or both,
  • an offence requiring intent under s.497(3) subject to a summary conviction and a fine of up to $2,000 or up to one year in jail or both, or
  • an offence requiring intent under s.497(3), but subject to an indictment, and therefore a fine of up to $5,000 or up to five years in jail or both

The issue for Bezan and Watson now is that, with Glover's campaign having accepted the ruling from the Chief Electoral Officer, it may be harder for them to make their own cases in court in July and September respectively. Time will tell.

Meanwhile, as former Mulroney-era PMO chief of staff David McLaughlin noted on Twitter, Glover was probably in some hurry to clean up the outstanding issue, in order to qualify for consideration in the upcoming cabinet shuffle. A pretty good incentive, one might say, so long as it was clear which of the above four options the Commissioner of Elections intended to pursue.

Understanding Peter Penashue’s revised election campaign return

March 22nd, 2013 | 45 Comments

[Welcome, National Newswatch readers!]

There has been some fantastic reporting on the case of the financing and election expenses of the Peter Penashue Conservative campaign in Labrador, but an awful lot of misinformation elsewhere in the media as well about the details of the case.

So here's a briefing note, Pundits' Guide-style, on the law, on how to read his financial returns, and a little on what may come next.

I would say that the popular (mis-) understanding of the story at this point is that "Peter Penashue overspent on his campaign by accepting $40,000 in illegal donations, and had to pay it back, and we're just waiting for some kind of Elections Canada report to come down, to know what happens next".

There are a lot of factual errors in that statement. For one thing, illegal donations on the one hand, and election overspending on the other, are two different issues. If Candidate X incurs tens of thousands of dollars flying around the riding, so long as its cost was under the campaign ceiling or was for his or her own travel as a candidate, no problem – as long as it was accounted for at commercial value.

Whether the money to pay for it came from eligible contributions to his candidate campaign, from funds transferred in to the candidate's campaign from the local party riding association, or funds transferred in from party headquarters, it doesn't matter. If they couldn't raise the money locally to cover the cost, they could always just ask party headquarters to transfer in some funds. This happens a lot with those big northern remote ridings, which are expensive to travel across, and usually have a low average income so are hard to raise money in.

Ineligible Contributions

Here's what the Elections Act says on contributions:

Ineligible contributors

404. (1) No person or entity other than an individual who is a citizen or permanent resident as defined in subsection 2(1) of the Immigration and Refugee Protection Act shall make a contribution to a registered party, a registered association, a candidate, a leadership contestant or a nomination contestant. [emphasis mine]

Return of contributions

(2) If a registered party, a registered association, a candidate, a leadership contestant or a nomination contestant receives a contribution from an ineligible contributor, the chief agent of the registered party, the financial agent of the registered association, the official agent of the candidate or the financial agent of the leadership contestant or nomination contestant, as the case may be, shall, within 30 days after becoming aware of the ineligibility, return the contribution unused to the contributor or, if that is not possible, pay the amount of it or, in the case of a non-monetary contribution, an amount of money equal to its commercial value, to the Chief Electoral Officer who shall forward that amount to the Receiver General. [again, emphasis mine]

Contributions by corporations – or by what in this case seem to have been some individuals signing corporate cheques to make their contributions and other cases of a single corporate cheque purporting to cover several individual contributions – are "ineligible" under the Act.

(As are union contributions – though we note with a sigh that some Conservatives in the House of Commons are referring to these corporate donations sweetly as "ineligible contributions", but the sponsorships at the NDP convention which were afterwards deemed to be union donations less sweetly as "illegal contributions"; sauce for the goose is sauce for the gander and all that).

Now if someone has received an "ineligible contribution" as an official agent for a candidate, or chief agent for a party, they have to pay it back within 30 days of becoming aware of its ineligibility. And they can choose to (or in some cases have to) pay the money to the Receiver General of Canada instead – including the commercial value of any non-monetary contribution.

If you want to follow along on Mr. Penashue's return at the Elections Canada website for the next bit, it's about a 20-step process to get to the table of contents of the various parts of his return (or you could just click here), but once you get there, make sure you (a) already selected by candidate's details, (b) select 'Data as reviewed by Elections Canada …' if not selected already, and then (c) pick the relevent section.

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

In the Penashue case, we can look at Part 2a of his revised financial return ("as reviewed by Elections Canada"), and see that the official agent declared a total of $28,360.14 in eligible contributions from 42 eligible donors. [You can find that yourself - I'm not showing the names of citizens who contributed to our democracy in good faith and whose donations have been deemed eligible.]

But in Part 2c of that return, we find the list of 28 ineligible contributions (both monetary and non-monetary) totalling $46,560.54, and note that the first 27 monetary contributions worth $27,850 were paid back to the Receiver-General through the CEO on November 28, 2011, while the non-monetary contribution of $18,710.54 from Provincial Airlines Limited/Innu Mikun Ltd., on line 28, was paid out on March 4, 2013.

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

So, ineligible contributions were accepted during the campaign, and were later repaid via the Chief Electoral Officer to the Receiver-General for Canada, per s.404(2) of the Act. Not great, but so far so good.

The legal questions on the contributions side, though, are whether the official agent "knowingly" accepted ineligible contributions, whether he colluded to hide the true source of any of those donations, etc., etc. These are evidentiary questions for the Commissioner of Elections, who is still investigating, and once concluded will forward a recommendation to the Director of Public Prosecutions (DPP) for a decision on whether charges should be laid, and against whom.

Also, anyone making a contribution on behalf of someone else would have committed an offence, or anyone who colluded to hide the source of a donation. Again, an evidentiary issue about which we could speculate endlessly, but is up to the Commissioner of Elections to investigate properly and thoroughly, collect up all the evidence, and then perhaps recommend to the DPP that charges be laid.

Exceeding the Expense Limit

Moving to the other side of the ledger, here's what the Act says about candidate expenses and a candidate's expense ceiling:

Candidate's expenses for electoral campaign

406. An electoral campaign expense of a candidate is an expense reasonably incurred as an incidence of the election, including

  • (a) an election expense;
  • (b) a personal expense; and
  • (c) any fees of the candidate's auditor, and any costs incurred for a recount of votes cast in the candidate's electoral district, that have not been reimbursed by the Receiver General.

Election expenses

407. (1) An election expense includes any cost incurred, or non-monetary contribution received, by a registered party or a candidate, to the extent that the property or service for which the cost was incurred, or the non-monetary contribution received, is used to directly promote or oppose a registered party, its leader or a candidate during an election period.

….

Definition of "cost incurred"

(4) In subsection (1), "cost incurred" means an expense that is incurred by a registered party or a candidate, whether it is paid or unpaid. [emphasis mine]

S.C. 2003, c. 19, s. 26.

….

Personal expenses of a candidate

409. (1) Personal expenses of a candidate are his or her electoral campaign expenses, other than election expenses, that are reasonably incurred in relation to his or her campaign and include

  • (a) travel and living expenses; [emphasis mine]
  • (b) childcare expenses;
  • (c) expenses relating to the provision of care for a person with a physical or mental incapacity for whom the candidate normally provides such care; and
  • (d) in the case of a candidate who has a disability, additional personal expenses that are related to the disability.

….

Prohibition – expenses more than maximum

443. (1) No candidate, official agent of a candidate or person authorized under paragraph 446(c) to enter into contracts shall incur election expenses in an amount that is more than the election expenses limit calculated under section 440.

Prohibition – collusion

(2) No candidate, official agent of the candidate, person authorized under paragraph 446(c) to enter into contracts or third party, within the meaning given that expression by section 349, shall collude with each other for the purpose of circumventing the election expenses limit calculated under section 440.

As you can see, expenses can be paid or unpaid. Candidate expenses can be either election expenses or personal expenses, but only the former are subject to the expense ceiling. Candidate travel is a personal expense that doesn't fall under the ceiling, but non-candidate travel is an election expense.

Note that the expenses in question in Mr. Penashue's case have to do with candidate versus non-candidate travel. We can look at Part 3a, which is the expense portion of his amended return, and see the problematic expense on line 83.

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

$19,869.56 in Candidate's personal expenses (which includes candidate travel) + $5,840.98 in Miscellaneous expenses (including non-candidate travel) = $25,710.54 in travel services that were purchased from Provincial Airlines/Innu Mikun, for which $6,000 + $1,000 was the agreed final price, including a $18,710.54 discount from their commercial value. As of when the return was filed, $1,000 of the $7,000 was still owing to the airline as an Unpaid Claim from the campaign.

