Money makes the campaign go round
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.