Money makes the campaign go round

By Harold Jansen on Sep 24, 2008

I had to take a little hiatus from blogging about the election to finish up a paper for a conference this coming weekend. In this paper, my co-author, Lisa Young of the University of Calgary, and I look at patterns of fundraising and spending since the adoption of the changes to Canada's electoral laws in 2004. You may remember that the government banned corporations and trade unions from donating to political parties, enriched the election expenses reimbursement given to qualifying parties (those who get at least 2% of the vote nationally or 5% of the vote in the districts in which they run candidates), made individual donations to poltiical parties more advantageous by strengthening the individual political contributions tax credit, and gave every qualifying party (2%/5%) $1.75 per vote per year. As the media have reported, the Conservatives have been raking in money like crazy.

(Aside: I have a mental picture of Stephen Harper and Doug Finley in a big room with money and then Harper calls out "money fight!" and they fling bundles of money at each other. You know, like Smithers and Burns did in The Simpsons. But I digress....)

What we look at, though, is the fundraising costs associated with raising that kind of money. Once you factor that in, things get a bit more interesting. The Conservatives are spending 4-5 million a year more on fundraising than the Liberals, which indicates that the lead isn't as big as you might expect if you looked at the raw numbers. Still, in 2007, the Conservatives took in about $8 million more than the Liberals, even after you account for fundraising. With a national spending limit of around $20 million, you can see what an advantage it is. In fact, the major constraint on the Conservatives is the election expenses limit.

But the Conservatives are in excellent shape to weather its third national campaign in the last four and a half years. But this is taking a financial toll on the Liberals, another reason why Harper was interested in ignoring his own fixed election date law. As Tom Flanagan famously argued in a Globe and Mail column, these elections are the Punic Wars, designed to grind down the Liberals and use up their resources.

We also find evidence that all parties have been able to spend more in election campaigns since the new rules came in. There has been a sharp increase in BQ and NDP spending suring elections as well. And the Greens? They used to spend about $16,000 on their entire national campaign. In the last two elections, they spent close to a million. Arguably, the new laws have contributed to making Canadian politics and elections more competitive than they have been in some time.

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The BQ: 90% publicly-funded?!

I think the paper is fascinating, and definitely worth a read.  (I shamelessly lifted, and cited, many of your figures in my class last night.)

In addition to the points you've mentioned, a key stat is the proportion of BQ income derived directly from public subsidies.  Correct me if I'm wrong, but one of your charts suggested that the Bloc receives 90% of its funding -- not from individual donations -- but from the federal government.  This means that the Government (and taxpayers) of Canada are keeping alive a party that:

(1) would otherwise be crippled financially; and

(2) despite downplaying sovereignty in recent campaings, remains committed to the breakup of the country.

Interesting stuff.  Great paper.

We need to look closer at the role of the EDAs

As the media have reported, the Conservatives have been raking in money like crazy.

Agree - but what isn't being reported is the growing tensions between national fundraising initiatives and many of the local Conservative riding associations (EDA's). The amount of money being raised out of strong Conservative ridings (i.e. Western Canada) is staggering, and these ongoing fundraising initiatives are causing a certain level of discomfort in some of those strong ridings. The strong ridings still have a great deal of money - winning +60% of the vote means a great haul considering the $1.75 per vote - however, three major elections in five years means a certain amount of fundraising fatigue is setting in.

We should also consider the impact of the $1.75 a vote has on the local riding associations. With all this federal money rolling into the riding associations - determined by the local election result - there is considerably less incentive to sell political party memberships, fundraise locally and to even operate a constituency association board in an ongoing basis.

Combine the centralized fundraising operations of a modern political party in Canada, with the ongoing federal funding of political parties, the role of the modern day constituency association, as an agent for citizen engagement and political action is dying a slow death.

I think that is the real story that is being overlooked...

constituency associations

"We should also consider the impact of the $1.75 a vote has on the local riding associations. With all this federal money rolling into the riding associations - determined by the local election result - there is considerably less incentive to sell political party memberships, fundraise locally and to even operate a constituency association board in an ongoing basis."

Greg, this is an interested post, but I'm less pessimistic than you are. Constituency associations do lots of things - like engage the local activist base with cool inter-election events and support MPs - that have nothing to do with money. And the people that participate in them are there for a variety of reasons that aren't going to disappear if the fundraising aspect of local organization fades away.

C-20

Harold, if you get a chance you should check out Peter Aucoin's critique of bill c-20, which will govern how parties raise and spend money during future Senate elections:

http://www.queensu.ca/iigr/working/2008/2008-14.pdf

Basically, there would be no public funding for senate candidates, individual contribution limits of $1000, and no spending limits for candidates. 

It's fun to read because you can imagine a Conservative majority government or a Conservative minority government with NDP support passing a similar bill for House of Commons elections. Under those conditions, certainly the Bloc and probably the Liberals would be dead meat. 

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