Now, note further that the airfare discount of $18,710.54 on line 83 of Part 3a is also recorded as an ineligible contribution on Part 2c, and shows there as having been paid back to the Chief Electoral Officer for the Receiver-General on March 4 of this year. All good, so far as it goes.

But also note that the amount of the non-candidate travel – the $5,840.98 with the red circle around it on line 83 of Part 3a – when added to Penashue's other election expenses, puts his total Election Expenses subject to the Limit up to $89,997.85.

Looking at Part 4 of his return (the Campaign Financial Summary) we see from line 3 that, for candidates in Labrador riding in the 2011 election, the Permitted limit of election expenses (aka the "ceiling" or the "expense limit") was $84,468.09.

So Penashue is now $89,997.85 – $84,468.09 = $5,529.76 over the limit. Or, another way of saying the same thing is that his election expenses now represent 106.55% of the limit, in order words 6.55% over the limit, and thereby violating s.443 of the Act.

Role and Responsibility of the Official Agent vs the Candidate

A Candidate isn't the one who accepts donations. The candidate's Official Agent is. And in one of those typical anomalies in the Elections Act, which the Chief Electoral Officer has recommended that Parliament amend, if the official agent screws up on filing the candidate's return – then he or she is the one to go to jail, not the candidate.

Here's what the Act says about official agents:

Duty of official agent

436. The official agent of a candidate is responsible for administering the candidate's financial transactions for his or her electoral campaign and for reporting on those transactions in accordance with the provisions of this Act.

[Also, no person (or entity) other than an official agent shall: s.438(2) accept contributions to the candidate's campaign, (3) issue tax receipts to contributors to that campaign, or (4) pay expenses, except for petty cash and candidate's personal expenses.]

[And only an official agent or the candidate shall: s.438(5) incur campaign expenses, or (6) pay the candidate's personal expenses [which includes candidate travel, but not family or staff travel, a point we'll return to in a second].

Offences

Here is a list of some of the technical offences you can commit under the s.497(1) of the Act as an Official Agent, on what's called a "strict liability" basis (i.e., if you did it, you did it, whether you meant to or not) which can result in a "summary conviction" instead of an indictment:

[Note: there are a lot of them, so you can just skip over them to read about the punishments, if you like.]

  • 497 (1) (r) being an official agent, contravenes section 437 (failure to satisfy bank account requirements);
  • (s) being an official agent, a candidate or a person authorized under paragraph 446(c), contravenes subsection 439(2) (incurring more than maximum allowed for notice of nomination meetings) or subsection 443(1) (exceeding election expenses limit) or, being an official agent, candidate, person authorized under paragraph 446(c) or a third party, contravenes subsection 443(2) (colluding to circumvent election expense limit);
  • (t) being an official agent, contravenes subsection 445(1) (failure to pay recoverable claim in timely manner);
  • (u) being an official agent, contravenes subsection 451(1), (2), (3) or (4) (failure to provide electoral campaign return or related documents);
  • (u.1) being an official agent, fails to comply with a requirement of the Chief Electoral Officer under subsection 451(2.2);
  • (v) being a candidate, contravenes subsection 451(5) (failure to send declaration re electoral campaign return to agent);
  • (w) being an official agent, contravenes section 452 (failure to pay value of contribution that cannot be returned);
  • (x) being an official agent, contravenes section 455 (failure to provide updated electoral campaign return or related documents);
  • (y) being an official agent, contravenes paragraph 463(1)(b) (providing incomplete electoral campaign return);
  • (z) being an official agent, contravenes subsection 472(2) or section 473 (failure to dispose of surplus electoral funds);
  • (z.1) being a registered agent or financial agent, contravenes section 476 (improper or unauthorized transfer of funds);
  • (z.2) being an official agent, contravenes subsection 478(2) (failure to return unused income tax receipts);
  • (i.3) being a person who is authorized to accept contributions on behalf of a registered party, a registered association, a candidate, a leadership contestant or a nomination contestant, contravenes section 404.4 (failure to issue receipt);

There are other "strict liability" offences that apply to everyone in Canada, not just official agents.

  • 497 (1) (i) being a person or entity, contravenes subsection 404(1) (making contribution while ineligible);
  • (i.4) being a person or entity, contravenes subsection 405.2(1) (circumventing contribution limit);
  • (i.5) being a person or entity, contravenes subsection 405.2(2) (concealing source of contribution);
  • (i.6) being an individual, contravenes section 405.3 (making indirect contributions);
  • (i.7) being a person authorized under this Act to accept contributions, contravenes section 405.4 (failure to return or pay amount of contribution);

But there's also another class of offences, which "require intent", and could be either summary convictions or indictable offences (note the use of the words "wilfully" or "knowingly").

Some apply to official agents, while others apply to anybody:

  • 497 (3) (f.12) being a person who is authorized to accept contributions on behalf of a registered party, a registered association, a candidate, a leadership contestant or a nomination contestant, wilfully contravenes section 404.4 (failure to issue receipt);
  • (f.13) being an individual, wilfully contravenes subsection 405(1) (exceeding contribution limit);
  • (f.14) being a person or entity, knowingly contravenes subsection 405.2(1) (circumventing contribution limit);
  • (f.15) being a person or entity, knowingly contravenes subsection 405.2(2) (concealing source of contribution);
  • (f.16) being a person entitled to accept contributions under this Act, contravenes subsection 405.2(3) (knowingly accepting excessive contribution);
  • (f.161) being a person or entity, knowingly contravenes subsection 405.2(4) (entering prohibited agreement);
  • (f.162) being a person or entity, contravenes subsection 405.21(1) (soliciting or accepting contribution);
  • (f.163) being a person or entity, contravenes subsection 405.21(2) (collusion);
  • (f.17) being an individual, wilfully contravenes section 405.3 (making indirect contributions);
  • (f.18) being an individual, wilfully contravenes section 405.31 (exceeding cash contribution limit);
  • (f.19) being a person authorized under this Act to accept contributions, wilfully contravenes section 405.4 (failure to return or pay amount of contribution);
  • (p) being an official agent, a candidate or a person authorized under paragraph 446(c), wilfully contravenes subsection 443(1) (exceeding election expenses limit);
  • (q) being an official agent, a candidate, a person authorized under paragraph 446(c) or a third party, contravenes subsection 443(2) (colluding to circumvent election expenses limit);
  • (r) being an official agent, wilfully contravenes subsection 451(1), (2), (3) or (4) (failure to provide electoral campaign return or related documents);
  • (r.1) being an official agent, wilfully fails to comply with a requirement of the Chief Electoral Officer under subsection 451(2.2);
  • (s) being a candidate, wilfully contravenes subsection 451(5) (failure to send electoral campaign return declaration);
  • (t) being an official agent, wilfully contravenes section 452 (failure to pay value of excess contribution);
  • (u) being an official agent, wilfully contravenes section 455 (failure to provide updated electoral campaign return or related documents);
  • (v) being an official agent, contravenes paragraph 463(1)(a) or knowingly contravenes paragraph 463(1)(b) (providing electoral campaign return containing false or misleading statement or one that is incomplete);

Punishments

According to s.500(1), conviction of a "stricty liability" offence like those in s.497(1) would result in a summary conviction having a punishment of up to three months in jail or a fine of up to $1,000, or both.

But under s.500(5), conviction of an offence "requiring intent" with a dual procedure like those in s.497(3) could result in either: (a) a summary conviction with a punishment of up to a year in jail or a fine of up to $2,000, or both, or (b) an indictment with a punishment of up to five years in jail or a fine of up to $5,000 or both.

And if the offence is a serious one, then under s.501(1), the court is empowered to make any other orders to bring them in compliance with the Act, or make compensation, perform community service, and so forth.

Finally, under s.502(1)(c), if a candidate or official agent "wilfully contravenes section 443 (exceeding election expenses limit)", then that's called an "Illegal practice" and under s.502(3) the person is prevented from being elected to or sitting in the House of Commons for five years, in addition to any other punishment.

To Recap

Exceeding the spending limit is the charge that finally stuck to the Conservative Party in the so-called in-and-out advertising case. They faced charges on the more serious offences, and while charges were dropped against the individuals, the party paid the maximum fine.

In this case, we do not know what evidence there is of "wilfully" or "knowingly" accepting ineligible donations, or incurring election expenses over the limit. But the Commissioner of Elections is investigating, and the former official agent insists he accepted them 'unintentionally". Given the facts now reported on Peter Penashue's election campaign return, one or more strict liability offences appear to have taken place by exceeding the ceiling, but whether they are something more we don't know yet.

Now many people make the point that these extra expenses are what allowed Penashue to fly around the riding and win by 79 votes. Newsflash: Penashue's own flights were not included under the ceiling. And I highly doubt a well-funded party headquarters wouldn't have chipped in with funds to cover a star candidate's travel expenses, when he was only nominated at the last minute (April 4, according to my notes from the time). And it's very hard to out-organize incumbent MPs in far-flung remote ridings like that.

The incumbent MP he beat would have been flying around the riding for nearly 6 years on House of Commons travel points, except during writ periods. Todd Russell spent considering less than the expense limit in the 2011 campaign, perhaps because looking at his previous vote-share, he might not have believed he needed to raise so much money this time to win this campaign.

Other folks wonder if all this detail makes a difference, or if one charge is worse than the other? Well, exceeding the limit is an offence for a candidate, and has some pretty strict punishments if done deliberately. That's the offence that in the worst case could strip Penashue of his seat in the House of Commons, and keep him from running for another five years.

Others scoff at whether the official agent was an "inexperienced volunteer", when he'd worked as an official agent before. I don't know if that was in a remote riding though, which as you can see sometimes has very different requirements from an urban or suburban one. In how many other ridings in Canada would the cost of a staffer hopping the cab to travel with the candidate, risk putting that candidate over the limit. This might have been the inexperience part – not saying no to the family and staff travelling with Penashue, I don't know.

Anyways, I hope this illustrated explanation has helped explain the factual details of the financial return, while we await word of the investigation and disposition.

Trudeau Q4 Fundraising Juggernaut Signals Beginning of the End of the Liberal Leadership Race

January 31st, 2013 | 22 Comments

[Welcome, National Newswatch readers!]

It is just not sporting to declare a political contest over before the voting starts, and that's not something we at Pundits' Guide would ever do. But Justin Trudeau's leadership campaign raised fully 58.4% of the $1.15M in leadership donations reported by the Liberal Party in the fourth quarter of 2012.

If it's not over already, and that's not the writing on the wall, then please just ignore the rubenesque diva in the corner singing swan songs for the also-rans from here until April 14. It's not nice to call her a fat-lady-singing anyway.

The $673K reported by Trudeau's campaign through their party's fourth quarter financial return does not even include a further $90K raised prior to his registration as a candidate — funds, in that case, that were not eligible for a federal political contribution tax credit the way these donations directed through the party are (nothwithstanding the 10% tithe the party keeps in this case to cover the leadership contest overhead).

Liberal Leadership Contestant Fundraising Directed Through the Liberal Party, 2012 (Q4)

Leadership candidate Total ($) Pct
Grand Total $1,153,535.11 100%
* Fry is not a candidate in the current federal Liberal leadership race, but is still raising funds to retire a debt from the 2006 contest. Missing from this list are 2013 entries David Bertschi and Martin Cauchon, neither of whom became registered leadership contestants until January of 2013.
Figures total the "Directed amount" of contributions, as that is the best indicator of fundraising potential, not the "total contribution" which could include the value of goods and services deduced from the ticket, and not the value after the party's 10% tithe.
Justin TRUDEAU 673,156.53 58.4%
Martha HALL FINDLAY 149,877.45 13.0%
Marc GARNEAU 122,616.11 10.6%
George TAKACH 106,233.00 9.2%
Joyce MURRAY 56,554.06 4.9%
Karen McCRIMMON 20,275.00 1.8%
Deborah COYNE 16,355.00 1.4%
Hedy FRY* 8,467.96 0.7%

Seven of the nine candidates in the current Liberal leadership contest reported donations in the final three months of 2012, as did Vancouver Centre M.P. Hedy Fry, who is chipping away at the remainder of her debt from two contests ago. Fry hosted the first leadership debate of this contest in her downtown riding two weekends ago, where the new crop of candidates tested their lines against the prohibitive front-runner. The second debate will be held in Winnipeg this weekend.

Joining the race in time for the Vancouver debate, but not in enough time to raise funds before year-end was former Chrétien-era justice minister and then-Outremont M.P. Martin Cauchon. Also missing from the Q4 return was David Bertschi of Orléans, Ontario, another late official registrant even though he announced his candidacy last fall. Karen McCrimmon from the other side of the nation's capital was able to raise over $20K, albeit that 94% of it originated from within Eastern Ontario.

Bunched up in a rivalry for a distant second place finish financially are former Willowdale, Ontario M.P. and 2006 leadership aspirant Martha Hall Findlay, Westmount–Ville Marie, QC M.P. and former astronaut Marc Garneau, and Toronto-based tech lawyer George Takach who has never run for office but served a stint as a political aide back when Liberals actually ran things in Ottawa.

The regional distribution of funds raised by the various candidates does tend to confirm what is known anecdotally about their relative pockets of strength, but again Trudeau wins in every Postal District (first letter of the postal code) except BC, where he finds himself slightly behind the province's home-grown candidate Joyce Murray. Murray however comes up short in the national comparison, hovering somewhere between Takach and the two smaller campaigns of Karen McCrimmon and Toronto lawyer Deborah Coyne.

Martha Hall Findlay's campaign is showing more strength in the west financially than other non-Trudeau candidates, except for Marc Garneau who passed her for second place in Alberta. She also shows some fundraising prowess in Ontario, though Takach beat her in Toronto, and Garneau bested her in Eastern Ontario. And finally, she won the non-Trudeau candidate sweepstakes for fundraising in Nova Scotia.

But frankly, the lion's share of money being raised for this leadership contest, as with the party's vote in the last election, is coming out of Greater Toronto, Montréal, and Ottawa (65% of all leadership fundraising came from the H, K. L, and M postal districts). Only BC came close to breaking 10% of the take, while the economic powerhouse of the country, Alberta, provided just 5.1% of the funds for the Liberal leadership race before Christmas.

[Click on image below to open PDF containing the regional distribution by Postal District.]

Looking at the cumulative fundraising by leadership campaign out of this dataset (and remember it doesn't include the $90K already reported on Mr. Trudeau's leadership registration report), Mr. Trudeau nearly doubled his take in the final days of the calendar year, a good part of that coming from an apparent leadership dinner in Sudbury, ON, along with some ceiling contributions from Regina, the Toronto area and elsewhere dated December 31.

[Click on image to open full-sized version]

Federal Party Quarterly Returns

Meanwhile, the federal parties reported their own fundraising totals for the fourth quarter of 2012 at the same time. No doubt these will be spun various ways by all concerned, but the thing that struck me was how three of the political parties came down off their election year highs the way you would normally expect to see in the first non-election year of a majority mandate, while the NDP and Greens more or less held onto their 2012 fundraising levels, with the NDP increasing theirs every so slightly.

What the NDP wasn't able to do, however, was move the needle ahead of the Liberal benchmark even as their red rivals receded a bit comparing annual hauls year over year. Liberal Party Executive Director Ian McKay told reporters in January that the party had had the "best December ever", which I haven't verified but seems plausible. However they didn't have a better fourth quarter than 2006.

Other popular spin-o-matic explanations for fundraising numbers include the old stand-by "Our members were also being hit up for leadership contributions", in which case you would have to add $1.72M to the NDP's total for 2012, and $1.28M to the Liberals'.

As for the Conservatives, they did not raise more in the fourth quarter than all the other parties combined, but they continued to raise more than any of them, from more donors both large and small. Also of interest, the Bloc Québecois put on a year-end push and got their fundraising back into a post-Québec provincial election high gear, raising a good enough chunk of money from large donors in the fourth quarter for us to remark that they aren't rolling over and playing dead yet.

You can see the full results here, but for now a quick table of the parties' fourth quarter and year-to-date 2012 fundraising results..

Party Q4 ($) YTD ($)
Cons $ 5,088,617 $ 17,260,373
Lib $ 2,789,855 $ 8,370,483
NDP $ 2,478,938 $ 7,679,351
Grn $ 801,058 $ 1,700,270
BQ $ 281,547 $ 434,283

Liberal Leadership could be settled by fundraising

December 1st, 2012 | 5 Comments

The entry fee and other financial rules established by the federal Liberal Party for the conduct of its leadership race could wind up being the decisive factor in the outcome – and leave several aspiring candidates at the altar of unmet fundraising expectations.

To date only Justin Trudeau and Deborah Coyne have been accepted as registered candidates by the Liberal Party, and have filed their Leadership Contestant Registration Reports with Elections Canada. Those reports detail what the candidates have raised and/or borrowed prior to their registration. Here's a summary of what they say:

Contestant Trudeau Coyne
* See note below
Period Starting Oct 2 Oct 5
Period Ending Nov 15 Nov 7
"Pass
the Hat"
Amt
Num
Avg
$ 4,627.98
332
$ 13.64
 
Small
Unnamed
Donors*
Amt
Num
Avg
  $ 1,240.00
16
$ 77.50
Named
Donors
Amt
Num
Avg
$ 90,063.00
332
$ 271.27
$ 1,500.00
5
$ 300.00
Total
Raised
Amt
Num
Avg
$ 94,690.38
664
$ 142.61
$ 2,740
21
$ 130.48
Loans Amt
Num
Int
$25,000
1
4.25%
$25,000
1
5.0%

[* Note that this category is not available for leadership contributions made through the registered party, only for those made directly to a contestant's campaign. The Liberals, like the NDP before them, are insisting that contributions to leadership contestants - once they are registered with the party - must go through the party. Thus we will see names and amounts for all donors on all their subsequent reports. Justin Trudeau's campaign opted to report all names and amounts on his registration report in spite of this distinction. I did an exhaustive (some might say exhausting) review of the rules for leadership contestant reporting, during the NDP leadership race (read down half-way for the "Primer" on it).]

Cumulative Federal Liberal Leadership Contestant Fundraising from named donors, per Contestant Registration Reports - Dec. 1, 2012

Looking at these registration reports, a few things become clear:

  • Both registered candidates to date borrowed the funds to pay their first installment of the party's entry fee (Mr. Trudeau from the Bank of Montréal, and Ms. Coyne from herself).
  • And while Trudeau had already raised just under 10% of the spending limit by the time the race had started, Coyne (in spite of being on a near-constant leadership tour since last July, and not registering until mid-November) had raised less than $3,000. UPDATE: Let's remember that contributions made directly to a candidate (i.e., and not going through a party) are not eligible for a political contribution tax credit. Thanks to a regular reader for reminding us of this point.

Now, some of the Liberal Party's own leadership rules will start to have a bearing on what happens next. Consider:

  • The next installment of the entry fee is another $25,000 which is due for all registrants on December 15. Any new candidate wanting to register between December 15 and January 13 would then have to post a $50,000 fee. The third and final installment for registered candidates is due on January 13, and the last day to register as new candidate is Monday, January 14.
  • A candidate such as Deborah Coyne who had not raised the $25,000 needed to pay the second installment as of November 7 would have to raise a net of $657 and change daily until December 15 in order to do so. In the alternative, such a candidate could loan him- or herself another $25,000, or take out a loan at a bank or credit union.
  • The party will not let candidates take out more than $75,000 in loans, nor will it allow any candidate to rack up more than $25,000 in unpaid bills on any of their monthly financial reports to the party. The relevant sections of the rules are transcribed here.

——————————————————————–

What is the entry fee to become a candidate for the 2013 LPC Leadership?

The entry fee to become a candidate for the 2013 LPC Leadership is $75 000 non-refundable, and payable to the LPC in three installments as follows:

(i)   $25 000 on the date of the leadership contestant’s registration with the Party;

(ii)  $25 000 thirty days after the call of the 2013 LPC Leadership (December 15 2012); and

(iii) $25 000 ninety days before the day of the vote (January 13 2013)

What is the spending limit for candidates for the 2013 LPC Leadership?

The spending limit for candidates for the 2013 LPC Leadership is $950 000, from September 6, 2012, exclusive of the entry fee, transfers made to or withheld by the LPC for the processing of donations or services incurred, and certain policy research expenses, fundraising costs, candidate travel and other expenses as recommended by the Leadership Expenses Committee or the Ad Hoc Leadership Vote and Expenses Committee in the interim.

What is the loan limit for candidates for the 2013 LPC Leadership?

No 2013 LPC Leadership candidate shall exceed or allow his or her leadership campaign to exceed $25 000 in total leadership campaign accrued, unpaid and contingent liabilities, at the time of reporting, nor shall any such candidate or candidate’s campaign exceed a Maximum Total Campaign Debt of $75 000 in the form of loans, held by the candidate and/or third parties, subject to any rules adopted by the Leadership Expenses Committee or the Ad Hoc Leadership Vote and Expenses Committee in the interim, further and subject to any bylaw adopted pursuant to Chapter 15 of the LPC Constitution.

Will there be a levy on donations to 2013 LPC Leadership candidates?

10% of funds donated to 2013 LPC Leadership candidates will be levied by the LPC.

What are the reporting requirements for candidates in the 2013 LPC Leadership?

In addition to the statutory reporting required by Elections Canada, candidates in the 2013 LPC Leadership will be required to produce monthly expenditures reports to the LPC from the outset of the campaign.

——————————————————————–

To run a fully-funded leadership campaign (let's call that $950K, notwithstanding the other caveats) with a zero balance by the end of the contest on April 14, and assuming that a campaign started fundraising on September 6 (the day from which the party is counting leadership contest expenses), one would have to have raised at least $4,300 on average per day for those 220 days.

Someone wanting to enter the race and at least pay the entry fees on time without going into debt at all, would have had to raise on average $500/day for the 100 days between September 6 and December 15, and then another $862 daily on average for the next 29 days till January 13. And that's not counting any spending on leadership expenses themselves: staffing costs, designing and hosting websites, brochures, business cards, video production, databases, translation, etc., or other non-ceiling costs like candidate travel, polling and opinion research, and fundraising costs.

Then suppose you've made it over the first three hurdles of the entry fee, you still need to raise at least $862 daily on average to avoid running up more than $25K in unpaid bills, unless you don't spend anything. Even if you took out the maximum loan ceiling to cover the entry free, you would have to raise money to cover all other expenses out of fundraising.

We'll get our first look into who is making progress in the fundraising contest when the Liberal Party files its fourth quarter return at the end of January, but if more than a few other candidates don't get registered soon with the party and then Elections Canada, I think we'll know why.

Any campaign not raising a thousand dollars a day is going to have a hard time staying in the race under these rules, unless they are prepared to do so using mostly deficit financing.

Turning to the source of Justin Trudeau's early fundraising as detailed in his registration report, here's the breakdown by region, and contribution size:

[click on image to open full-sized PDF version]

Cumulative Federal Liberal Leadership Contestant Fundraising from named donors, per Contestant Registration Reports - Dec. 1, 2012

You'll notice that 68% of Mr. Trudeau's early fundraising came from donors who have now given their maximum for the leadership race, including 10 $1,200 donors each from Montreal, Ottawa and Toronto, 13 from Vancouver, and another 3 from around Toronto, along with a smattering from the rest of the country. Ms. Coyne picked up donations from Manitoba, the Toronto area and Nova Scotia.

For the latest on the Federal Liberal Leadership Race, don't forget to follow the half-hourly news updates, and social media tickers at the Pundits' Guide LPCLdr portal page:  http://lpcldr.punditsguide.ca. It's recently been updated with the latest candidate announcements and websites.

UPDATED: Third Quarter Fundraising Sees NDP Edge Liberals

October 31st, 2012 | 5 Comments

[Welcome, National Newswatch readers!]

For the first time ever, since early 2008, the NDP has reported a higher national quarterly contributions total than the Liberal Party.

Quarterly 2012 fundraising totals by party, quarter, and contributor size

The upstart party filed a third quarter return late yesterday showing $1,459,561.05 in contributions, versus $1,440,761.34 for its former "natural governing" competitor, a gap to the upside of $19K after falling $60K short of that objective in the second quarter.

UPDATE: David Akin reminds us that the NDP did beat the Liberals in the first quarter of 2007 as well. This was in the first quarter of Stéphane Dion's leadership of that party, and in the wake of a blowout fourth quarter for the Liberal Party in 2006-Q4. You can't beat David's memory!

UPDATE: Brian Klunder, who would know, reminds us that the NDP beat the Liberals in the first quarter of 2008 as well. I am just going to have to plead guilty to writing based on my recollection, even after painstakingly collecting and publishing all the raw data over the years. Sorry folks, and thanks to Brian and David for setting me straight.

Evidence suggests the Liberals knew they were in danger of being bested, as a series of fundraising emails went out to their list of contacts in late September, with increasingly dire warnings about the possibility.

On the bright side for them, the Liberals are still ahead of the NDP year-to-date: — $5,580,627.41 versus $5,200,412.87 — based on a stronger first quarter when the Liberals had their annual convention, and the NDP — in spite of having a very strong quarter by its own standards — was still engaged in a leadership race. To the extent that the Liberal convention fees used up the annual maximum contribution for many of that party's major contributors, and a leadership race diverts attention from national party fundraising, we might expect to see the NDP catch up to and perhaps even pass the Liberals by December.

Quarterly fundraising totals by party and quarter

Historically, the third quarter is difficult for any party to fundraise in, given that it comprises two of the summer months plus September. The major exceptions on the upside come when there is a federal election campaign underway or anticipated soon afterwards, and on the downside a third quarter after an election is bound to be below average. However, the NDP was able to increase its third quarter take in 2012 by almost a half of its previous best-ever non-election year results, and to more than double its usual previous take. And the party will tell anyone who asks that it raised 85% more than last year, although I don't think that's the most valid comparison when last year was a third quarter just after a federal election, and the party had withdrawn from the field in favour of its provincial cousins then fighting election campaigns.

But what we also see is that the NDP is starting to grow its base of small contributors, which is key to growing a fundraising base over the long-term, while the Liberals are falling back somewhat in that objective, at least in the short-term (see the darker colour section of the bars for each party in the first chart).

A look at the Conservative Party's fundraising record shows the long-term importance of building a base of small donors, as they have clearly been able to promote many small donors to larger donors over much of the intervening six years or so. But that party showed a bit of retrenchment in Q3 of 2012 as compared with recent non-election third quarters, posting the lowest number since 2007 ($3.42M vs $3.15M), though notably that was also the year just following a successful election campaign. And you can't really ever call it a bad quarter when you continue to raise as much as your competitors combined!

The Green Party is also showing some growth in its non-election year fundraising, while the Bloc Québécois is showing the expected hit from the provincial election cycle.

The NDP's national fundraising numbers come at the same time as some of its provincial sections are receiving positive attention from previously atypical financial supporters, with even Enbridge buying a table at a recent fundraising dinner for the BC-NDP's leader Adrian Dix, and this Thursday's Ontario NDP "Vision Banquet" with Andrea Horwath and Tom Mulcair being sold out — including by some reports to many of the same suddenly-interested contributors from the business community.

On the leadership fundraising side, Hedy Fry raised $100, Joe Volpe raised $1,100 and Martha Hall Findlay raised the rest of the $59,964.17 in reported directed leadership contributions on the Liberal Party's return. Near as I can tell, any leadership contestant in the 2012/2013 Liberal leadership race must track what they spend and raise now and report it in their eventual registration with Elections Canada, but as their race doesn't start until mid-November, we're not seeing any of that reported on the party return in this quarter.

As for the NDP leadership race contestants, winner Tom Mulcair took in roughly half of the $91K or so raised by all the leadership candidates, as compared with Brian Topp who was ahead in the second quarter. More on leadership fundraising later, as and if time permits.

Behind the Headlines on the NDP Convention Sponsorships Issue

August 27th, 2012 | 11 Comments

[Welcome, National Newswatch readers!]

The NDP's communications plan to handle the situation arising from their disagreement with Elections Canada over convention advertising by 8 unions and 7 other organizations is an interesting study in contrasts as against the Conservative Party's approach in the past.

It might be that the former views itself as having a greater interest in maintaining a neutral election arbiter willing to muscularly enforce a common set of rules even-handedly, while the latter has been able to fundraise effectively based on stoking the fear that the election authority was part of a liberal monolith in Ottawa where conservatives felt like outsiders.

Or it could just be that the NDP did a cost-benefit analysis, and learning from the Conservatives' experience, decided that the legal fees and on-going news story would be costlier than just accepting Elections Canada's decision and moving on.

Regardless, one of the difficulties facing both parties is that, notwithstanding the current fascination with tactics and campaign machinery amongst the media and regular inhabiters of Twitter, it is almost impossible to have a lengthy, calm and factual discussion about the facts, timelines, and merits of such cases without descending into spin, finger-pointing, and hyperventilating torque.

Almost impossible, that is, except for here.

I've prepared a briefing note below, starting with a look at the relevant sections of the Elections Act, and how they've changed over the last couple of decades.

[PS, I've also started using the version of the Act published on the Department of Justice's laws-lois.justice.gc.ca site, which is organized a little more compactly than the one at elections.ca, and also contains links to previous versions of the various sections. Check it out. On the other hand, the version at elections.ca lets you link to specific sections, rather than just specific parts, so they both have their uses.]

Elections Act on Political Contributions

The provisions regarding contributions to a political entity are contained in sections 404-405.2 of the Canada Elections Act. In summary they now say:

  • only citizens or permanent residents of Canada can make contributions, and "no other person or entity shall"
  • contributions means both monetary and non-monetary contributions, and include contributions made to any of the entities regulated under the Canada Elections Act (a registered party, a registered association [aka "riding association", aka "electoral district association", aka EDA], a candidate, a leadership contestant or a nomination contestant)
  • contributions from ineligible contributors have to be returned to them, or if that's not possible, have to be paid to the Chief Electoral Officer, who will forward them on to the federal government's general revenues (i.e., the Consolidated Revenue Fund of the government)
  • various exemptions and clarifications are then outlined:
    • transfers and provisions of goods and services within various arms of a political family are excluded
    • an employer who grants an employee a paid leave of absence to run for office is not considered to be making a contribution to that employee's political party
    • party membership fees of $25 or less in a year are not considered a contribution
    • convention fees (the full amount) *are* considered a contribution by the person who paid them (whether the delegate him- or herself, or someone else on their behalf)
  • (see more details in the Elections Canada factsheet)

Changes to Elections Act provisions on Contributions over the years

These provisions have undergone a lot of amendment over the years, however*. Regulation of campaign finance started in 1873 after some grubby dealings around the building of the Canadian Pacific Railway, but we'll start with the era before 2000.

  • Pre-2000 – There was no cap on contributions, though the federal political tax credit limits provided an effective ceiling for all but the most ardent financial supporters (75% of the first $100; 50% of the next tranche, and 33% of a subsequent tranche, up to a fixed ceiling). Publication of the names and amounts over $100 was argued to suffice for accountability. This regime had been in place since the Election Expenses Act of 1974.
  • Bill C-2 (2000) – The tax creditable ceiling was raised to 75% of the first $200, and the reportable amount ceiling was also hiked to $200.
  • Bill C-24 (2003) – The so-called "Chrétien reforms", but based on a regime first introduced by the Parti Québécois government of Réné Lévesque in the 1970s. It introduced contribution ceilings of $5,000; and directed that only individuals could donate to registered parties (meaning no donations could be made by businesses, unions, other levels of government, or other organizations). Businesses and unions could still contribute up to $1,000 to local candidates or ridings. The tax creditable ceiling was raised to 75% of the first $400, though the reportable amount ceiling was left at $200.
  • Bill C-2 aka "Federal Accountability Act" (2006) – This bill ended business and union contributions to local candidates and ridings, and lowered the contribution ceiling to $1,000 (adjusted for inflation, whenever the accumulated annual inflation increments from a 1992 base would raise the ceiling by another $100; thus it hit $1,100 almost right away, and just hit $1,200 this past year). An amendment made by Liberal Senator Rod Zimmer added the provision in s.404.2(7) which clarified that convention delegate fees are fully recognized as political contributions.

All along the way, another principle had been ensconced about the tax treatment of political fundraisers, to the effect that a receipt can only be issued for the portion of the ticket price not covering food, beverages, or other tangible benefits received by the contributor as part of the event. Thus the contribution here is not the full value of the ticket, but the ticket price minus the tangible benefits. All the parties are familiar with and have accepted these rules.

Chronology

With Bill C-24 set to come into effect on January 1, 2004, the NDP wrote to Elections Canada with a series of questions, including this one:

6. Would the purchase of an advertisement on the Party's website or in a convention magazine be considered a contribution or merely a payment for services rendered? Likewise, can the Party continue to sell items such as sweatshirts, baseball caps and buttons to unions, businesses or riding associations? Would the profit be considered a receiptable donation?

Answer:

Where a person or entity purchases goods or services from a registered party with the intention of economically benefiting 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 service 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.

The Toronto Star's Joanna Smith reported that a party insider from the time told her:

An NDP insider familiar with the issue said that in 2003, when the Liberal government under Jean Chrétien moved to limit donations from unions and corporations, the party sought an opinion from Elections Canada as to whether money obtained through selling advertising would be considered a political contribution….

Three years later, the Conservative government banned donations from unions and corporations altogether.

The party insider said the NDP also sought legal opinion and hired a third-party company to assess what fair market value for advertising would be in advance of each of the three policy conventions in question and followed those recommendations.

On that basis, former party National Director Brad Lavigne told Smith that:

"We put an emphasis on going to a third-party company to assess market value in order to keep (to) the letter as well as the spirit of the law…. We felt that while it wasn’t legally necessary to seek third-party validation for market value, we felt that it would be appropriate and well worth the investment.".

[The sentence about the Conservative government banning donations from unions and corporations altogether three years later is a red herring, because those new provisions only applied to riding associations and candidates. Union and corporations donations to national parties - the provision which is relevant here - were already outlawed by Bill C-24 as of 2004.]

So after consulting their third party consultant on the fair market value, the party charged:

  • 2006 Québec City Convention – 3 national unions (Steel, CEP, and the UFCW), along with the CLC, Douglas-Coldwell Foundation and NOW Communications $38,500 + GST of $2,360 for a total of $40,860
  • 2009 Halifax Convention – 4 national unions (Steel, CUPE, CEP, and the UFCW) 97,619.04 + GST of $4,880.96 for a total of $102,500
  • 2011 Vancouver Convention – 6 national unions (Steel, the UFCW, CUPE, PSAC, the Firefighters, and the Machinists), along with the CLC, and 5 businesses $179,337.49 + GST of $21,770.51 for a total of $201,108

Two months after the June 2011 convention, the Conservative Party's lawyer, Arthur Hamilton, wrote to the Chief Electoral Officer. He referred to earlier correspondence from the Commissioner of Elections to his own party, over an earlier dispute regarding the treatment of convention fees to their own 2005 annual meeting.

[As a sidebar, the Liberals back then were smarting because the timing of the retroactive coming into force of the Conservatives' Federal Accountability Act undermined their 2006 leadership convention, both from the perspective of the registration fee (at $995 it was going to account for most of their supporters' contribution ceilings that year) and the now well-known change to the contribution limits for leadership candidates. Probably for that reason, they seized on a June 27, 2006 comment made by newly-elected then-Treasury Board President John Baird at a Senate Committee studying Bill C-2 to the effect that he had not received a tax credit for his 2005 convention fees, and after the then-Chief Electoral Officer asked the Conservative Party to open its books on the convention costs, the Liberals wrote to the Commissioner of Elections in July asking for an inquiry. The Conservatives argued that the convention only broke even and thus if treated like any other fundraising event should not result in any political contributions, meanwhile filing a retaliatory complaint about the Liberals' convention fees.  But the party wound up having to file revised financial returns for 2005, which they did in late December, 2006, after Senator Zimmer's amendment to their bill was adopted by the House and the law came into effect. Jean-Pierre Kingsley's retirement as Chief Electoral Officer became public a week later.]

Hamilton's August 31, 2011 letter to the CEO about the NDP convention quoted the former Commissioner of Elections as saying:

Our position, simply put, is that under the [Elections Act] any voluntary provision of money, property or service for the Convention purposes described above, minus the fair market value of any tangible benefit one receives in return, constitutes a contribution. Opportunities to view or participate in debates, presentations, votes and so forth pertaining to party policies have significant political value only and cannot be excluded as tangible benefits from the calculation of the contribution.

Hamilton wrote that:

In the circumstances, which include the declarations by the NDP, the various unions identified and at least one corporate identity, it appears that the NDP has received what the Commissioner of Elections Canada has deemed to be contributions in contravention of the Elections Act.

and he asked the CEO to investigate. Conservative M.P. Dean Del Mastro separately filed a complaint to the Ethics Commissioner, but she later referred the issue back to Elections Canada as well.

Reaction from the NDP and the unions was consistent with the provisions of the opinion letter the party had received from Elections Canada: that advertisements and sponsorships were allowed, so long as they were at fair market value. Indeed, the Chief Electoral Officer himself made the same argument before the Procedures and House Affairs Committee a month later.

But according to the Democracy Law Blog, the issue may have been a distinction between sponsorships and advertising, though the blogger also questioned how market value could be determined (not knowing about the third-party consultant hired by the NDP), and further questioned whether political parties should be in the business of advertising at all.

This past June, the Deputy Chief Electoral Officer François Bernier responded to Hamilton's letter as follows:

With reference to the letter of August 31, 2011, from Arthur Hamilton, Counsel to the Conservative Party of Canada, I wish to confirm that it is the position of Elections Canada that sponsorships of political events constitute contributions that are subject to the rules set out in the Canada Elections Act, including the rules regarding the inadmissibility of certain contributors and contribution limits.

Four days later he also wrote to the NDP, enclosing a copy of his letter to the Conservatives, and thanking the party "for the full cooperation it has given to Elections Canada in order to resolve the issue promptly and effectively".

The party appears to have paid the funds back, but rather than including the reports of returned contributions in their 2011 annual return, have been advised to file a revised 2nd quarter 2012 return instead, which will be posted shortly we're told. Evidently it picked a reporter from a paper with a Sunday edition to tell its side of the story long-form, but is otherwise acquiescing to Elections Canada's position.

Analysis

The interpretation of the newly-amended Elections Act leading to the so-called "in-and-out" case (referred to as the "media buys" case by Elections Canada) was vigourously disputed by the Conservative Party, both in court and in the court of public opinion. And there were some valid points worth litigating, in the interests of clarifying how the new Elections Act would be applied. Eventually the party lost, and repaid $230,198 in rebates along with a $52,000 fine, in order to settle the case and have charges dropped against the principals involved. But as a result, the principle that local election expenses can only be "incurred" by the agent for a local candidate was established.

The NDP believes it had a valid case to make legally on the issue of fair market value for advertising and sponsorships, in view of its earlier effort to obtain an opinion on the issue from Elections Canada, and its retaining of a third-party consultant to help establish what such a fair market value would be. Obtaining a legally-tested answer to that question would be not only to their own interest but that of their competitor political parties, but that won't come to pass. The lesson the NDP appears to have learned from watching the Conservatives is that they're better off disposing of the dispute quickly, than dealing with years of spin and torque in the chattering classes while the lawyers settle the issues at hand.

In effect, Elections Canada has ruled that all sponsorships at political conventions by definition have a fair market value of zero, and therefore all sponsorship payments are political contributions, and can't be made by ineligible contributors. Conventions have to be paid for somehow, so the NDP will have to raise the price of its convention fees next time around, or else cut back on some of the production values or content to make up the difference. This might be the right ruling, but it's not going to get any legal review, more out of a fear of needing to explain a complex issue of public policy over and over in the sound-bite era than anything else.

How we got to the point where election law is being made through a series of gotchas is the sadder part. The Chretien government tolerated almost no amendments from the Reform Party to its overhaul of the Elections Act in 2000, so the Conservatives got them back with punitive retroactive amendments to the Act in 2006, which led the Liberals to exploit a slip of John Baird's at a Senate committee to launch a complaint about their convention fees, which led the Conservatives to counter-complain about the Liberals convention fees, and now the NDP's. Meanwhile, civil society groups are trying to get in on the action themselves.

Basic misapprehensions abound, such as the belief that Elections Canada can just make up its own rules (it has to implement and enforce the Elections Act as passed by Parliament, warts and all), that party activists know or could be expected to know everything that's going on in their party across the country, and/or know every nuance of our complex and always-evolving electoral legislation.

Call me old-fashioned, but I'd like to see election law made on the basis of what's good for our electoral system as a whole, and without people on either side of the issue deciding what their position is based on who they want to win, rather than a consideration of the facts and the outcome for the electoral system as a whole. We'll come back to this perspective again soon, when I get a chance to discuss the Etobicoke Centre case.

Thanks to those who provided me with copies of the relevant documents.

————————–

* For a good overview of the legislative developments, see these chapters in the Carleton University election series:

  • MASSICOTTE, Louis (1997). "Electoral Reform in the Charter Era", in Frizzell, Alan & Pammett, Jon H. (eds), The Canadian General Election of 1997, Dundurn Press, pp. 167-191.
  • MASSICOTTE, Louis (2006). "Electoral Legislation Since 1997: Parliament Regains the Initiative", in Pammett, Jon H. & Dornan, Christopher (eds), The Canadian General Election of 2006, Dundurn Press, pp. 196-219.
  • FLANAGAN, Tom & JANSEN, Harold J. (2009). "Election Campaigns under Canada's Party Finance Laws", in Pammett, Jon H. & Dornan, Christopher (eds), The Canadian General Election of 2008, Dundurn Press, pp. 194-216.

 Also, here's a bibliography of news clippings and other online sources on the current case:

and related sources about the Conservatives' convention case:

Party Second Quarter Returns Hint at Trends Worth Watching

July 31st, 2012 | 40 Comments

[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.

Explaining the 2011 Federal Election III: The Money and the Metrics

July 9th, 2012 | 6 Comments

[Welcome, National Newswatch readers!]

Just before the last federal election, we looked at a series of baseline performance metrics for the parties as they prepared to do battle. Now that the full datasets are finally in, we can come back and score exactly how each one did.

What with the end of May deadline for riding associations to file their 2011 returns, followed by the party annual returns for 2011 at the end of June, and most candidate returns for the 2011 election now filed, if not yet reviewed, it's been a busy time for your friendly data-entering blogger.

Here's a report on what datasets have been added to the site's database in the past few weeks, and how they help us understand the organizational back-story of the May 2011 federal election.

2011 GE Central Spending and Rebates

Elections Canada has posted the amounts of the rebates (aka "reimbursements") paid to the headquarters of the registered parties who qualified for one, and I've now entered them into the Pundits' Guide database, visible on the Parties page if you pick either a party or an electoral event.

To recap: a registered party is eligible for a reimbursement of 50% of its election expenses (though only the paid ones, so excluding those based on market values of donated goods and services, or other non-monetary amounts), if it achieves at least 2% of the valid ballots cast nationally, or 5% of the valid ballots cast in the ridings in which it fielded candidates (the rule that makes it possible for regional parties to be reimbursed). These are the same threshold criteria as apply for receiving the quarterly per-vote subsidy as long as it's alive.

Rebates can't be paid until Elections Canada has reviewed a party's Election Return, so we can assume they've also reviewed and verified those returns (to the extent they're allowed to under the law as currently written), and we can therefore report those numbers as well.

Here are all those values for the 2011 GE, in order of rebate size.

Registered Party Expense Limits, Election Expenses, Paid Expenses and Central Rebate, 2011 General Election

  Num
Cands
Expense
Limit
Election
Expenses
Pct
Limit
Paid
Expenses*
Pct
Vote
50%
Rebate
* if different from Total Election Expenses
** Unknown. The Chief Electoral Officer must have revised their submitted expenditures upwards slightly, as the BQ reported paid election expenses of $5,339,922.89 + a non-monetary discount of 3,138.00 for a total of 5,343,060.89 on its election return. But this is less than the $5,344,678 in paid election expenses Elections Canada reports having paid a rebate against, and which is also reported on the Bloc's 2011 financial statements. Anyways, the difference is less than $2,000.
NDP 308 21,025,793 20,372,231 96.9% 20,319,567 30.6% 10,159,784
Lib 308 21,025,793 19,507,746 92.8% 19,483,917 18.9% 9,741,959
Cons 307 20,955,089 19,519,995 93.2% 19,457,420 39.6% 9,728,710
BQ 75 5,373,818 ** 99.5% 5,344,678 6.1% 2,669,961
Grn 304 20,764,345 1,924,478 9.3%   3.9% 962,239
Rest 224 16,258,007 118,264 0.7% 112,914 0.9% 0

Unlike 2008, when the NDP said that it had the capacity to spend the limit if it wanted to, but then didn't, in 2011 it actually did spend close to the maximum. Only the Bloc Québécois spent a higher percent of its limit, but then they had a fight on their hands this time — from the NDP.

And unlike 2008, when the Liberals pulled back spending severely in the final weeks of the campaign, finishing up at 73% of the limit, this time they were back to a fully-funded campaign, on a par with the Conservatives (who themselves have learned the hard way to leave a bit of wiggle room), at 93%.

And, finally, unlike 2008, when the Green Party spent some 14% of the national limit on their central campaign, this time they managed only 9.3%, a drop of some $870K mostly shaved off the advertising budget.

Percent of their National Expense Limit Spent, by Party and Election, 1997-2011

2011 GE Candidate Spending

Next up are the candidate returns. The 1,587 candidates (1,526 endorsed by the registered parties plus 61 non-aligned and independents) had four months from Election Day to file their financial returns or ask for an extension, which given most of that time straddled the summer months last year, 651 of the 1,587 did.

As of today, 1,564 of the 1,587 candidates have returns posted on the Elections Canada website, of which 1055 have already been reviewed by the Election Finance group (that's 1055 down, 509 to go, fellas; keep plugging away!). Here's how they break down by party, in order of return filing completeness.

Candidate Financial Returns by Posted Status and Reviewed Status (as of July 8, 2012), 2011 General Election

  Num
Cands
Cand $$ Returns Posted
Missing Posted "As
Reviewed"
"As
Submitted"
TOTAL 1,587 23
(1.4%)
1,564
(98.6%)
1055
(67.5%)
509
(32.5%)
BQ 75   75
(100%)
63
(84.0%)
12
(16.0%)
Cons 307 1
(0.3%)
306
(99.7%)
226
(73.9%)
80
(26.1%)
NDP 308 2
(1.0%)
306
(99.4%)
192
(62.7%)
114
(37.3%)
Grn 304 3
(1.0%)
301
(99.0%)
198
(65.8%)
103
(34.2%)
Lib 308 9
(2.9%)
299
(97.1%)
179
(59.9%)
120
(40.1%)
Rest 285 8
(3.2%)
277
(97.2%)
197
(71.1%)
80
(28.9%)

We can see that there's nearly a full set of returns from each party's candidates, and that just over two-thirds of them have been reviewed by Elections Canada. Many are NIL returns, however, and many others show very small amounts of spending as we'll see in a second, so some of that reviewing work has been less onerous than in other cases.

The unsubmitted returns are from Conservative Ronald Leung in Burnaby-Douglas, BC, New Democrats Dave Nickle in Peterborough, ON and Mary Trapani Hynes in Don Valley East, ON, three Green candidates from Québec, and nine mostly name-on-ballot Liberals (1-NS 4-QC, 3-AB, 1-BC) but including the star recruited candidate Professor Stephen Randall in Calgary Centre-North, AB and another university professor for whom the party had high hopes, William Hogg in Compton-Stanstead, QC.

Remembering that just before the election, we used the threshold of 50% spent on a local campaign as a hint of how many seats a party was targetting, now that we have most of the candidates' returns filed, we can revisit that metric to see what kind of ground organization the parties had in place.

# of Ridings Spending >= 50% of the Limit, by Party, by Party and Election, 1997-2011

Posted Candidate Financial Returns by Percent of the Local Candidate Expense Limit Reportedly Spent (as of July 8, 2012), 2011 General Election

  Number of Party Candidates Spending
What % of the Local Expense Limit (2011 GE)
0% < 10% >= 10% >= 25% >= 50% >= 75% >= 90%
Cons 1 14 292 270 228 174 102
Lib 11 33 266 222 167 92 44
NDP 28 147 160 97 70 43 10
BQ 0 6 69 66 56 32 13
Grn 69 249 52 19 5 4 2
Rest 142 264 13 6 2 1 0

This table shows the number of candidates by level of spending. So, for example, of the 306 Conservative Party candidates who have filed a return, we see that 14 of them spent under 10% of their local candidate expense limit (including 1 candidate who reported no spending at all), while 292 Conservative candidates spent 10% of the limit or greater, including a full 102 of them who spent 90% of the limit or better. 228 of them spent 50% or better (down slightly from 246 in 2008; not shown).

The data show clearly just how targetted the NDP's effort was. The party had a short-term goal of getting riding associations to raise more of their election requirements in the pre-election period through the "Local Victories Challenge", and a longer-term goal of encouraging those ridings to spend a greater proportion of the limit. It partially met the first goal (80 ridings transferred $20K or more to their candidates, up from 68 in 2008; data not shown), but not the second (the party's candidates combined again spent just 25% of their combined ceilings; meaning that $21M was again left on the table, presuming it could be raised; see below).

% of their Overall Candidates' Spending Limits Spent, by Party,<br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br />
1997-2011

Of the 147 NDP candidates who spent less than 10% of their limit, to no-one's surprise 60 of them were in Québec including many of those who were subsequently elected, with another 13 of them in then-no-hoper ridings in Atlantic Canada, 44 in Ontario, 20 in Alberta, and 20 others elsewhere across the west.

The 14 low-spending Conservative candidates were also in Québec, while the 33 low-spending Liberals were split evenly between Québec and mainly rural western ridings (plus Saskatoon-Rosetown-Biggar, SK).

The data also demonstrate starkly just how targetted the Green Party's efforts were. Only one riding besides Elizabeth May's seat of Saanich-Gulf Island, BC put on a fully-funded campaign (deputy leader Adriane Carr, who in fact outspent May 98.6% to 92.8% during the campaign period in return for 4th place and 15.4% of the vote in her riding of Vancouver Centre BC), and just 17 other candidates managed more than a token effort, at 25% of the limit or higher (12-ON, 2-BC, 2-AB, 1-YT).

The Bloc showed a pattern of greater spending in more seats in 2011 than 2008, another fact supporting the contention that they fully realized their vote to be under threat of erosion from the NDP (even if not the full extent of the resulting wave). The Liberals also maintained local spending at 2008 levels, though down from when they last won government in 2004.

[Indeed, while the first obvious correlation to try and make against candidate spending is candidate vote-share, I'm not sure that's the best predictor any more. I'll test some other variables, but I bet we find a better correlation with other concepts that get at the degree of competitiveness, or the extent of a perceived threat, and/or the perception of the potential for gains or losses. More work than I have time for today, but definitely some concepts worth tagging for later exploration.]

2011 GE Outcomes and the Changing Contest

What kind of success did that money buy them? Here are the updated graphs on vote outcomes from last year.

First, the total number of votes received, a metric that David Akin argued last spring represented a "structural trend" in the NDP's favour relative to the Liberals:

Raw Vote by Party, 1988-2011

Second, we can look at the number of ridings in which each party obtained 30% of the vote or better, a rough indicator of the number of seats in which it was competitive in a multi-party, first-past-the-post system (though note that a party's riding vote-share in one election can represent a ceiling on its riding vote-share in the next one, if it's already in broad decline).

# of Ridings with >= 30% Vote Share, by Party, 1988-2011

Let's look at the distribution in more detail:

  Lib NDP Grn BQ Cons
Metric 2008 2011 2008 2011 2008 2011 2008 2011 2008 2011
 
Votes 3.6M 2.8M 2.5M 4.5M 933K 572K 1.4M 891K 5.2M 5.8M
% Votes 26.2% 18.9% 18.2% 30.6% 6.7% 3.9% 10.0% 6.1% 37.5% 39.6%
% Electrs 15.3% 11.5% 10.6% 18.6% 3.9% 2.4% 5.8% 3.7% 21.9% 24.1%
 
# Cands 307 308 308 308 302 304 75 75 307 307
# Seats 77 34 37 103 0 1 49 4 143 166
# 2nds 122 76 67 121 5 1 17 42 95 65
# Cls 3rds 4 4 5 8 1 1 1 1 4 9
 
# Rebates 270 217 243 306 41 7 71 65 300 284
# < 10% 37 91 65 2 261 297 4 10 7 23
 
# >= 10% 270 217 243 306 41 7 71 65 300 284
# >= 15% 226 159 144 267 9 3 67 59 280 259
# >= 20% 183 119 82 216 3 1 66 50 246 245
# >= 30% 115 77 54 141 1 1 54 22 197 213
# >= 40% 69 22 33 93 0 1 38 0 134 161
# >= 50% 17 2 7 36 0 0 13 0 80 107

By this criterion:

  • the Liberals were competitive in 77 / 308 seats in 2011 (18 in the Atlantic provinces, 10 in Montréal, 4 in Ottawa plus another 2 in Eastern Ontario, 27 in Greater Toronto, 5 in Southwest Ontario, 1 in Northern Ontario, and 10 out West)
  • the Bloc were competitive in 22 / 75 Québec seats (5 in the east end of Montréal, another 3 in the Montréal suburbs, 3 each in the Gaspésie and northern Québec, and a smattering of 8 other ridings throughout the province)
  • the Green Party was only competitive in its leader's seat, and only significantly influenced the outcome in 2 other ridings (Yukon at 18.9% and Vancouver Centre at 15.4%)

In contrast, both the NDP and the Conservatives were much more broadly competitive across the country, the NDP in just under half the ridings and the Conservatives in just over a two-thirds.

But were they competitive with each other? To answer that, we need to look at the changing contest.

[Click on image to open a full-sized version in a new window]

2011 General Election Ridings by Contest and Previous Contest

The largest number of ridings in 2011 were Conservative-NDP / NDP-Conservative contests (148/308), which represented an increase in that category over 2008 when there were 71 such contests (a figure that had been growing over several elections). The Conservatives traded Surrey North, BC with the NDP in return for Sault Ste. Marie, ON and Elmwood-Transcona, MB; and otherwise the NDP replaced the Liberals in 48 other seats, 4 of which it picked up (Pontiac, QC which had been a Cons-Lib contest, along with Lib-Cons races in the Rouge River & Southwest seats in Scarborough, ON and Esquimalt-Juan de Fuca, BC), while the Conservatives replaced the Liberals in a further 13 (the core urban seats of St. John's East, NL, Ottawa Centre & Hamilton East-Stoney Creek in ON, and Vancouvers East & Kingsway in BC, along with Acadie-Bathurst, NB, 6 Northern Ontario ridings, and Churchill, MB).

On the other hand, the largest number of ridings in 2008 had been Conservative-Liberal / Liberal-Conservative contests (134/308). By 2011, that number had continued to shrink to just 79. The 6 [UPDATE: 5] additions to the group comprised 4 Atlantic seats not targetted by the NDP (Labrador, Humber-St. Barbe-Baie Verte, and Random-Burin-St. Georges in NL, and Sydney-Victoria on Cape Breton; along with Halifax West, where the NDP placed a very close 3rd, and Kingston & the Islands in ON, which had been heavily targetted by the Conservatives). [a slip of the finger in my dataset mis-characterized Kingston in 2008; sorry]

Meanwhile, an insignificant group of ridings in 2008, the NDP-BQ / BQ-NDP contests, suddenly became the third-largest grouping in 2011, accounting for 45 ridings rather than the lone 3 in 2008 (Gatineau, Repentigny, and Rivière-du-Nord, QC).

NDP-Liberal / Liberal-NDP contests represented 30 ridings again in 2011, though most of them were not the same as those from the same category in 2008. The NDP picked up a further 6 seats from the Liberals in this group (St. John's South-Mt. Pearl and Dartmouth-Cole Harbour down east, and their 4 south Toronto pickups), along with 6 other former BQ-Lib / Lib-BQ ridings, and they took over from the Bloc as second-fiddle in a further 2 seats (Bourassa and Papineau).

Of course, the Conservatives' majority hung on the 25 Liberal-Conservative contests from 2008 that it flipped the other way in 2011, of which 20 were found in Ontario, along with 2 in New Brunswick, and 1 each from Manitoba, BC and Yukon.

In a climate where the Conservatives seem to be dropping in support, and the NDP apparently gaining, those are the kind of seats that offer the Liberal Party its best first step on the road back. And luckily for the Liberals, the upcoming two and possibly three by-elections will be taking place in seats that have been Conservative-Liberal contests and are likely to stay that way in the foreseeable future (Durham, Etobicoke Centre, and Calgary Centre – though the NDP has dipped its toe into that one too to test the waters with a workshop there on "uniting the progressives" hosted by Nathan Cullen this Wednesday).

For the Conservatives, they cannot safely assume that their opponent last time in a seat will be their strongest competitor next time. But in the 25 seats that gave them their majority last time, fewer fit the profile of the kind of seat the NDP can leap over the Liberals in. Which means that the old battle royale between the two old-line parties is not set for the dustbin of history just yet.

UPDATE: As I would have seen, if I'd taken a second to double-check my assumption, the NDP came second in Durham, edging the Liberals 21 to 18 in a campaign with minimal resources; not that the Liberals exactly spent the limit either, though they ran the former Chief Operating Officer of the Toronto Board of Trade, Grant Humes, as their candidate last time. An alert regular reader has drawn our attention to this boo-boo, but I wonder if my mistake doesn't point to another hunch worth considering for a second.

Eyeballing the chart for Durham, it's a pretty reasonable assumption that the Conservatives gained there at the expense of the Liberals over the long-term, while the short-term collapse of the Greens put the NDP temporarily ahead of the Libs. My commenter would have to agree that Durham would not normally have the geographic or demographic profile of the kind of ridng the NDP would target. Provincially the riding shows the more typical set of results. It seems to me that if the NDP wanted to pick a seat where it could take over from the Liberals as the natural alternative to the governing Conservatives, this riding would not figure on the top of anyone's list in Ontario. Federally, the Conservatives won every poll except the Mobile Polls, which it split with the NDP (one loss, one tie). It bears watching to see if some dramatic moves in candidate search can change my perception on this one, though.